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PS4 Hardware Costs "Much Lighter Than The Past Platform"

Matt Gardner
PS4, Sony

PS4 Hardware Costs "Much Lighter Than The Past Platform"

Sony have been consistently saying that, when it come to the PS4, they won't be making the same mistakes as they did when it came to the PS3, particularly regarding costs.

Addressing analysts and investors during a financial call this morning, Sony chief financial officer Masaru Kato said that because Sony are not starting from scratch this time around, in terms of developing hardware architecture, the amount investment required is "much lighter" than before.

"One thing I can say for the new platform, PS4, how it is different from past platforms, is that the amount of investment that goes into the basic architecture components [for the] hardware device is much lighter than the past platform," he said.

"To be a little more specific, when we launched PS3, initially we had a negative margin on each unit that we sold which was quite big. It did come down over time as we reduced the cost of the console, however the initial investment was quite big due to the fact that we had to design the Cell chipset from scratch which cost a lot of money, hundreds of millions of dollars.

"In addition to that, we had to invest money developing the silicon conductor fabrication technology, as well as the capital expenditures for producing the chipset. All of these amounted to billions of dollars of investment for the platform which had to be recouped as we sold software and hardware.

"Compared to that business model, PS4 utilises a core chipset. Yes, we have designed it with our own technology, but the core of the CPU is something that's available ready, so we're not designing the chipset from the ground up.

"In addition to that, [for] semiconductor processor technology [and] fabrication process technology we are relying on outside sources. [For] production capacity, also we are relying on outside sources, which means that we don't spend our own money to get the chipset ready. That, I think, is the fundamental difference in the business model this time and the reason for us not taking a big hit in the initial year of the introduction of the PS4." [CVG]

Add a comment 1 comment
Realhoneyman  May. 14, 2013 at 00:52

So essentially, he's saying that SONY isn't doing all the creative and engineering aspects of making the console this time. They're licensing more of the technology/components and putting them into what will be the PS4.

Tbh, anyone could have told them to consider that with the PS3 rather than releasing it as a luxury electronics item at a premium price. Always important with a consumer base; make the device a nice price.

Still, it sounds like SONY's got their gloves on wtih extra padding this time around. Is it just me that feels like they, Microsoft and Nintendo are all going to go in separate directions of the gaming market this generation? I'm getting that vibe but could gladly be proved wrong...

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