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AMD makes more profit than Sony on the PS4

Sony makes $18, AMD makes close to $100
Wed Nov 20 2013, 15:55
Sony playstation PS4 with controller

JAPANESE ELECTRONICS FIRM Sony reportedly is making an $18 profit on its Playstation 4 (PS4), while AMD is likely making around $100 per console sold.

Research firm IHS iSupply claims to have worked out how much the PS4 costs Sony to build, revealing the company's gross margin.

According to the researchers, the PS4 bill of materials costs $372, and with manufacturing costs added the total cost comes to $381. If this is correct, it means that Sony is making a profit of $18 on every PS4 console it sells, based on the $399 retail price. This is an improvement over the PS3, which made the company no profit whatsoever.

Andrew Rasweller, senior director of cost benchmarking services at IHS said, "Sony is on a greatly shortened path to the hardware break-even point, or even profitability, with its cost-conscious Playstation 4 design.

"The company is pulling off this feat, despite offering a brand-new design that once again includes avant-garde components that yield superfast performance. The Playstation 4 keeps a lid on costs by focusing all the additional expense on the processor and memory - and reducing outlays for the optical drive, the hard disk drive (HDD) and other subsystems."

The PS4's custom built AMD processor, which combines an eight-core Jaguar architecture CPU with a 1.84TFLOPS Radeon GPU, is apparently the console's most expensive component, costing around $100 all in. This is followed by the PS4's 8GB of GDR55 RAM, which apparently costs Sony $88.

This sees AMD making quite a healthy profit per console. AMD is also probably making a similar amount on the Microsoft Xbox One console, so it's likely that AMD will be able to report some decent financial figures early next year.

Jordan Selburn, senior principal analyst for consumer platforms at IHS said, "This processor is a monster, with the surface area of the chip amounting to about 350 square millimeters. That is three times larger than any other chip manufactured using equivalent process technology that has been examined by the IHS Teardown Analysis service."

While the PS4's system on chip (SoC) made a big dent on Sony's purse, it has managed to save money elsewhere. IHS notes that the optical disc drive costs $28, compared to the PS3's $66 drive, and that Sony managed to save a few quid on the console's materials, and $1 on its hard disk drive compared to the one on the PS3. µ

 

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