Vita breakdown reveals $159 materials cost
by Andrew Yoon, shacknews.com, Jan 20, 2012 7:30AM PST
Vita's graphical capabilities will be unrivaled when it launches next month. With pseudo-PS3 graphics, two touch panels, two cameras, and a number of other unique hardware features, it certainly seems high-tech enough to warrant its $250 price point. But how much does it cost to make?
That's what UBM TechInsights wanted to answer when it tore open a system and analyzed each of the individual components. According to UBM's Jeffrey Brown, the total cost of materials for the 3G-enabled system is about $159.10.
The breakdown bills each component as such:
- Display and touchscreens: $50
- Battery: $3.60
- Cameras: $3.50
- Wi-Fi/BT/GPS: $3.50
- NAND: $6.00
- SDRAM: $9.25
- Processor: $16.00
- BB+XCR: $16.25
- Non-electronic: $11.00
- Other: $30.00
- Supporting materials: $10.00
Eurogamer notes that the raw material cost of manufacturing a 3DS at launch was about $101 per unit.
While it's tempting to think that Sony will pocket about $140 of profit for every 3G system sold, there are many other factors to consider when establishing a price. The $250/300 price tag must also include a cut for the retailer. The teardown price also doesn't include the cost of labor, R&D, marketing, distribution, and more.
What is clear that Sony won't necessarily be losing money on each unit sold--unlike the devastating manufacturing cost of the PS3, which had Sony losing hundreds of dollars for every $600 machine purchased.
Should Vita face the same muted response the 3DS did at launch, will Sony be able to consider a price drop? "They likely don't have much room for a price cut at a profit, so my best guess is that they will stick with the introductory price for the wi-fi model at least for a year," analyst Michael Pachter told Eurogamer. Sony "will reduce price only when the cost to build drops."