PS4 News: Release Date Teardown Reveals True Price of Console

The PlayStation 4 is now available for $399, but a teardown of the console reveals the system's true cost and exactly how much profit Sony is making on each individual sale of the new console.

AllThingsD tore the PlayStation 4 completely apart, and calculated that the console costs $381 to build and manufacture. This leaves a profit margin of just $19, so it is unlikely that Sony is making much, if anything, off the sales of the console. Instead, it looks like Sony is hoping to make its money on software sales. Andrew Rassweiler, an analyst with IHS in Los Angeles who was a part of the teardown, provided his assessment of the true cost of the PlayStation 4:

"If Sony could build the PS4 for a lower cost it would do so, but if history is any indicator, it would also lower its retail price,"

While it is odd that Sony would make such small profit on each PlayStation 4 sale, it is a better profit margin than the PlayStation 3 had at launch. The original PlayStation 3s in 2006 sold for $599, but the true cost was $805, meaning Sony lost hundreds of dollars on each console sale. To compare the PlayStation 4's profit margin to another piece of tech, the Apple iPad Air costs $274 to build but is sold for $499.

The teardown revealed the exact cost of the parts inside the PlayStation 4. One of the most important and most expensive parts of the PlayStation 4 is the Advanced Micro Devices microprocessor, which costs $100 by itself and $88 for the 16 memory chips, and this component accounts for over half of the true cost of the console. The AMD chipset comes in at 350 square millimeters, which surprised Rassweiler with it's sheer size:

"This chip is just gigantic...It's almost three times as big as the next-biggest chip we've seen."

However, Rassweiler warned gamers that while that may sound impressive, larger processors have an increased probability of suffering from manufacturer defects.

Other parts inside the PlayStation 4 include the Seagate hard drive that costs $37 and an optical drive that costs $28 to build. The Dualshock 4 controller, which contains Bluetooth chips from Qualcomm, an audio chip from Wolfson Microelectroncs and a motion sensor chip from Bosch, only costs $18 to build. This means Sony makes a big chunk of profit from controller sales, however, Sony includes one controller free with each PlayStation 4.