Vita breakdown reveals $159 materials cost
With pseudo-PS3 graphics, two touch panels, two cameras, and a number of other unique hardware features, the Vita seems high-tech enough to warrant its $250 price point. But how much does it cost to make?Andrew Yoon
January 20, 2012 7:30 AM6
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
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.”