Sony lost about 300 dollars on every early PlayStation 3 it sold
The PlayStation 3 was pitched as a living-room supercomputer, and its bill of materials proved it. Analysts put the cheaper launch model at roughly 806 dollars to build against a 499 dollar sticker, and Sony admitted around 3.3 billion dollars of hardware losses by mid-2008. It still ended up outselling the Xbox 360.
Work on the machine began on 9 March 2001, when Ken Kutaragi, head of Sony Computer Entertainment, announced a partnership with Toshiba and IBM to create the Cell processor. The finished chip paired a 3.2 GHz PowerPC core with seven synergistic processing units. Each Cell was actually made with eight; any defective unit was switched off by laser, and one was disabled even on flawless chips so every console behaved identically. Six served games and one was held back for the operating system. Engineers initially thought Cell could draw the graphics on its own, but developers, including Sony's own ICE team, showed performance would lag the Xbox 360, so an Nvidia graphics chip was bolted on late in development.
Firsts piled up. The PS3 was the first console built around Blu-ray discs, the first with an HDMI port and the first to output games at 1080p. A 2005 prototype carried two HDMI sockets, three Ethernet ports and six USB ports, pared back to one, one and four by 2006 to save money. Even so, the graphics chip and Blu-ray drive alone were estimated at about 129 and 125 dollars. Blu-ray shortages pushed the European launch to 23 March 2007.
Japan got the console on 11 November 2006 and bought more than 81,000 in a day; North America followed on 17 November. Prices of 599 and 499 dollars, a tricky architecture and a thin launch line-up earned a lukewarm reception. The UK sold 165,000 in the opening weekend, a record at the time, before demand sagged. Resistance: Fall of Man became the early standout.
Recovery came through cheaper hardware and strong games. The Slim of September 2009 reportedly cut production costs by about 70 percent, and the Super Slim of 2012 shrank the case by roughly a fifth, though its top-loading lid was criticised as cheap. Stereoscopic 3D arrived by firmware from 2010. Lifetime sales reached about 87.4 million units, the eighth best-selling console ever, with nearly 1 billion games sold by early 2019. Production for Japan finally ended on 29 May 2017.
Source: PlayStation 3
