Sony's selling each PlayStation 4at a slight loss according to an analysis by IHS. The preliminary findings list the total material cost at $372 with an additional $9 manufacturing cost. Add in other expenses (like marketing and shipping costs) and the PS4 isn’t profitable yet without the sale of additional accessories and games at its $399 price point.
At launch, the PS3 cost Sony $840.35 to build, with a total material cost of $805.85. They were sold for $499 and $599—a significant loss.
Sony tried hard to cut manufacturing costs with the PS4. These cost saving measures mainly revolve around the falling price of optical drives and the integrated design of the PS4 which reduced the number of components. The relatively low starting cost of the system is good news for Sony with material costs expected to decrease over the lifespan of the console.
It’s interesting to see just how fast some of the component prices have dropped. The 120GB hard drive in the PS3 cost Sony $38 whereas the 500GB drive in the PS4 is $1 cheaper at $37. Similarly, the optical drive in the PS3 cost $66 and is now only $28 in the PS4. The RAM might be more expensive, but that's because of the high price of GDDR5 memory.