"With the PS3, you are getting the performance of a supercomputer at the price of an entry-level PC," said Andrew Rassweiler, teardown services manager and senior analyst for iSuppli. The combined materials and manufacturing cost of the PS3 is US$805.85 for the model equipped with a 20GB hard disk drive (HDD), and US$840.35 for the 60GB HDD version, according to iSuppli. This total doesn’t include additional costs for elements including the controller, cables and packaging. At these costs, Sony is taking a considerable loss on each PS3 sold. Materials and manufacturing costs for the 20GB model exceed the suggested retail price of US$499 by a total of $306.85. For the 60GB version, costs exceed the US$599 price by US$241.35.

With Sony taking a smaller loss on the higher-end model, iSuppli said it's not a surprise the company is steering customers to the 60Gbyte version. iSuppli notes that Sony has delivered an amazing level of performance for the cost for PS3. "The reason why the PS3 is so costly to produce is because it has incredible processing power," Rassweiler said. "If someone had shown me the PS3 motherboard from afar without telling me what it was, I would have assumed it was for a network switch or an enterprise server."

"To give an example of how cutting-edge the design is, in the entire history of the iSuppli teardown analysis team, we have seen only three semiconductors with 1,200 or more pins. The PS3 has three such semiconductors all by itself,” Rassweiler noted. "There is nothing cheap about the PS3 design. This is not an adapted PC design. Even beyond the major chips in the PlayStation 3, the other components seem to also be expensive and somewhat exotic."