Sony and other gaming hardware companies (except Nintendo) often launch new products at a loss initially, and then aim to recoup costs through software sales and eventually through streamlining of the manufacturing process itself. As it turns out, however, the PlayStation Vita might actually make a little money from day one.
A teardown from UBM TechInsights reveals the total cost of materials for the 3G version of Vita to come to about $159. The breakdown is as follows:
As you can see, that big, beautiful OLED touchscreen is one of the biggest expenses for the portable. That cost should come down over time, along with other components. The 3G Vita will sell for $299 in the US when it launches next month, but that doesn't mean Sony will be making a profit of $140 on each unit - far from it. You have to take into account manufacturing costs, R&D, retail margins, etc. Retail probably gets a 20% cut, but even with that, we're going to assume that Sony is able to at least generate a small profit on each Vita sold (ignoring whatever marketing costs they're putting into Vita).
If the Vita is indeed making some money from the start, that could enable Sony to leverage a price cut strategy, similar to how Nintendo had to drop price on 3DS. The response to Vita in Japan hasn't exactly been stellar, so we'll be very interested to see how the portable fares in the US.
[Thanks Eurogamer]
