[quote name='Quackzilla']Especially since Sony developed AND manufactures Blu-Ray, and owns exclusive rights. They don't have to pay a liscense fee on the technology.
They get it at the cost of the materials and labor (because they don't have to buy it from anyone, they make it themselves), probably under $20 each.
The Cell, codeveloped by IBM and Sony, probably under the assumption that Sony would get a huge discount on the chips for PS3s.
To suggest that Sony would have to pay the street price for every component, even those they made themselves, is simply outrageous.[/QUOTE]
Thats not street price, not at all.
Blu-Ray drives are expensive to manufacture, because none are currently being mass produced, and none are going to be available commercially until 2007 at the earliest. These will be among the first. They are inherently more expensive for several reasons. The disc must spin extremely close to the laser head, and the discs are much more fragile, so the drive needs to be a ton more precise. Being backwards compatible also adds to the price, since it will need both a red and a blue laser on the head. This costs a lot more than $20. Plus, Blu-Ray discs cost a lot more, and it will be very expensive to convert production lines to Blu-Ray, this'll end up costing Sony some money too.
Regular DVD drives are highly commoditized, you can just take the lowest bidder. They're dirt cheap in any quantity, and we're talking massive quantities.
The Cell processor is the first of its kind, nothing remotely close has been manufactured before. Its more than twice as big as a normal processor, first of all, so it costs more from a materials standpoint, and you get lower yields per wafer. They've been having enough problems getting these out the door, that 1 of the 8 SPE's will be disabled on every chip. This is a chip that is supposed to "blow the doors off" of the 3 core 3.2ghz PowerPC? For comparison, a 2 core 2.2ghz Athlon 64 costs about $600 on the street. If you think $100 is the "street price", you're insane. I'm shocked that its only $100.
Kutaragi all but concedes that it'll cost more in the interview. "Our ideal [for the PS3] is for consumers to think to themselves, 'OK, I'll work more hours and buy it'."