The increase in Sony's PlayStation division's operating losses, which rose to 14.8 billion yen ($149 million) in Q1, were mainly attributed to research and development on the PlayStation 4. The beast of a console packs an eight-core semi-custom processor and powerful GPU, 8GB of DDR memory, on top of a bunch of other neat features like the ability to record and stream your gameplay. But despite the increase in operating losses, Sony maintains that the PS4 is actually much cheaper to develop than the PlayStation 3 was.
"One big difference is in the amount of investment that we are making in the platform," Chief Financial Officer Masaru Kato said of the comparison between the PS3 and PS4. "PS3 was, at that time, the leading edge product."
The large difference in the R& D costs is due in large part to the PlayStation 4's use of a more common x86 chipset for the CPU. With the PS3, Sony partnered with Toshiba and IBM to develop the powerful, but exotic Cell processor.
"We spent millions — hundreds of millions of dollars in designing the chipset. We spent billions of dollars in semiconductor fabrication technology as well as fabrication capacity, building plans, acquiring equipment to fabricate semiconductor," Kato explained. "The reason why we did this was there was no chipset around to meet our requirements. There were no manufacturing capacity or technology to manufacture the chipset. So the amount of investment that went into PS3 was quite big."
"Now PS4, in contrast, is a much more lighter platform in terms of investment because as for the chipset, at the core, we are taking off-the-shelf technology available and we are putting our proprietary technology around that core chipset," he concluded. "So the amount of investment is much, much smaller. I cannot give you absolute amount."
Sony didn't reveal the exact costs of the PS4, but we can presume that it was cheap enough to allow them to price PS4 at a consumer friendly $399.