Sony Playstation 3 a 'Great Bargain': Analyst

Sony offers two versions of its upcoming console - one equipped with a 20 GB hard disk drive and another with a 60 GB drive - at $499 and $599 respectively. In contrast, Microsoft's rival Xbox 360 retails for $399. After analyzing the Playstation 3, researcher iSuppli concluded that the hardware is worth the cost.

"The reason why the PlayStation 3 is so costly to produce is because it has incredible processing power,” Andrew Rassweiler, senior analyst for iSuppli said. "If someone had shown me the PlayStation 3 motherboard from afar without telling me what it was, I would have assumed it was for a network switch or an enterprise server."

The firm's tear down analysis of the game console - which involves taking the unit apart completely - concluded that Sony built "an engineering masterpiece," setting a new standard for computing price vs. performance.

"With the PlayStation 3, you are getting the performance of a supercomputer at the price of an entry-level PC," Rassweiler said.

Preliminary estimates from the El-Segundo Calif.-based researcher found that Sony is spending $806 to manufacture its entry-level console, while the higher-end version is estimated to cost $840.

"There is nothing cheap about the PlayStation 3 design," Rassweiler added. "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."

In its report the firm says the Playstation 3 delivers more "processing power and capability than any consumer electronics device in history," adding the system is "a great bargain."