They actually lose money on the consoles and hope to make it back up with games. And to be totally fair, the entire 512MB was made of GDDR3. That's right. The

They actually lose money on the consoles and hope to make it back up with games. And to be totally fair, the entire 512MB was made of GDDR3. That's right. The entire RAM bank was made of chips designed for graphics. So it's no wonder it was so expensive. Edit: and this was necessary to decrease the latency between graphical operations and processor operations. You can load graphics directly into what is essentially VRAM, rather than having to pull it through regular RAM first. Because there is no regular RAM. The tradeoffs made sense at that point in time, because DDR1/2 sucked a lot, and pulling data through multiple stages would drag down performance.