PS3 could lose Sony $100 for every unit sold

[Vincenzo]

It's been suggested that Sony is likely to lose nearly $100 for every PlayStation 3 unit sold. That verdict comes from financial analysts at Merrill Lynch Japan, and is based upon the assumption that Sony will launch the third PlayStation console at $399. The news follows a story from a few weeks back, reported on this site, that rival Microsoft could lose as much as $75 for every Xbox 360 unit that sells at launch. As well as suggesting that Sony will launch at the $399 mark, Merrill Lynch's report also calculates that the Blu-Ray drive, Cell chip and RSX graphics processor will cost around $101 each, whilst the other components and the cost of manufacturing the thing will mean the final production cost will skyrocket to the $490 mark. Yowsa. And the $90 deficit could mean Sony is set to take a $1.18bn loss in it's first year on the market, if year one sales predictions of 14 million units prove true. As many readers will be aware, it's quite normal for console manufacturers to take losses on hardware at launch and for the early stages of it's lifespan. The PlayStation 2 lost Sony $0.46bn in it's first year (though reversed this in the second year with a profit of $0.76bn), whilst the Xbox has lost Microsoft money throughout it's lifespan. One genuinely worrying prospect for Sony is that Microsoft could well slash the price of the Xbox 360 within the first 12 months of the console's launch, forcing Sony to follow. Such a move could mean year two losses totalling approximately $1.2bn, suggests the report. Of course, this is all based on educated guesses, but whilst the component prices do seem quite high to PALGN, the $399 price tag may not be so far off. Sony Computer Entertainment chief Ken Kutaragi himself (most recently in Japanese magazine Toyo Keizai) has suggested in various interviews that Sony's next console will launch at a higher price than the Xbox 360, which is expected to launch Stateside at $299.

http://techplanetnews.blogspot.com/2005/06/ps3-could-lose-sony-100-for-every-unit.html

 

[Lonewolf5460]

If it works out like that microsoft will lose less money this time around they lost $100 a xbox $25 less a box is good.Nice info man.

 

[Cage K]

Good post. I did not realize that companies lose money when they first release their console. Has it always been like this? I'm into video games, but not as much as many of you here, and I never really followed the whole industry and process it takes into releasing a new console or game.

 

[Lonewolf5460]

pretty much ya when they got you with the console you will buy games over a 4 -5 year span think about how much they make a person. Think of this way like cell phones the company gives it away 4 less than it is worth and make it up in monthly charges.

 

[Tenshodo]

Every company loses money with each console sold, but they make it up with the games. However, microsoft still ost money with Halo 2

 

[Lonewolf5460]

what do you mean they lost money on halo 2

 

[inam]

damn that sucks for sony but it also sucks for us...because if one system is $399 we should just start collecting our money right now...so by next year we can buy it...

 

[Lonewolf5460]

true but I want the 360 over the playstation 3 I have to save faster.I am not one of those console fan boys I have the xbox gamecube and playstation 2.I may drop nintendo this time.

 

[Ankush09]

http://www.gamespot.com/news/2005/06/28/news_6128295.html

 

[TheSiege]

Ps3 is gonna suck