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Forums - Sony Discussion - Estimated PS Vita bill of materials : $159.10

mike_intellivision on 29 April 2012
Chark said:
mike_intellivision said:
Chark said:


No! Read the Reuters article that this article got its info from. Kaz says "turn a profit within three years of the body of the Vita sales". That does not mean that the Vita isn't selling for profit now and won't for 3 years. It means that in 3 years they expect the Vita to have brought in more money than it cost to make. That includes manufacturing, R&D, advertising, etc. 

Haven't I corrected you on this before or are you another victim of miscommunication created by terrible article writters on the internet.


If I recall that article, it was three years and 70M sold to turn a profit.

And profit here means positive return on investment, including covering sunk costs, which I am sure is part of Sony's (or any business's) calulations with a new product.

 

Mike from Morgantown

They were talking seperatly about reaching PSP sales levels within the Vita's lifetime then they started talking about profit, so they were not related. 3 years to have return on investment indicating that either:

1) the Vita hardware is selling at a profit,

and/or

2) Vita software and accessories are providing overall profitability for the product as a whole. 

The confusion is created by those websites that mistranslated, misunderstood, or purposelessly spun (lied) that Vita was being sold at a loss despite Sony never saying that and discussing return on investment profitability 3 years down the road.

He was right. I went back, found the original article, and saw how it confused me.

That being said, the $160 is the components only.  So it will take a while for it to be profitable per unit -- before discussing overhead and other costs.

(I work for a university and our overhead rate on grants is 46%. That means for every $1 you spend on a grant directly, another 46 cents has to be used to support internal operations which work for the grant. That sounds high -- and includes salary fringes which may not be germane here - but it points out that there is more than just direct cost to consider here.)

 

Mike from Morgantown



      


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ImJustBayuum on 29 April 2012
logic56 said:
ImJustBayuum said:
 


Your post defy logic. Soleran's post was directed at overhead costs incur under the playstation division. Manufacturing companies do trace these costs back to products using an overhead rate. eg building costs, electricity, deliver costs..etc etc

and all those miniscule cost of the entire playstation division is added to the cost of the Vita.....yeah sure

ok then illogical, you win. Sony does not need to find the true total costs of its product lines.



NoCtiS_NoX on 30 April 2012

It is safe to assume that Vita is selling in a small profit, breaking even or having a small loss and the Memory cards sold separately is the counter for that. IMO



flagstaad on 30 April 2012
NoCtiS_NoX said:
It is safe to assume that Vita is selling in a small profit, breaking even or having a small loss and the Memory cards sold separately is the counter for that. IMO

That sounds reasonable, the question is... In that scenario, Can Sony afford a price cut soon (before the thanksgiving season)? I think it can offer bundles (free memory card inside), but not a real price drop ($50 or something around that number).



NoCtiS_NoX on 30 April 2012
flagstaad said:
NoCtiS_NoX said:
It is safe to assume that Vita is selling in a small profit, breaking even or having a small loss and the Memory cards sold separately is the counter for that. IMO

That sounds reasonable, the question is... In that scenario, Can Sony afford a price cut soon (before the thanksgiving season)? I think it can offer bundles (free memory card inside), but not a real price drop ($50 or something around that number).

IMO they can't afford a price cut until the prices to Vita goes down they should focus on Profit and just go with the flow and survived. Sony is not a great position to take another hit. 

but for me Personally, I think price cut is not the important thing right now. It's the games. Price cut can only do wonders for a short time but with a right game the long term profitability and Vita's value will strengthen.

With right games we will see Vita take off with sales.  

Japan- MH kind of games and a lot of JRPG games.

USA- Angry birds kind of games or FPS done right in a handheld.

Europe- Football, Racing Grans Turismo Vita done right and FPS done right in a handheld.

Or just a new IP exclusivley for the Vita that you can't play on PS3 or any other handhelds or Console.



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DieAppleDie on 30 April 2012

So the 3ds at 170 is being sold at a loss, and the PsVita at 250 is being sold at a profit?

i dont think so........just my opinion.



greenmedic88 on 30 April 2012
DieAppleDie said:
So the 3ds at 170 is being sold at a loss, and the PsVita at 250 is being sold at a profit?

i dont think so........just my opinion.

I doubt it myself, but the 3DS with a BoM of about $100 sold at $70 over vs. $160 sold at $90 to $140 over is not the same.

The $160 quoted was also for the $299 3G SKU. The $249 SKU would have a BoM of less than $160 without the 3G modem and GPS subsystem.