1. They are only making a profit on PS2 and PSP. Once the PS2 finally dies, the division will lose money again. PS3 is still hemoraging cash.Wii/PS2 games, and PS2 will be here FOR a LONG time.
PS3 cost less then 400$ to produce ALREADY. Now add money from GAMES and BLU-RAY movies only on PS3.
+ Have in MIND, that in 2008 PS3 is going to HAVE MANY mln. sellers.
Indeed, your username is apt.
We don't know the PS3 costs less than $400. We doubt it, in fact, or Sony would have put up much more favorable numbers. Sony has played with words a bit suggesting costs were down a lot, but we never *knew* the original cost of the PS3, nor do we know the cost of the PS3 now.
Secondly, the PS2 sales are decreasing. They will continue to decrease. Sony can drop the cost of the PS2 to breathe a little more life into the platform, but you can't keep an old man kicking forever. The PS2 is way past its prime and its revenue and associated profit will continue to decrease.
Sony does want to profit, obviously, but they also see the value is establishing the PS3 as the #2 console this generation. There is a question as to how much the name can get them, and how much a lower price will get them. If sales are decent, they're obviously going to try to avoid the price drop. If sales aren't good enough, they'll do whatever they can to drop the price.
Part of Sony's strategy right now is to make the more expensive SKU look appealing enough to get people to buy it. It probably costs $10 or $20 more than the 40GB model, even if it comes with a 160GB drive, so it will bring them $80 closer to profitability per sale. The idea is that they're getting the best of both worlds: customers willing to pay only $400 are still buying your system and customers who want the best PS3 are paying the extra $100, almost all of which is not tied to any cost
Microsoft does it very well with the Elite: it's $100 extra for a package that likely costs Microsoft less than $15 extra.