PS3 analysis - based on 3 years ending Mar 31, 2008 - from Sony reported figures.

Based on the following Assumptions:

PS2 Hardware - Sony makes $15 per unit, after all related costs, including marketing, R&D, etc.

PS2 Software - Sony makes $10 per unit, after all related costs

PSP Hardware - Sony makes $10 per unit, after all related costs

PSP Software - Sony makes $10 per unit, after all related costs

Based on the past 3 fiscal years, ending Mar 31, 2008 - taken from actual Sony reported figures.

Assuming PS3 costs started in fiscal year ending Mar 31, 2006.

2005 - PS2 and PSP Operating Income = US$3.03Billion

2005 Actual Operating Income = US$75 Million Dollars

2005 Loss attributed to PS3 Hardware and Software development, research and other costs = US$2.95 Billion Dollars

2006 - PS2 and PSP Operating Income = US$2.7 Billion Dollars

2006 Actual Operating Income (Loss) = US$(1.969) Billion Dollars

2006 Loss attributed to PS3 = US$4.74 Billion Dollars

2007 - PS2 and PSP Operating Income = US$2.09 Billion Dollars

2007 Actual Operating Income (Loss) = US$(1.245) Billion Dollars

2007 Loss attributed to PS3 = US$3.34 Billion Dollars

TOTAL CUMULATIVE LOSSES FOR PS3 (Software and Hardware) = 2.95+4.74+3.34 = 11.03 Billion Dollars

The only way to lessen the losses, based on the numbers is to assume that PS2 and PSP are LESS profitable.

In that scenario, then it would be hard to justify to assume that Sony takes massive losses now to gain massive profits in the future.  2005 would seem to be the height of the PS2 so I assumed that PS2 was wildly profitable.  In this example, approx. $2 to $3 Billion dollars in profit.

Please discuss.

$11 Billion?

What the?

How did it go from a total of 3.3 billion to 11 billion?

This is incredibly vague.

where did those figures come from for PS2/PSP HW and SW profit come from? specifically the software ones.

Though it is probably in the right ballpark unfortunately for the PS3.

Read it again Leo.

This is an estimation of the PS3 operating profit/loss made by taking it away from the PS2/PSP profit.

There is enough public information to put together some ballpark figures, though I think the PSP was actually operating and a fairly decent loss even in 2006...

 I stopped reading in his last post

Also notice how many assumptions there are. If it was 1 assumption I might look past it (even though one number can trhow everything off) but he is assuming at least 6 things here... not accurate at all especially since he is missing a lot of other costs.

Tell me something though... How'd you figure salary from employess?

Check out this thread:

http://vgchartz.com/forum/thread.php?id=16119

That number looks too big to me, it would mean the PS2 and PSP were really profitable in those years. As you can see in the other thread, that wouldn't seem to be the case judging from the other years in their lifetimes.

True but I would bet the PS2 hardware is a lot more profitable than $15 each now. Like I said i is all very vague and the actual figure could be anywhere between 5 and 11 billion dollars.

All we know for sure is Sony's Playstation division has lost $3.3 billion in the last 3 years, and we know the PS2 was very profitable in those 3 years, and the PSP will have been for at least half of the time. So the PS3 alone has definately lost Sony as much, or much more than the original XBox lost Microsoft. (though this depends a little on what happens in the non-XB parts of MSfts "entertainment" division)

bumidan, supose your numbers are correct and Sony will need to make a new price cut this year (to folow xbox 360 price cut), so Sony will never make a profit on Ps3? Iven if they start making a profit in 2009.. they will never recuparate 14-16 billions of dolars (11 bil + this year and mabe more) in Ps3.