CNN Money-The PS3 is a Sinking Ship

[drkohler]

BenVTrigger said:

drkohler said:

ocnkng said:
I disagree that Sony is losing money on the PS3. Acutally Sony is making a slight profit on every console. 

Actually, at this time with the current exchange rates, Sony very likely loses money on _every_ playstation manufactured, be it PS2, PSP or PS3 (certainly the latter one). They do not lose as much as MS loses with the lower end XBoxes, but they have nowhere near the profits from software sales to reduce the prices of any gadgets.

while i agree that sony is losing money on the ps3 microsoft can't be losing too much on low end xbox's cause they have been in black ink for like the past 3 quarters or so and soon to be a fourth with the big numbers their putting up

Manufacturing costs for an XBox currently selling are around $230-$250. In Europe, the arcade sells for around $220 in shops. Now the question is what does MS want from the shops. Notice that the $220 include all sales taxes and store markups. Sales taxes vary from country to country and are anywhere from 7% to 17%. Store markups are anyone's guess and the values I know are not for console stuff. But I'd say MS does not give good conditions so as a rough guess I'd say 12%. So MS gets around$150-$160 for every arcade model. See how that isn't really a clever business model? Unless you can a) sell way-overpriced accessories (120G hardisks for $160) and b) sell a lot of expensive software....