axumblade said:
It sounded to me like the PS3 isn't making Sony lose money but they would if there was a price drop. For instance, if its $399 for the system and it costs them $375 to make then they make a small profit from each console. But if they did a $50 price drop like most people seem to be expecting, then they would be losing money on every PS3. It's not a big deal either way in my opinion. It's just the article is easy to misinterpret. |
You have poor grasp of economics. The product price needed to break even at $399 MSRP is not $399. It is much less. You have to take out the retailers margin, at 5% and probably 10% so that is $40. You have to subtract distribution and packaging, say $10 and $5 each. Subtract the cost of the controller, say $5. So that leaves maybe $340 of gross margin to apply to COGS. This also neglects any non-COGS OPEX needed for the PS3 production and distribution. Every dollar that they reduce the MSRP directly reduces the margin.
