PS3 production costs decreasing 70%... does that mean it's profitable?

[JEDE3]

NJ5 said:

JEDE3 said:

Ding! If Sony just produced 500k Ps3 slims last Quarter then the Ps3 could easily take up 200million of that 300 million.

I think you misunderstand how financial reporting works.

When a company manufactures a product, two things happen:

1- They pay out cash to buy the components and manufacturing of the product (i.e. subtracting the production cost from their income).

2- They put the finished product in their inventory, assigning it the value at which they'll sell it (to the retailer).

The only way that this results in a financial loss is if the production cost is greater than the price at which they'll sell it to the retailer.

 

i expect to see profit in the gaming division from Holidays on. What you say makes no sense... So they just forget about the money they get after selling their product?