How much is Sony losing per PS3?

[kitler53]

leo-j said:

pastro243 said:

rafichamp said:
Sony has stated the more they sell the more they make in profit due to manufacturing costs being reduced tremendously

This may be true, in mass production the more you produce you can reduce the costs, I dont remember the explanaition though.

neither do I but its something I leanred in economics

when you make a cake you need two types of things: the ingredients -  like flour and sugar, and the equipment - like a mixer.

the total cost to produce a cake is the cost of the ingredients AND the total cost of the equipment divided by the number of cakes produced.

if you make 1 cake then to be profitable that one cake must account for the total cost of the mixer.

if you make 1 million cakes then each cake must account for one millionth the cost of the mixer thus each cake is cheaper to make.