How much does Sony lose on each 40gb PS3?

[Non Sequor]

darconi said:

leo-j said:
For the bottom part it will be positve for sony in the long term, come march when they will ikely cutt he price by $50 it will be at $349.99 and the 80gb will be at $449.99(with motorstorm dropping to $39.99). 65% of PS3 sales this week came from the 40gb ps3, only about 33k of the ps3;s were the 80gb.

I think they lose about $100.00 per console. But gain it back with software.

With the current attach rates as it is, there's no way they're making it back on software.

Yep, a console sold at a loss is only profitable if

LTD average loss per console sold < LTD attach rate * LTD average revenue per game sale

 

Their current attach rate is probably somewhere in the 3s. The only way to increase attach rate is to expand their software sales at a faster rate than they expand their user base. But that will only happen if they get a bunch of titles with long legs and it doesn't look like it will happen soon.

For third party titles, my understanding is that they make about $10 per sale. They make more money on titles they publish of course, but that's offset by the development costs. Barring a lot of really huge first party titles that earn a lot more money than they cost to make, I don't see this variable changing much.

The only real variable in the inequality is average loss per console. This will only go down if they sell more consoles at a smaller loss or at a profit. The more consoles they sell at a higher loss, the bigger the hole they dig for themselves. They keep selling them at a huge loss anyway though because they need to get all of the marketshare they can since marketshare begets developer support and public interest which begets further sales at a later time.