heprof00 said said:
USA ISN'T a profitable country for hardware. The currency rate means that Japan loses 10 cents for every dollar. 30$ loss on a 120g, just for what the money is actually worth. That is on top of the loss they already take for the cost of hardware. Shipping more consoles to a country doesn't increase the number of buyers for the console or the number of consoles sold. Yes there is excess demand on the 120g in the US, but there are still plenty of 250g ps3s lying around. Which proves once again that the concept of demand is beyond you. Price has an impact on how many people buy a console, and phasing out the cheaper console makes that group of consumers smaller, which, is idiotic if you make a huge profit on the games.
The concept of supply and demand is for supply to meet demand. For the case of 120gb and 250gb, its essentially a zero sum economy. If you increase the demand for 250gb, the demand for 120gb will decrease(unless you have some odd group who would purchase both 120gb and 250gb). So their best plan is to just lower the 250gb price a bit, to alleviate the demand for 120gb and increase the demand for 250gb.
Your explanation means that the 250g costs at least 350.01$ to make, right? That would be a loss. Just follow my logic for a moment. The difference between HDD costs is barely 8$ on a mass production scale. That would mean the ps3 120g would have to cost Sony 342.01$ But the 120g costed 336 in loss as of 6 months ago. Do you think the cost has actually gone up? What you don't understand is that there isn't a 1:1 distribution of the console sales. There are more 120s sold than 250s. That is the basis of demand. THe cheaper version of a product sells more. Now, if, out of 4 sales, 3 are 120s, then they are losing, say, 26$+26+26+n. The 6 cents per dollar on those consoles comes out to 75$. Set the equation to 0 and you get 26+26+26+n=75.....78+n=75....n, being the profit on a 250g console, we get 3$. This is a simple explanation for you.
Then, you have to take into account that roughly 45% of ps3s sold lose 10+cents on the dollar. In england and Euro countries they make about 20 cents on the dollar.
I don't think you understand the meaning of 6cent loss/dollar. I will reiterate: On a shipment of say 3 (120gb) and 1 (250gb), their loss for the shipment is 3*300*0.06 + 1 *350*0.06. This is what they given us. It doesn't matter if no consumer buys the 250gb, because its the retailer already purchased that shipment. So every 120gb console that they ship is a $18 loss and every 250gb is a $21.5 loss.
They are making a profit, as of last quarter.
Are they making profit off console overall? Thats the point of this whole debate.
Sure then. I understand that you need definitive proof. I'm the same way. When I take a shower, I will refuse to believe the water is hot until i get a thermometer in there.
If thats sarcasm, then lets say, you manage a swimming pool, your clients tells you that the swimming pool is freezing cold, then of course you would get a thermometer in there. The point of the thermometer is not for you to believe but to convince other that you are right. Thats the basics of a debate, facts -> argument -> conclusion. I am using the WSJ report of the 6cent/dollar loss to draw my argument and conclusion. You claim you have other facts that contradict my argument, such as the cost for making a 250gb is just $8 more, and they would earn a whole $42 more than 120gb. I inclined not to believe that, because I know most royalty and costs scale with price. Of course I can't argue if you have proof, but it sounds like you don't want to spend the effort to present.
The reward is helping you understand the concept. But, from here on out, I'm just going to wait for someone else to explain it to you, or for official numbers to come out.
I apperciate that you have invested so much time to this thread, more so than I have. It is a shame to see you just give up but I guess I am just the type that needs facts and sources to slap me in the face.
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