Sony console sales 2007

[crumas2]

SlorgNet said:

Game_boy said:

Sony is losing money. Sony has low software sales. Sony is losing in each market segment it is in. Sony's products are either declining ior remaining constant in sales. Therefore, Sony has little influence over the video game market. Selectively quoting figures won't change that.

As for PS3 losing money, after the PS3's launch iSuppli calculated a single PS3 cost $800+ to produce without factoring in marketing, development and distribution costs. Sony sells PS3s to retailers for slighly less than $499 or $399. A 50% drop in price in just over a year is impossible.

The PS2 outsold the Xbox360 last year, while sales of the PS3 have pulled even with the 360 since November. Sony's software sales are fine - the PSP is a bit low, but they also sell media content, so it's a wash.

As far as price goes, iSuppli's list included the startup costs for BluRay ($125 for the laser diode) as well as the backwards compatibility chip ($25). The diodes are down to $20 or less, and the EE chip is gone. All the other components will get a 30% annual cost reduction, which is standard in the electronics biz. Net result: close to a 40% cost reduction, which means the PS3 is close to breakeven. Here's the math:

$804 - $105 (BluRay savings) - $25 (EE gone) = $ 674 X 0.70 = $472.

Throw in the appreciation of the euro (the 399EUR model = $599 US) and the PS3 is close to breakeven on manufacturing costs.

 

I agree they're getting closer, but there are other costs such as distribution, marketing, etc., etc.  My guess is Sony will be making money on each unit by 4th quarter, assuming they don't drop the price again before that time.