Sony console sales 2007

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Rugger08 said:

wiifm said:
@SlorgNet

If you add VAT, import taxes to EU, distribution, marketing budget, already wasted money on development and ongoing development costs for e.g. new SKUs, PS3 is anything but breaking even .....
That 30% annual cost reduction might be the case for some components but for sure not in general.
According to your calculation, $472 manufacturing costs would be around 79 percent of the EUR retail price which sounds anything but healthy ....
They can only break even if they sell massive amounts of software imho, that's where the profit is.

That doesn't even take into account retailer profit. Best Buy is probably making $50 to $100 of profit on each console sold.

 Actually retailers make very little on hardware(I don't know from experience, only from what people that work in retail have said).  So little sometimes that if a customer charges the purchase the retailer loses money.  They make most of the money on software.  The incentive for selling hardware at marginal profit is they generally receive larger shipments of software.