Estimated PS Vita bill of materials : $159.10

[mike_intellivision]

Chark said:

mike_intellivision said:

Chark said:

No! Read the Reuters article that this article got its info from. Kaz says "turn a profit within three years of the body of the Vita sales". That does not mean that the Vita isn't selling for profit now and won't for 3 years. It means that in 3 years they expect the Vita to have brought in more money than it cost to make. That includes manufacturing, R&D, advertising, etc. 

Haven't I corrected you on this before or are you another victim of miscommunication created by terrible article writters on the internet.

If I recall that article, it was three years and 70M sold to turn a profit.

And profit here means positive return on investment, including covering sunk costs, which I am sure is part of Sony's (or any business's) calulations with a new product.

 

Mike from Morgantown

They were talking seperatly about reaching PSP sales levels within the Vita's lifetime then they started talking about profit, so they were not related. 3 years to have return on investment indicating that either:

1) the Vita hardware is selling at a profit,

and/or

2) Vita software and accessories are providing overall profitability for the product as a whole. 

The confusion is created by those websites that mistranslated, misunderstood, or purposelessly spun (lied) that Vita was being sold at a loss despite Sony never saying that and discussing return on investment profitability 3 years down the road.

He was right. I went back, found the original article, and saw how it confused me.

That being said, the $160 is the components only.  So it will take a while for it to be profitable per unit -- before discussing overhead and other costs.

(I work for a university and our overhead rate on grants is 46%. That means for every $1 you spend on a grant directly, another 46 cents has to be used to support internal operations which work for the grant. That sounds high -- and includes salary fringes which may not be germane here - but it points out that there is more than just direct cost to consider here.)

 

Mike from Morgantown