Pachter: Sony “Almost Certainly” Making a Profit on $399 PS4

[Quartz]

Miguel_Zorro said:

Quartz said:
£349 in the UK (not including shop profit) is still near the US $545 mark (At this time of writing). So really offering it cheap to US/Europe (bigger buyer base). Then shaft the UK for marginal profit...

I'd say that's clever, and it could sell near Wii levels in the first few weeks if supply isn't shafted.

The UK to Europe comparison is valid in some cases depending on the specific country, but the UK to US comparison is not.

The £349 price point includes 20% VAT - which means £291 before VAT. This is about $454 US.

The cost of doing business is also known to be higher in both the UK and Europe due to higher regulatory costs.  All in, I estimate that the profit margin isn't significantly different.

There's also the issue of the £6.31 minimum wage in the UK which works out to $9.84 US - so retailer profit margins are even lower.

The real deal is here in Canada.  We get it for the same price as in the US even though they have to create special bilingual packaging to comply with our laws, and incur a variety of other costs.  On the other hand, we have to pay another 13% tax on top of that.

Fair play.  Like I said i'm no expert, Minimum wage in ther UK is still £6.19 until it rises on 1st October to the £6.31 (woopie do!)

But to get ahead in sales I'd imagine that Sony will just smash out a loss to get the new consoles in peoples homes.