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starcraft said:
DMeisterJ said:
 

Yeah, but Sony *has* to move software to become profitable, and that'll only happen if they sell more, and they'll only sell more if they have more consoles out on the market. They need to get PS3s out there, no matter the loss, so they can make it back in software. I wouldn't care if they were selling it at a 200 dollar loss, as long as they were having a solid attac rate, it'd all be cool.


But you have to remember that Sony only makes $20 TOPS per game sold, more for First party (though my original estimate could be too high). So unless your talking about an attach rate of 15 games per console (some games will be budget or discounted, and you need to make enough to PROFIT not just break even) then a $200 loss is far too big to sustain for long.

As for the bolded part I totally agree, its a vicious cycle.


 Vicious, it's horrible. 

But Sony was losing a reported 200 dollars when they first launched a few years back.  Reports are that they're breaking even on the forty gig, and the PSP is having strong software, and PS2 isn't dead, I think that they can sustain a price drop of 3/4.  Even if they can't, just do it to keep it competitive.  With the Arcade being less than the Wii, and Nintendo not dropping the price, it will be like launch all over... and we all know how that went.