PS3 price cut hot potato passed again.

[LordTheNightKnight]

sanderz1 said:
All of those PS3s sitting in warehouses are NOT money already spent. Those things have to be inventoried and taken into account whenever Sony releases a fiscal report. It's the same thing with every business.

At the beginning of a period, you have to count your beginning inventory and it is listed as an asset. Since they are listed as an asset, it's NOT money already spent. All those consoles were inventoried at either their $800+ cost or their $600 sell through worth.

Either way, if Sony drops the price, then they have to take a loss on that amount on each console and it will make their beginning inventory inflated, which means that it won't actually be as high as they think.

If they have 2 Million consoles sitting in warehouses, and they drop the price by $100, then that's a $200,000,000 hit that their profits are gonna take all at once that they cannot possibly recoup.

 They cannot possibly recoup? The PS2 sold at about $100 loss the first year or so. That was around five times that many systems, and they still made that money back.

 You are obviously forgetting how important software sales come into this. More systems usually means more sales. Of course the PSP is an exception (and Xbox doesn't count here, since Sony didn't sign bad pricing contracts with their proccessor providers), but the point is you wrote "cannot possibly" which isn't true. It is possible to recoup costs by increased profit later on.