Is sony making money on the 40gb PS3?

[jalsonmi]

kingofwale said:
My opinion.

Cost to produce < $400

But Sony is spending money advertising + other costs.

I see it PS3 making money by itself (without needing PSP and PS2 to support it) in late this year.

They'd still be losing money if it cost less than $400. Having worked in retail, I can tell you for most retail sotres the minimum mark-up from wholesale to retail price is 50%. That would leave the wholesale price at around $275 for a 40GB PS3. Now, considering the high price of console sales and quickness in which they leave the stores, there's a chance the mark-up is less and Gamestop and whathaveyou have a system in which they get more of a mark-up on games than on consoles, but I still doubt it's any less than, say, 25%. I was a member of a food co-op, which was completely staffed by members (only about 10 paid full time employees for a 10,000 member food co-op) and is non-profit, and the mark-up on goods was still 23%, to cover maintentance fees and spoilage (obviously, the latter is not something Gamestop would have to worry about). Most supermarkets fall between a 55%-95% mark-up. The comic book store I used to work at was similar to Gamestop, in that the wholesale and retail prices were both set by the companies themselves. The mark-up was around 60%, varying based on number of issues ordered per title. Anyone know offhand what the mark-up on consoles is for, say, Gamestop?

Marketing is a completely different ledger item and is not something that would directly affect console price. Based on hardware alone, though (both in terms of the cost of the hardware and in terms of only looking at it via what they make or lose on PS3 console sales themselves), the PS3 is almost definitely still losing money. They'll have to get down to $300 or so for parts before they get close to breaking even on individual consoles.