PS3 a faster money sink than the Xbox? I can see why no price cuts soon.

[Ail]

bumidan said:
I would like to join this discussion. Please refer to my thread:
http://www.vgchartz.com/forum/thread.php?id=30391&start=-0

Repost:
I want to get your opinion on the original numbers:

PS2 hardware - I assumed they make $15 per unit - do you have a different number in mind?
PSP hardware - I assumed they also make $15 per unit
PS3 - what is the hardware loss? I assumed $306

PS2 software - I assume they make $8 per unit
PSP software - I assume they make $8 per unit
PS3 software - ???

Basically, we have to assume 5 variable to come up with the 6th variable.
Based on those assumptions, then PS3 software LOST
$8.8 per unit on 57.9 million units sold
or a TOTAL of $508 million dollars JUST ON PS3 SOFTWARE ALONE.

Does that make sense? I ask you guys because I am not very familiar with Sony's numbers.

On the flip side, if you assume PS3 software makes money,
even at a modest $5 per unit or a total of $288 million

then

PS3 hardware lost an average of about $390 PER UNIT

Which is a likelier scenario in your opinion?

Sony Games LOSS - FY ending Mar 200 - $1.245 Billion USD

When replying, please let me know your assumptions of 5 variables, then the 6th variable can be calculated.
I can recalculate - very simply - using excel

NUMBERS FOR YOUR REFERENCE:

OPERATING INCOME
Unit Sales Unit Income Income
Hardware (Millions)
PS2 13.73 15 205,950,000
PSP 13.89 15 208,350,000
PS3 9.24 -306 (2,827,440,000)
Software
PS2 154 8 1,232,000,000
PSP 55.5 8 444,000,000
PS3 57.9 (8.77) (507,860,000)

(1,245,000,000)- THIS NUMBER IS CONSTANT

I think the 8$ per PS2 software was probably true when last gen was still going however seeing how these days most PS2 games are selling new for 30$ or less I would suspect at this point Sony make less per PS2 game sold.

I think there is a huge cost that is not mentionned but I believe is wrapped under the gaming division financials.

Sony owns a lot of development studios ( many more than Microsoft for example) and most of those ( aside from Insomniac and naughty Dogs) have yet to release a PS3 game so those studios are currently costing a lot of money to Sony every quarter ( seeing the number of studios we are speaking over 100 million dollars a quarter..)

 Then you have to add all the personel of the gaming division that are not developers in first party studios, this is probably a fairly decent cost too...

Then add the marketing budget of the gaming division, probably a decent number too.

I mean you have whole organizations like SCEE, SCEA that I believe are wrapped under the gaming division, this means those number cover stuff like Everquest, Everquest 2, Vanguard and others too..

Really it's nowhere near as simple as you make it look like to compute the loss per PS3 sold..