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

[NJ5]

drkohler said:

NJ5 said

"Dan, your second question, PS3 cost update, since the introduction the cost has drastically decreased. How much I cannot disclose it. However, we can expect that sometime in late fiscal year '08, the cost to be equal to the selling price. Currently, the cost is higher than the price, but toward the second half the fiscal year '08 we could catch up.

"toward the second half the fiscal year '08 we could catch up" - meaning sometimes between August and September this year. At the time of the interview, they were still cautiously wording their expectations (remember their prediction of 10mio PS3 sold in fiscal year 2008, almost the same number as fs2007). However, we see that PS3 has been selling at much higher rates this year compared to last year (Sony probably expected worse rates). If we assume that manufacturing runs generally take about 1-3 months until they reach shops, we are exactly in the right timeframe for profitability with units _currently in production_ (notice that I always stressed this point in my previous posts). If they could, as was hinted, reduce the costs even more than expected, it is entirely possible that some of the manufacturing runs from the last quarter of fs year 2007 are already cost neutral _now_. Again nobody knows for sure about the exact values except Sony, and they are not going to tell anyone.

 

 

Actually the second half of the fiscal year starts in October, and in another part of the quote he says "late fiscal '08" but enough with the nitpicking... The information is there, and it's what it is, now may each one interpret it as they want.