SONY LOSSES, especially PS3 – New & Improved Analysis - End Mar 2008

[Sullla]

BengaBenga said:

Nothing is impossible, but it's highly unlikely.

1) Sony's shipment target for PS3 is 10 million (april 2008 - march 2009). They'll easily make it at the current pricepoint, hence no need for a pricecut.
2) Howard Stinger even mentioned the need for profitability at SCE. It's the first time in years I heard the CEO of Sony talk so directly about SCE's strategy. They used to have quite some autonomy within Sony. It's a big issue (see the figures I posted above, SCE is responsible for a profit drop of over 25%) and a pricecut will have an enormous impact on the profitability.

A simple calculation: Pricecut of $100 x 1 million PS3's is a staggering 100 million less profit.

I agree with you Benga, but there's an even better way to illustrate how costly price cuts can be:

Sony is planning (in their financials) to sell 10 million PS3s this fiscal year. If they cut the price by $100 on each unit, that's a loss of $100 x 10m = 1 billion dollars. Maybe everyone will keep that in mind when discussing what each company should and shouldn't do in terms of sales.