Plaupius said:
kn said:
Plaupius said:
Marty8370 said:
Pulling your HW loss figures out your ass I see.
Sony has reduced PS3 costs down by 50%, that put costs to make a PS3 at $400 from $800. Seen as the PS3 sells for $400-$500. Sony is either breaking even or making $100 from each PS3 sold, depending on model.
Also factoring in that the PS3 price varies from country to country. Sony could be well on course too recoup alot of it's initial loses, through hardwre costs alone.
I'd take a guess that Sony makes the PS3 for $400 now.They then sell PS3 at approx $360 too distributor, which then sells on for approx $380 too the retailer. Which would leave Sony with a small $40 loss per unit, and allowing distributor/retailer too make a small profit each.
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Well, to an extent the numbers are guesswork, but (and I made the same initial mistake) they are not HW loss/profit figures, they include everything else besides the manufacturing cost, i.e. marketing, R&D, general administration, ad placements and so on.
On another note, if the distributor only makes 20$ per PS3, and the retailer too, that's just insanely bad business. Granted, Sony does a lot of the work distributors normally do, but still I doubt 20$ is even enough to cover the costs of moving and warehousing the boxes. A somewhat normal distributor markup is around 30%, and for retail a bit less, but depending heavily on the product. I understand that game consoles are an exceptional breed of products, so I want to know if your figures are backed by facts or did you just pull them out of thin air?
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A tried to get a retailer friend of mine to locate me a PS3 80 gig MGS4 bundle and she said that all her stores were out and waiting on Sony. She then told me to just go to Wal-Mart as they had them in stock. She said they made $8 on each PS3 they sold and frankly didn't care if I bought it elsewhere -- just come back to her store for the games and accessories....
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Wow, I have known that the margins on consoles are low and money is made on games and accessories, but that low? That is just insanely bad business. I wonder why anybody is willing to even run and own game stores? It must be a calling of some sort, they're definitely not in it to make a buck.
Actually, this kind of margin structure and business model can not survive the rise of digital distribution of games and other content. I predict that in the foreseeable future, quite probably starting with the next gen, hardware margins have to rise up to the normal levels because with more and more content sold online, there will be less and less sales to offset the losses the stores currently take on console hardware. Meaning, in essence, that the prices of consoles will rise, or if the manufacturers wish to maintain the current price points, the specs have to be sacrificed and there won't be as big of a performance leap.
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