Renar said:
ils411, Sony has announced that their production costs of the PS3 are now less than the sales price. Unfortunately, too many believe that means they are making profits on the PS3 hardware, which after adding in the non-production costs (fixed overhead, costs of getting the unit to the retailer), they are not making a profit on the PS3 hardware. In a similar manner, their announcement of $3.3B in losses for the PS3 1. could be speaking of production cost losses, i.e., average cost life to date of a PS3 is $800, average sales price to the retailer is $500, net loss of $300 per unit, times the 11M units at the time of the announcement would be $3.3B. But bumidan could still be correct if the addition non-production cost were added in, to get to the total $5.5B overall loss. "i would assume that you over estimated ps3 loses and at the same time under estimated the gaming devisions profits." 2. That would be impossible for bumidan to be doing both of those. He knows based on Sony financial reports the operating income of the game division overall for the last 4 years. The operating income = the gaming divisions profits (of PSP, PS2, PS3 software, misc.) plus the PS3 hardware losses. If the losses of the PS3 are not as much as bumidan's numbers, then his estimate of the gaming division HAS to be OVER-estimated.
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and the key word here is "coud be". they "could also be" speaking of total losses including R&D + manufacturing/production costs + fixed overhead cost + what ever costs they could have incurred with the ps3.
1. keep in mind that at the time of the announcement of this $3.3B lose, sony had already gone through multiple skus each with varying production costs. we have the 20gig, 40gig, 60gig, and 80gig. i'm guessing and an emphasis on guessing that the 40gig is the sku which is losing the least amount of money for sony, followed by the 80gig, 20gig and 60gig. which is probably why sony discontinued the 20gig and 60gig. of the 11m units, how many are actually 80gig models? 60gig? 20gig? 40gig? we cannat assume an average net loss of $300 per ps3 as there are multiple skus.
to further explain my point, uppon launch of the 40gig sku (oct 07 iirc), the ps3 install base was at around 4.9m (launch - sept 07), then sales took a giant step forward from an average of 60k-70k/week to 150k/week. so, of the 11m install base, the 1st 4.9m is comprised of 20gig, 60gig and 80gig models. then the remaining 6m is comprised of 20gig, 60gig, 40gig and 80gig models. now, judging from the sales boost that the ps3 experienced, plus the fact that the 20gig and 60gig and the 80gig (to some extent, japan for example) were discontinued, we can assume that majority of the 6m are 40gig skus. this would significantly bring down average net loss per unit of ps3 sold.
2. it goes hand in hand, if bumidan over estimated ps3 loses, then obviously, he would have also have underestimated the ps3/psp profits.
