Sony now loses $18 for every PS3 sold

February 4th, 2010 at 1:14 pm -

Although the PlayStation 3 Slim has prompted a resurgence in Sony’s home console business, prompting 10.8 million PS3 sales in just nine months, the console is still losing money for the company. At least, the console’s hardware is losing money, since software sales turn this into a profit. However, this hardware loss is nowhere near as significant a loss as it used to be.

Following the console’s price-cut to $299 in the US and the release of the revised hardware with the PS3 Slim, Sony has been able to reduce it’s loss to $18 on each console sold in the US. Although it’s harder to work out in the UK with 17.5 per cent VAT to think about, with the higher price and the current dollar-to-pound exchange rate, it wouldn’t be out of the question to suggest that the console is turning a profit in Britain.

This piece of information is found within an interview with Sony’s Chief Financial Officer Nobuyuki Oneda, who explained that the company expects to continue reducing the production costs of the PS3 by 15 per cent by March 31st 2011, which is expected to result in “tens of billions of yen.” It was then revealed that Sony loses approximately six cents for every dollar of PS3 hardware sales, or $18 for every $299 console sold in the States.

This means that with the console’s approximate attach rate of seven games per console, the company is now earning a healthy profit on the PS3’s combined hardware and software sales.

Told ya so (you know who you are)

LOL well 6 days ago I bought a phat 40 gb ps3 from gamestop so that lost is more then 18 for Sony LOL

bu bu bu but it's $200, wer still in 2007 this cant be true!!!

How do they know he is talking about the 120GB version and not the 250GB version?

About that 15% reduction for the next 15 months, this means the cost to make a PS3 will not be below 250 dollar at the end of March 2011. Sony might not be able to release a 200 dollar PS3 until somewhere in 2012, at least if they don't want to lose a significant amount of money on it.

Is making a profit everywhere except the USA methinks (sells here for the equivalent of $340 US (after taking off the sales tax)). Which is why the Q3 earnings for their Networked Devices Division were in the black.

Good news. They'll be able to pack in the Arc + Eyetoy with all consoles sold and hold the same price (or maybe even drop it by a small amount ($25 in the USA)). That should get the motion control install base up pretty quickly.

so does this mean Sony is doomed?

They're just talking hardware, what about the cost of Playstation 3 advertising? Or the amount of people required just to keep that part of the business running. What about their cost for online, is Playstation Home and other PS3 online sales making enough to pay for it? Remember that other companies get a cut of many of those sales as well.

Also with the amount of layoffs in the video game industry, including at some of Sony's own studios I have to question just how profitable they are as well. Just remember that many of those companies closing are multi-platform while Sony's are basically developing for their own consoles. For every hit they have they also seem to have another game that sells poorly.

I hope this puts the bed the argument over how much Sony is losing per console and ends all these crazy fan-boy rants about sony still losing $$$ on each sale.

Don't they all have these or similar issues? They all have marketing and development costs, they're all looking to make savings and cut HR costs, they're all protecting their profits, they all have staffing cots, thats just the way things are, Sony aren't the only ones with overheads.

They all have to spend money to make money.