So the customer that buys the PS3 (we'll stick with the PS3 since this is VGChartz) from Walmart has to BUY an ADDITIONAL $433 worth of items just so WalMart can BREAK EVEN on this promo/transaction.

That is a very big assumption and does not make too much business sense UNLESS there are other factors (such as manufacturer incentives).

Please feel free to add if there is anything I may have missed.

Obviously you are correct. In such promotions, the manufacturer almost always shoulders the majority of the burden. Which is to say that of the 100 dollars saved in this deal, $80+ of that total cost was shouldered by Sony, not Wal Mart.

Too bad you are factoring in that this was a Ps3 only deal... But really it was blu-ray deal. ANY blu-ray player.

So if you tweak the numbers a little bit, an incentive by Sony (in this example) to give/discount/rebate Walmart $30 (in Scenario A) for every $399 PS3 sold, turns this transaction into a profitable one ($4 profit).

However, if Scenario B is more correct, Sony (again just an example) will have to find an additional $80 to give to Walmart for this promotion to make sense ($5 profit).

If you guys have numbers for the MGS4 bundle, we can do the same calculation.

Not sure about profit, but at my local Walmart, Target, Bestbuy and Gamestop they were completely cleared out of all PS3 SKU's.

So it certainly helped with the install base.

Of course this is just my local area on Long Island.

Someone mentioned Bestbuy, Target and Gamestop honored the $100 gift card as well (anyone confirm), so maybe this could explain why these stores in my area were cleared out?

And who shoulders that burden? Primarily Sony.

Look, don't be obtuse. Someone is paying for the 100 dollars that is lost every time a Blu Ray player is sold during the course of this promotion. Wal Mart will  not be that someone, they never are. I would wager that 80%+ of the Blu Ray players sold over the last week were manufactured by Sony (either in the form of standalones or as a PS3). There should be no question that they took the biggest hit from this sale.

We know from Sony's FY report that Sony is losing ~120 dollars per PS3 sold. I would wager that over the last week, that total was ~180-200 dollars.

Why would Sony pay for a product being sold that's not just their own?

Sony is going to pay for samsung, pioneer, and sharps product being sold?

@ I Perdict

Yes, I was just using PS3 as an example - as this is a video game site.

However, even if it was for any Blu Ray player (eg. Samsung), the calculations should still be the same.

Therefore, for any other Blu Ray Player - Walmart must be making at least $94 for them to BREAK EVEN in this deal.

So $94 is the actual dollar margin on any Blu Ray player for this promo to BREAK EVEN for Walmart. Because if it is not, why do it? Wherever that $94 comes from, i don't know - but it has to come from somewhere, and most likely the manufacturer is shouldering most of that.

You are being obtuse. Is it deliberate?

I'm not arguing that Sony is paying for every Samsung Blu Ray player that is sold (of which there will be few, as standalone player sales are actually down). If you can agree that Sony isn't paying for Samsung's tiny sales, surely you can agree that Samsung isn't paying for Sony's sales? Obviously, Samsung won't be the one shouldering most of the burden. Their Blu Ray players likely comprised 5% or less of the total revenue from this sale.

Who is paying for the 100 dollars lost? I ask that question honestly. Every PS3 that is sold during the last week lost an additional 100 dollars per console. Who pays for it? The retailer -- especially one as powerful as Wal Mart -- is never the one to shoulder the burden of such sales.

Again, one last time: who do you think is losing the money every time someone takes advantage of this deal? Answer this question, please.

You're thinking too much about it.

Promotions go as sunk costs a lot of the times

Wal-mart is a huge company and can afford it

Also you are taking into account wal-marts profits are a set number

Wal-mart sells things that are more profitable. (Ex: Ice, slushies, gum balls, 25 soda, wal-mart brand items.)

Do they charge intrest on lay-a-way? (if so that interest is all profit)