I don't get it, we knew PS3 was selling for 500 and 600 dollars respectively when it was released, and we knew that Sony was losing close to 400 dollars per console, but to create a thread now talking about it is just stupid. Now its actually the opposite, with the games division looking to make a profit for the rest of PS3's lifetime (ten years according to PS3 execs). Production cost is now estimated at around 400 dollars per system, and that number will only shrink as parts become cheaper.

Edit:

And lets not forget the Billions 360 set aside for the rrod crisis. And that 360 too was losing money per console sold, just not as much.

Sony isn't losing billions anymore, they lost billions. Big difference. Just like 360 lost billions, because they are profitable now doesn't mean they are profitable for their lifetime, it means last month they were in the black. PS3 is now expected to be profitable and if you want to get technical, it was faster then 360 because it was released a year later. These HD systems have to lose in order to gain with the prices of parts.

Suddenly, this turned into a vinyl versus digital?

Well I have records, and to quote Bill Maher, "I know how records sound: scratchy."

Not to say I don't enjoy them, but I prefer the cleaner sound of even moderate bitrate MP3s.

Then again, I don't like to play music too loudly, because I like my eardrums, but even then I just hear louder scratching with vinyl.

@Ail.

Yes, you are correct.  In this case, then if you assume that the loss per PS3 is less, then there is a huge loss of around $500Million Dollars tucked away somewhere.

This could be any of the things you mentioned, as well as possibly cost of maintaining PS3 online, etc.

The point is to make a simple analysis.  It is reasonable to estimate the cost/loss/profit per item, because you usually include all other costs associated with a particular product, not just actual product cost.

For example, if you make a car but need to advertise to sell it, then the advertising cost is part of the cost of the car.  You can not justify separating that cost from your financials.

And in this case, Sony reported only the PS2, PSP and PS3 figures in their statements - which if you read financial statements - means that these are the MATERIAL figures investors need to know to make investing decisions.

All other numbers may be too small or irrelevant - and therefore IMMATERIAL to the financial statement.

I don't think those costs are irrelevants.

To answer your car analogy do you know that a few years ago GM had huge costs per car due to pensions ? it's not a hardware cost but still was there.

The issue with the costs I mentionned ( salaries, advertising,...) is that they don't increase when you sell more, which I believe is the point of computing a loss/PS3 sold.

 Look at others game developers, lets say Ubisoft, that company has yearly costs of 1 billion $ and they don't make any hardware...

I don't think the gaming division is as big but I really woudn't be surprised if running it didn't costs between 300 and 800 million $ a year.

Roflcopter.

What advice haven't I heeded?  Hell, I went out and bought a Wii. I'd say that I pretty much ran the gamut from Denial to Acceptance and in quick form I might add... 

But you're still spouting nonsense that Microsoft isn't in a lick of trouble, months later.  So maybe you, as well as Legend11 should heed my advice:  The 360 is in trouble, and there is no victory in it for Microsoft, as Legend believes.  If you believe that being outsold every week for the last seven months is a "victory", you seriously need your head checked.   And if MS's price drop in America goes over as well (or not, lulz) as the European one, the next thirty five weeks, and beyond will be exactly the same.

Stop living in Denial, start being angy so that you can move on.  Once acceptance comes, it's so awesome.  Now that I've accepted that the PS3 is not doing that great (comprable to the Wii) this generation, I own a Wii.  A hell of a gaming console that I wouldn't have owned had I not accepted it.  If you just accept that the 360 is relegated to last place, and there is no victory in that for Microsoft, you too could enjoy a hell of a gaming console (The PS3), far more than you hate it. 

Don't be bitter over this loss too long, just move on and accept the truth, and the facts, and the data.  Not the voices in your head, or your delusions.

You do realize that since 95% of the console owning population doesn't see fit to own more than one current gen console at a time, that acceptance != to owning another console?

Where does the delusion phase fit in? Because you fit snugly into that category!

I still heart you btw, but you're silly.

Just two stupid questions here:

1. When Nintendo, MS and Sony shows up their numbers of their gaming division, is the cost of a next-gen development included? I mean, I supose their spending some $$ on research on a next-gen (wii 2, xbox 720 and Ps4), those money "lost" apears on the actualy numbers "reports"?

2. As you can read on the link, Sony lost 18% of it's sheres value (in 6 months), 2% last friday. Aren't those losses worse than selling Ps3 for U$ 300 now?

"The shares fell 2.3 percent to close at 5,100 yen on the Tokyo Stock Exchange. They've lost 18 percent this year, compared with an 8.1 percent decline by the benchmark Topix index."

http://www.bloomberg.com/apps/news?pid=20601101&sid=a5KY_KmOXF_I&refer=japan

1- Yes, everything the gaming division does is included there (or at least, it's supposed to be). But I don't think they're spending a lot of money in the next-gen yet.

2- That loss is supposed to be the reflection of everything which happens to Sony's business, PS3 included. But I think it's mostly due to the worsening economy. Sony makes a lot of products which might suffer in sales if the recession gets worse (e.g. luxury items like HDTVs). The falling US dollar doesn't help either. Many companies' stock fell because of those two things.

But I tought that the "Sony's TV business" that they where reporting was the Sony movie/Tv studio and not the Tv building process devision. but I got what you mean. I got what you mean, you might be right!