http://www.sony.net/SonyInfo/IR/financial/fr/07q4_sony.pdf

Based on Sony Reported Numbers - Fiscal Year Ending March 31, 2008 (12 months)

Below is a simple (crude) analysis to figure out Loss per PS3 Console.  Please revise if you have more accurate numbers for PS2, PSP and PS3.

There are 2 figures - Revenue per Item and Income(Loss) Per Item that are needed.  I've made assumptions on these, but let me know if you want to change some numbers around.

28 pages... zoinks.

The exercise is to play with numbers to approximate how much loss on PS3 Hardware did Sony endure for the FISCAL YEAR ending March 31, 2008.

SONY Game Division

Revenue (USD) - $12,842 (Million) or 12.84 Billion Dollars

Operating Income - ($1,245) (Million) or 1.245 Billion Dollar LOSS

Revenue is assumed to be what retailers pay Sony, NOT RETAIL PRICE.

I don't know how to do tables so I will do the best that I can to cut and paste from Excel.

HERE COMES THE NUMBERS:

REVENUE
Unit Sales Unit Revenue Total Revenue
Hardware (Millions) (in USD)
PS2 13.73 109 1,496,570,000
PSP 13.89 135 1,875,150,000
PS3 9.24 450 4,158,000,000
Software
PS2 154 20 3,080,000,000
PSP 55.5 20 1,110,000,000
PS3 57.9 20 1,158,000,000

12,877,720,000

To Explain:
FOR REVENUE, the total is $12,877 which is APPROX. the same as the reported number of $12,842.

Hardware:
PS2 - $109 per unit
PSP - $135 per unit
PS3 - $450 per unit
--let me know if anybody has a more "accurate" number. Again, this is an average for the whole year.

Software:
PS2 - $20 per unit
PSP - $20 per unit
PS3 - $20 per unit
--I assumed that Sony gets $20 per software title on average. Let me know if you have numbers that are different for PS2, PSP and PS3.

However, if you change the numbers around - the TOTAL REVENUE should still be around the same number as the reported number.

That REVENUE PER UNIT is the only number we can change. All other numbers are from SONY itself.

OPERATING INCOME:

OPERATING INCOME
Unit Sales Unit Income Income
Hardware (Millions)
PS2 13.73 10 137,300,000
PSP 13.89 10 138,900,000
PS3 9.24 -400 (3,696,000,000)
Software
PS2 154 8 1,232,000,000
PSP 55.5 8 444,000,000
PS3 57.9 8 463,200,000

(1,280,600,000)

The TOTAL LOSS OF (1.28 Billion) is about the same number as what Sony reported (1.245 Billion)

You can see that the ONLY number that is a LOSS is the PS3 - in this case $400 per unit.

The ONLY way to decrease the UNIT LOSS on the PS3 is to assume that other units are not making as much (unit wise) or actually losing money.

If anybody has a PS2 and PSP number, that would help.

IN THIS EXAMPLE, PS3 loss per console to SONY is $400 on average, which is a HUGE number.

The loss can be smaller if we assume that Sony is losing money (for the fiscal year) in the PS3 software department.

That is the only area which makes sense. UNLESS, they are also making less from PSP Hardware or Software.

These assumptions are based on the PS2 actually making money for SONY.

There is a large cost for Sony to develop and market their software.

Yup.  Sony employs more developers than Microsoft and Nintendo combined.  They are the third largest developer, behind EA and Ubisoft.

@OP: Sony wasn't losing $400 per console at launch, let alone for the entirety of last year.  At launch, it was estimated that Sony was losing around $306 on every 20gb ps3 they sold and around $240 on every 60gb ps3 they sold.  Since then, they've been cutting costs in various ways, including decreasing the size of the Cell, removing the ps2's Emotion Engine from the 80gb ps3s, and removing both the ps2's Emotion Engine and Graphics Syntehsizer from the 40gb ps3s.

And the cost of Blu-Ray diodes had come down well over a  hundred dollars since launch as of last June.  They were estimated to be around $8 a piece in June, compared to $125 previously.  It was this that lead many to predict a $100 price drop for last year.  Then the 40gb ps3 appeared in October.

Those are some enormous losses. Even if they achieved to reduce costs, the 100 dollar price drop the PS3 had once again meant more losses.

I would doubt Sony will be able to perform another pricecut this year, considering the PS2 is about to die, so compared to last year it won't bring that much profit. If there's another pricecut the losses would be HUGE.

I find it unbelievable that the losses this gen for Sony are already bigger than the profit they made with the PS2.