OK. So if we change the the AVERAGE loss PER UNIT for FY 2008 to $300 per unit (on the assumed REVENUE PER UNIT OF $450 per PS3 and given the same assumptions for PS2 and PSP,

Then the PS3 GAMES division, which includes software sales and development cost

LOST approx. $420 Million Dollars for Fiscal 2008. Which is also a HUGE LOSS.

Does that seem reasonable? Again all our numbers are just based on the SONY reported numbers. So in order for the PS3 division to lose less money, then we have to assume that the PS2 and PSP divisions make so much less OR actually lose some money.

Any other numerical assumptions by anybody else?

Sony cut loses nearly in half... thats impressive. Considering Sony posted profit in the game division in the 2nd half of their fiscal year this would mean they should be able to pull a profit themselves out of the hole by the end of the first half of this fiscal.

These numbers do not seem too far off. I saw an analysis of the numbers when they came out in may and they came to around 300 or so per console IIRC.

bump

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 OT: Sony need to leave the PS3 to stop loss money.

I think Sony will concentrate on profitability instead of trying to capture the market.If they can vastly reduce cost on each unit manufactured this year (ike the rumors are saying),and maintain a 499.99 and 399.99 price point throughout this year-their next fiscal year could see a slight price-cut and profitability.Then they can keep selling the PS3 for another 4 or 5 years and make up those cost.All while starting over with the PS4 at a 399.99 price point(due to cheaper blu-ray drives.)

i dont know how many times this needs to be stated. sony is extremely good at hardware cost reduction and also is extremely secretive about the costs.

i do not know the costs and u do not know the costs. its fruitless to argue when the range of potential costs is huge.

@ssj12 - I understand. I am just taking an average for the full year.

If you assume that Sony lost on average $300 per console for the fiscal year ending Mar 2008, then that means that it COST Sony an average of anywhere between $800 to $1000 per PS3.

Which makes some sense because Blu Ray DVD Players were retailing around that price when they first launched - which most likely included a profit element.

For Sony to launch at $599 was really CRAZY. Either Microsoft really forced their hand at releasing the PS3 WAY earlier than they wanted
OR
they though Blu Ray was going to be adopted en masse by DVD users (even though they had HD DVD at that time to "fight" with)

As an observer, the simpler explanation would be the former
because as shareholders/managers of Sony Corp, there really is no justification losing $300 per console. To break even, they would have to assume that a PS3 customer will be buying around 10 to 15 games JUST TO BREAK EVEN on the transaction.

Well the PS2 was sold at a lose too. Sony is known for being a loss leader in all their areas of business. They launch each generation of TVs, cameras, etc at a lose and within a month or two cut costs enough to make a profit off of them.

@ soccerdrew - Of course we don't know the exact costs

But we can infer based on the reported numbers by Sony.

If you assume PS2 hardware and software makes money
and
PSP hardware and software makes money

Then

PS3 hardware LOST (in the past) a lot of money

and if PS3 software made money (which most likely is NOT the case),

then PS3 hardware LOST even more money

Again, this is based on the PAST , fiscal year ending Mar 2008 on ACTUAL SONY NUMBERS.

If refuting, please refer to the original posts and see which numbers you want to change (on the PS2 and PSP)