And one more thing. The reason why I pointed out the "raised licensing fees" issue was because I thought you were saying they would be higher on the PS3 than they were on the PS3 the year before, not in relation to the PS2 or PSP. Otherwise, this statement may make more sense than I first thought.

What the hell does that even mean?  (I don't need the definition of the economic terms, I need the sentences explained to me, and how they are supposed to relate to one another.)

You are correct Arkk.  I did raise the Net Profit for PS3 Software to $3(*) per unit, just for the FY end Mar 2009.

Again, the reason is because with increasing online distribution/downloads, the net profit margin on those should be greater for obvious reasons. 

If we use the same $2(*) net profit assumption, then the profit projection would have been $183(*) million, instead of $290(*) as was in the original post.

Loud_Hot_White

To explain - the numbers we used were:

PS3 Hardware

Net Profit FY End Mar 2007 = ($481.50)(*) LOSS PER UNIT

Net Profit FY End Mar 2008 = ($210.50)(*) LOSS PER UNIT

Net Profit FY End Mar 2009 = ($60)(*) LOSS PER UNIT

Keep in mind that Loss Per Unit is the NET Loss - taking into account all other costs, not just component costs.

Also, loss per unit decreases because the fixed costs are spread out over more units sold, as well as reduced unit production costs.

Hope that explains it. 

If you are unsure why those numbers were used, please check out my previous thread explaining how those numbers were derived.  It's the New and Improved Sony Analysis thread.  Just check my post history as I am too lazy to look it up. 

Thanks.

I'm not quite as optimistic as the OP....I don't think that the games division will make money but due to the movie service offering more revenue, I do think that this will be the last time that we see a negative quarter for the games division. So things are looking up.

I don't think the Sony HW losses are as big as you think, per-unit. The 40GB, and future 80GB have 65nm Cells, memory, and GPUs -- the numbers you're using appear to be from the current 80GB model, which still have a few 90nm components, as I recall.

Most of the remaining PS3s sold this year (read: holidays) will be much cheaper to manufacture than previous PS3s have been.

thanx for ur time
what do u study?
i hope this site has more like this threads

I believe with the hardware manufacturing costs slowly dropping, and improved yields for the CELL and RSX, and the fact they are earning more on software sales now is the reason why the PS3 will be able to pull itself a profit. I also believe that due to the new video store and increases in PSN purchases they are pulling in even more money from that.

The PS3 wont be profitable yet on the hardware but I think the software is what will save it. Also I think as Blu-ray increases in sales, the rest of Sony wont wince as much if Sony did cut the price a touch.

Still the switch from a 40GB HDD to an 80GB HDD actually boosts manufacturing costs by $10 - 15 so the can just stick with the upgrade for a bit.

i dunno, nothing has really changed from the first quarter to this most recent one, and in the first one of this year the games division lost money. Now, with the video store coming in, I think that Sony will have a great chance the earnings release after this to be in the black.

The games division in the 1st Quartr lost 124 billion in income, and using that as a base figure, my prediction would be that the games division will lose perhaps only 20 billion yen, because things like MGSIV, lower manufacturing costs and such will help but they won't be a huge thing.

@ bumidan

you realize that ps3 1st party software is going to become significant at least in the near future. therefore, using $3 per software sold may not be entirely accurate