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Forums - Sony - Sony Cuts PlayStation 3 Production Cost 35% in Push for Profit

NJ5 on 30 December 2008
kn said:
I guess I'm not understanding well. Speculation is that the PS3 is nearing the breakeven point where they will no longer be taking a bath on each one sold. That means they can get into the black on the unit... Stating that the price reduction will allow them to now cut the price just puts them right back where they are now... If they do cut in the spring by $100, they will be back to losing at least $100 per console. If they plan on selling 10 -15 million units through 2009 (which would most certainly happen at $299!), write off another $1 to $1.5 billion. Does anyone really believe Sony would do that?

Yes, people often ignore this. Breaking even on hardware means they can't cut prices yet if they want to be profitable.

Before someone says "but the software!", note that to get $1 billion back Sony has to sell 50-100 million software units, not including the bundled ones. That's before they even start covering operating expenses, those 4,000+ SCE employees aren't paying themselves.

 



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nightsurge on 30 December 2008

Old news. Posted many times already.



Rainbird on 30 December 2008

I don't see why everyone is saying the PS3 will be profitable when it costs Sony 400$ to build one. 400$ is the price retailers are selling it for, therefor it needs to go even lower than that.
I don't know how much lower it needs to go, and maybe I am just blowing smoke here, but it seems weird that the "sweetspot" would be at 400$ to me.



nightsurge on 30 December 2008
Rainbird said:
I don't see why everyone is saying the PS3 will be profitable when it costs Sony 400$ to build one. 400$ is the price retailers are selling it for, therefor it needs to go even lower than that.
I don't know how much lower it needs to go, and maybe I am just blowing smoke here, but it seems weird that the "sweetspot" would be at 400$ to me.

Actually it was $450.  And after you factor in shipping, warehousing, warranty, online free, etc. plus the discount that retailers get, say $380, they are probably still taking a $90 loss as of right now.  Sure they can probably drop that $90 throughout 09, but if anyone really thinks they will rush right in with another $100 cut and start this all over again is crazy.



McStormy1 on 30 December 2008
cdude1034 said:
Smashed said:
dolemit3 said:
A 69% drop in the stock price in just one year is BIG. Can Sony really recover now?

 

I'm sick of these posts.. You guy's make it seem like Sony has NO chance at all. Which is very untrue.

 

This generation is over. Sony, the PS3 and the PSP have no shot at winning this generation both in console and handheld gaming.

Did you mean next gen?

 

Sony is still in a very good position of selling 100+ million units of the ps3 this gen. Maybe not Wii numbers but it will catch up  massively to a possible very close number 1/2 finish.

 



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HappySqurriel on 30 December 2008
McStormy1 said:
cdude1034 said:
Smashed said:
dolemit3 said:
A 69% drop in the stock price in just one year is BIG. Can Sony really recover now?

 

I'm sick of these posts.. You guy's make it seem like Sony has NO chance at all. Which is very untrue.

 

This generation is over. Sony, the PS3 and the PSP have no shot at winning this generation both in console and handheld gaming.

Did you mean next gen?

 

Sony is still in a very good position of selling 100+ million units of the ps3 this gen. Maybe not Wii numbers but it will catch up massively to a possible very close number 1/2 finish.

 

 

I hope this isn't the "10 year plan" myth ...

If you make the assumption that Sony does not see declining sales over the rest of the generation like trailing consoles typically do, Sony would have sold around 45 to 50 Million consoles by the time the next generation begins. When new consoles are on the market trailing consoles tend to see far lower sales, and it is highly unlikely that Sony would see over half its sales after the next generation begins.



Seece on 30 December 2008
McStormy1 said:
cdude1034 said:
Smashed said:
dolemit3 said:
A 69% drop in the stock price in just one year is BIG. Can Sony really recover now?

 

I'm sick of these posts.. You guy's make it seem like Sony has NO chance at all. Which is very untrue.

 

This generation is over. Sony, the PS3 and the PSP have no shot at winning this generation both in console and handheld gaming.

Did you mean next gen?

 

Sony is still in a very good position of selling 100+ million units of the ps3 this gen. Maybe not Wii numbers but it will catch up  massively to a possible very close number 1/2 finish.

 

Blind. Fanboy.

 

That is all.

 



 

NJ5 on 30 December 2008
McStormy1 said:

 

Sony is still in a very good position of selling 100+ million units of the ps3 this gen. Maybe not Wii numbers but it will catch up  massively to a possible very close number 1/2 finish.

 

So how is Sony going to pull that off?

 



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ssj12 on 30 December 2008

at 35% drop when we are about to hit the slow season of sales, not a shock. M$ and Nini will also cut production but not be so vocal about it



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Rainbird on 30 December 2008
ssj12 said:
at 35% drop when we are about to hit the slow season of sales, not a shock. M$ and Nini will also cut production but not be so vocal about it

Well, Sony isn't exactly vocal on this either, seeing as they had nothing to do with it. iSupply just split a PS3 apart in did their own math, there is no reason they couldn't do the same to a 360 or a Wii.