dbot said: It is becoming increasingly likely that the 50/50 cuts will occur. $50 at the start of the fiscal year, and $50 in the Fall. I think Sony should wait until September to do a $100 price drop. Side note, the currency problem is more of a concern for financial reporting assuming Sony needs to report all revenues in their home currency. They don't actually have to exchange dollars/euro for yen at current rates. The root of Sony's issues do not involve the gaming division, their problems are with the TVs and financial services. Not saying they can afford for the gaming division to lose money, but they really need to reorg the other divisions. Also, there is no evidence to support that Microsoft sells any of their xbox skus at a profit. Please don't derail the thread on that comment, but you stated it like it was generally accepted and it is not. Microsoft has lost 3.5 billion on the 19.5 billion it has invested in the EDD since 2005.

They do have to exchange their dollar/euro revenue into Yen (or whatever currencies they need to spend money on), unless you find Sony another way to pay their huge monthly expenses.

Let me explain with numbers in case the statement above wasn't very clear. This is a company with annual revenues close to $100 billion, and losses/profits of at least 10 times less than that. This means their expenses are close to $100 billion per year, while their cash reserves are around $10 billion. If they let their revenues sit still and just use the existing cash, they'd run out of money in around a month.

 

Meh. Sony can't afford to drop the price of PS3.

First I commend the OP for his tame flame though we can all see he does not own a PS3 and supports 360 through his game list and sig. On to some points. Fuck PS4. I just got a PS3 I don't give a damn about no PS4. Again one of the reasons that the PS3 is so expensive is because its components are cutting edge. I just looked it up and my PS3 has a more powerful processor then most peoples PC's. The bluray format is future proof we'll be seeing 400 GB BD's this year 1tB blurays by 2012. Theres a lot of talk from 360 fanboys about digital downloads even when the biggest 360 HDD (120 gig) costs about $150. All that next console talk is for Microsoft fans to think about.

Finaly lets all pretend that the prices of electronic components never come down. Look at the NES When it came out it cost the equivilant of like $500. What would you pay today for a computer with 1 kb of ram? Oh and again using the NES- It outsold the mega drive for like 5 years before they had to move on to their next console.

Megadude said: First I commend the OP for his tame flame though we can all see he does not own a PS3 and supports 360 through his game list and sig. On to some points. Fuck PS4. I just got a PS3 I don't give a damn about no PS4. Again one of the reasons that the PS3 is so expensive is because its components are cutting edge. I just looked it up and my PS3 has a more powerful processor then most peoples PC's. The bluray format is future proof we'll be seeing 400 GB BD's this year 1tB blurays by 2012. Theres a lot of talk from 360 fanboys about digital downloads even when the biggest 360 HDD (120 gig) costs about $150. All that next console talk is for Microsoft fans to think about. Finaly lets all pretend that the prices of electronic components never come down. Look at the NES When it came out it cost the equivilant of like $500. What would you pay today for a computer with 1 kb of ram? Oh and again using the NES- It outsold the mega drive for like 5 years before they had to move on to their next console.

Can you please provide some evidence to support these claims. Modern PCs to my knowledge have a lot more memory RAM, faster processors and are far more powerful than the PS3.

Blu-Ray format is future proof?  It would be so ironic if BD was obsolete in  a few years time which would be the start of the next generation

400GB and 1TB Blu-Rays would be expensive and unlikely to sell well in a downwards global market. The costs of 400GB and 1TB Blu-Ray players would be atronomical. Multi-layered Blu-Ray discs? Single Blu-Ray disc stores around 50GB of data on it. 8 or 20 times that storage capacity on one disc would be expensive.

chaospluto said: Unfortunately, the OP is wrong. "A "major" UK retailer has told game site CVG that PSP and PS3 price cuts are "definitely coming soon". Rumors have been circulating about such a price cut for some time. "It's been on the cards for a while," the retailer is quotes as saying, "but manufacturers are not in the habit of giving exact dates so as not to effect sales." The rumored price cut is supposed to bring the PS3 down to US$300 and is expected to be announced next week. " http://kotaku.com/5173213/uk-retailer-ps3-psp-price-cuts-coming-soon

 

For every rumor stating that there will be a price cut, there is also one that says there will not be.  Even Sony has stated that it won't happen in the immediate future.

 

dbot said: kowenicki said: dbot said: It is becoming increasingly likely that the 50/50 cuts will occur. $50 at the start of the fiscal year, and $50 in the Fall. I think Sony should wait until September to do a $100 price drop. Side note, the currency problem is more of a concern for financial reporting assuming Sony needs to report all revenues in their home currency. They don't actually have to exchange dollars/euro for yen at current rates. The root of Sony's issues do not involve the gaming division, their problems are with the TVs and financial services. Not saying they can afford for the gaming division to lose money, but they really need to reorg the other divisions. Also, there is no evidence to support that Microsoft sells any of their xbox skus at a profit. Please don't derail the thread on that comment, but you stated it like it was generally accepted and it is not. Microsoft has lost 3.5 billion on the 19.5 billion it has invested in the EDD since 2005. Is it?  why?.... who says??? There is less evidence of the first bolded statement than there is of the second.....  ironically.   To me, and I say. I disagree.  Microsoft Investor relations stated a couple of months before the price cuts that they were making progress in getting the xbox line to be profitable.  The fact that the xbox wasn't profitable before the price cuts, makes it extremely unlikely that it is profitable now.  I would say that is more evidence in favor of my position.

I think there is one easy way to determine if the console is profitable or not, and that is by its quarterly earnings.  The 360 has been profitable for an entire year if not longer, if I remember correctly.   So I would be willing to make a very large wager on it.
How long can a company go with mounting losses?  Sony has been losing money in pretty much every division so it isn't like M$ who has other divisions to fall back on like when it first brought out the xbox line.  Sony needs to get profitable and stay that way for a while.  With another $100 loss per console, the PS3 has no chance of ever becoming profitable "overall".    Don't forget not only does the division have to be profitable on every console sold, it needs to pay off that racked up debt from its previous loss.

"Don't forget not only does the division have to be profitable on every console sold, it needs to pay off that racked up debt from its previous loss."

But you said the Xbox division was profitable? OH SHI~

http://au.gamespot.com/news/6202681.html
PS3 manufacturing costs have fallen 35% since Summer 2007.

PS3 manufacturing costs are around $449. PS3 retails for $399. Loss of $50 on each PS3 sold as of December 2008

Rassweiler thinks that the next revision of the PS3 hardware, likely due sometime in 2009, could see the console cease to be a loss leader for Sony. That would help it join Nintendo, which makes a modest profit on each $249 Wii it continues to sell at a staggering rate. It is unclear how much money Microsoft currently makes or loses manufacturing the problem-plagued Xbox 360, the hard-drive-less Arcade variety of which now costs just $199.

numonex said: http://au.gamespot.com/news/6202681.html PS3 manufacturing costs have fallen 35% since it launch back in 2006. PS3 manufacturing costs are around $449. PS3 retails for $399. Loss of $50 on each PS3 sold as of December 2008 Rassweiler thinks that the next revision of the PS3 hardware, likely due sometime in 2009, could see the console cease to be a loss leader for Sony. That would help it join Nintendo, which makes a modest profit on each $249 Wii it continues to sell at a staggering rate. It is unclear how much money Microsoft currently makes or loses manufacturing the problem-plagued Xbox 360, the hard-drive-less Arcade variety of which now costs just $199.

I have big doubts about this sort of cost analysis (though I don't necessarily disagree with your conclusion).

They don't seem to account for currency fluctuations. In this day age, currencies are very volatile and they must significantly affect production cost analysis, especially when comparing against the euro (which is usually not used to buy components, but counts heavily towards sales revenue).

 

sum1 tell me exactly how much it costs to make a ps3,xbox 360 n wii

saimcheeda said: sum1 tell me exactly how much it costs to make a ps3,xbox 360 n wii

Only Microsoft, Sony and Nintendo know for sure, and they aren't gonna tell you.

The only thing I've seen is Sony saying that they're not making a profit on hardware yet (they regularly state this in their financial Q&A). Nintendo and Microsoft are even more closed in this regard, possibly because they're not under so much pressure from shareholders regarding profitability.