Kazuo Hirai, president and group chief executive of Sony Computer Entertainment, told The Times at the inaugural Gamescom convention in Cologne: “We felt it was the right time to pass on the benefits of the fact that we’ve been able to reduce the number of components and their sizes. We wanted to pass the cost savings on to our consumers in the new price point.”

Hirai admitted that Sony already loses money on each console it sells. “If you’re just talking about the hardware alone, the quick answer is yes, we do lose money on every one. That makes good headlines, but I don’t actually know that that’s the true nature of the business that we’re all in, whether it’s PlayStation, Xbox or the Wii.

“I think the better indicator is to look at the business as a whole platform, to say are you profitable in terms of the hardware, software and peripherals. And the answer to that question is yes.”

Both Nintendo and Sony face particular problems in cutting hardware prices, as the Japanese yen has appreciated by over twenty percent against the pound in the past two years, which has had a huge impact on their profits and leading Nintendo to unfavourably raise the UK distribution price of Wii without increasing the RRP, cutting many independent retailers out-of-the-picture. Electronic Theatre will keep you updated with the latest developments from all three console manufacturers.

 http://electronictheatre.co.uk/index.php/playstation3/playstation3-news/2765-sony-confirms-playstation-3-official-uk-rrp

 Sorry about the typo in the title

So the amount they loose on the hardware must not be very much if they are making a profit on the entire PlayStation Brand. Well at least that Sony shareholder on here cant bitch anymore since Sony is now making a profit from its games division.

Really?

Losses on PS3 hardware verses...

- Profit on PS3 games

- Profit on PS3 peripherals

- Profit on PSP hardware

- Profit on PSP games

- Profit on PSP peripherals

- Profit on PS2 hardware

- Profit on PS2 games

- Profit on PS2 periperals

hmm...

@puffy what's your point?

He doesnt say how much they are losing per PlayStation 3.

For all we know it could be anything from $1 to $100.

This is good news, and maybe Sony can now start giving out money for exclusive stuff and big advertisements.

@Puffy

The Playstation 3 (THREE) brand alone is profitable according to the article. Don't mix in other systems.

fixed. Ps2 doesnt sell nearly as much games since there is a huge used market for it. Also with periphrials. How come psp sw is all of a sudden profitable? i thought general thought on this matter was piracy kills profits. And you really don't know what Psp sells for. I can see small profits for PSP. Also, with ps2 price cut I don't see them making more than 10 dollars per unit sold.

No he doesn't, but he says they are passing on the savings to the customer.

We know that Sony is already making profit on their PSP-3000 models. We also know that the PSPgo will be cheaper to make then the PSP 3000 but will sell for more. While piracy does kill the numbers on PSP games a lot of the more high-profile ones do sell quite a bit and do make Sony some money. Not sure if its enough to call them profitable in that area though.

So then Sony is probably making the PS3 for at least $100 cheaper then.