All the software sold with the new consoles almost certainly takes care of any lost money on the console itself.

"All the software sold with the new consoles almost certainly takes care of any lost money on the console itself."

Except it didn't. Did you even pay attention to the last three years?

The idea is to make it up on software sales...and DLC to keep Home PSN free.

Do you really think I don't know that's what they're hoping? Did you even read the OP (not counting the second paragraph that I just edited in)?

With the lowered manufacturing costs of the slim, SCE is losing less per unit sold than previously. In terms of manufacturing expenditures, SCE is spending less per unit produced, reducing the overall cost of hardware production. That's important.

Whether they were losing $40 previously and maybe $30 (possibly less or even the same $40) today matters less than if it previously cost $440 to produce a unit compared to $330-340 today (or less) in manufacturing costs. That's still about $100 less that SCE has to spend to produce each unit. That's huge.

Going back to net loss per unit sold, if the lossses per unit have been reduced, it now takes fewer peripherals, controllers and/or games sold to each new user to regain that loss on the initial cost of the console. Without having the breakdowns of the typical new buyer habits (number of games initially purchased, extra controller, etc.) one can't make any assumptions, but it's pretty safe to say that most people buying a new game console aren't buying it just to watch movies on it. SCE is likely making a small net profit off of each new customer currently.

Bu-ray was supposed to help the loss as well. Do you really think Sony wasn't get a cut from those?

Also not sure if the increase in hardware is worldwide or just UK. And even then, that's not as big an increase as the hardware sales. So that doesn't mean they are making up the losses now.

Blu-Ray is pretty irrelevant as to whether SCE can pull initial profits on new buyers of the PS3. I'm not even sure why you brought it up.

The point you may have missed is that if SCE is losing a hypothetical $30 on every PS3 slim sold to an average customer who picks up an extra $50 controller (which costs $10-20 to manufacture at most) and a game or two (at $7 licensing fee per game) just means SCE just made up the losses on that individual console.

Any BDs that new PS3 owners happen to pick up would just be a little extra on the top for Sony in BD licensing fees.

Yep...I was reinforcing what you posted, and amplifying it with the DLC as well.  Sony is treating the PS brand as a package, tying PSP and PS3 thru PSN.  At this moment, PSN is free, and adding more features at a cost that Sony has to de-fray thru some means.  I just didn’t recall you saying anything about DLC before, so harm dude.  I don’t know what kinda cost modeling Sony has been doing, but we will see the results in the spring qtr.  With the launch of a Halo game, M$ EDD will mostly likely post a profit, and Nintendo will of course do the same as usual…so Sony is going to be under a microscope if they can’t for that reporting quarter early next year.

PSN is not free.

Ooohhh... someones quite the rouge....