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Forums - Sony - How much is Sony losing per PS3?

kitler53 on 24 November 2009
Netyaroze said:
kitler53 said:
leo-j said:
pastro243 said:
rafichamp said:
Sony has stated the more they sell the more they make in profit due to manufacturing costs being reduced tremendously


This may be true, in mass production the more you produce you can reduce the costs, I dont remember the explanaition though.

neither do I but its something I leanred in economics

when you make a cake you need two types of things: the ingredients -  like flour and sugar, and the equipment - like a mixer.

the total cost to produce a cake is the cost of the ingredients AND the total cost of the equipment divided by the number of cakes produced.

if you make 1 cake then to be profitable that one cake must account for the total cost of the mixer.

if you make 1 million cakes then each cake must account for one millionth the cost of the mixer thus each cake is cheaper to make.

 

You explained the fix costs pretty well.

just to be a smart ass you forgot somethings aswell:

 

You forgot to mention that Sony first had to develop a new cake and that time is money aswell.

To invent a new cake you have to invest some time and after you invented him you have to spend time doing the cake and you have to use some energy too. And you have to take in account even your house and kitchen costs. For privat persons it is a ridicolous low amount but fo a company its a giant amount because the facilitys dont serve other purposes.

 

lol, yes my analogy is oversimplified but if i remember correctly leo-j is in high school right now.  i was just trying to clarify the overall concept of fix vs. variable costs in a way that would be easy to ...wait for it... digest. xD



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GreyianStorm on 24 November 2009
kitler53 said:
Netyaroze said:
kitler53 said:
leo-j said:
pastro243 said:
rafichamp said:
Sony has stated the more they sell the more they make in profit due to manufacturing costs being reduced tremendously


This may be true, in mass production the more you produce you can reduce the costs, I dont remember the explanaition though.

neither do I but its something I leanred in economics

when you make a cake you need two types of things: the ingredients -  like flour and sugar, and the equipment - like a mixer.

the total cost to produce a cake is the cost of the ingredients AND the total cost of the equipment divided by the number of cakes produced.

if you make 1 cake then to be profitable that one cake must account for the total cost of the mixer.

if you make 1 million cakes then each cake must account for one millionth the cost of the mixer thus each cake is cheaper to make.

 

You explained the fix costs pretty well.

just to be a smart ass you forgot somethings aswell:

 

You forgot to mention that Sony first had to develop a new cake and that time is money aswell.

To invent a new cake you have to invest some time and after you invented him you have to spend time doing the cake and you have to use some energy too. And you have to take in account even your house and kitchen costs. For privat persons it is a ridicolous low amount but fo a company its a giant amount because the facilitys dont serve other purposes.

 

lol, yes my analogy is oversimplified but if i remember correctly leo-j is in high school right now.  i was just trying to clarify the overall concept of fix vs. variable costs in a way that would be easy to ...wait for it... digest. xD

Oh damn, you are quite punny :D



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gamelover2000 on 24 November 2009
kitler53 said:
leo-j said:
pastro243 said:
rafichamp said:
Sony has stated the more they sell the more they make in profit due to manufacturing costs being reduced tremendously


This may be true, in mass production the more you produce you can reduce the costs, I dont remember the explanaition though.

neither do I but its something I leanred in economics

when you make a cake you need two types of things: the ingredients -  like flour and sugar, and the equipment - like a mixer.

the total cost to produce a cake is the cost of the ingredients AND the total cost of the equipment divided by the number of cakes produced.

if you make 1 cake then to be profitable that one cake must account for the total cost of the mixer.

if you make 1 million cakes then each cake must account for one millionth the cost of the mixer thus each cake is cheaper to make.


hmm cake :)



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Netyaroze on 24 November 2009

@kitler

I knew that you oversimplyfied it by purpose. I just wanted to add something to complete the picture but without an intention.



welshbloke on 24 November 2009

Whereas it is partially true to state that if you make more it is cheaper it does not mean that they are not making a loss.

The total cost of production will with a strong orderbook and a mature supply chain reduce. This of course is applicable to all 3 consoles. The painfull truth is currently they do not make a profit regardless of any production gains and at some point the reduction becomes harder and more difficult to achieve.

Currently it is likely that both Nintendo and Microsoft make a small profit on hardware sales in addition to a much larger profit from sales. Sony is not likely to be making a profit on hardware and is also likely to be making less on software sales but that is changing as they put more units out.

I still think they are gambling heavily on software sales to compensate for this shortfull along with changes to the economic climate such as currency.



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Winner of the 2010 VGC Holiday sales prediction thread with an Average 1.6% accuracy rating. I am indeed awesome.

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dsgrue3 on 24 November 2009
kowenicki said:
dsgrue3 said:
kowenicki said:
@dsgrue3

what heruamon says could happen and sony could still be right... perhaps they project to make money towards the end of the year... you need to calm down...

I'm calm. Just tired of this Sony is doomed banter. Barring another financial collapse, there is no chance that Sony loses that much in the remainder of the year. However, anything could happen. Maybe MS collapses? See what I did there?


1.  he didnt say sony would collapse

2.  ms have never even made a loss

 

see the difference?

You really should read posts more carefully.

1. Never said he said that.

2. Did I say they have or will?



Battlefield on 24 November 2009
welshbloke said:
Whereas it is partially true to state that if you make more it is cheaper it does not mean that they are not making a loss.

The total cost of production will with a strong orderbook and a mature supply chain reduce. This of course is applicable to all 3 consoles. The painfull truth is currently they do not make a profit regardless of any production gains and at some point the reduction becomes harder and more difficult to achieve.

Currently it is likely that both Nintendo and Microsoft make a small profit on hardware sales in addition to a much larger profit from sales. Sony is not likely to be making a profit on hardware and is also likely to be making less on software sales but that is changing as they put more units out.

I still think they are gambling heavily on software sales to compensate for this shortfull along with changes to the economic climate such as currency.

that's up to us gamers. C'MON PS3 SUPPORTERS LETS BUY THESE AMAZING GAMES!!!!!!!!! they ROCKZ!!!!! c'mon time to bring sony out da red and into da black, but i'm seriously dudez buy the gamez people ........(looks at unchartd, lbp,killzone2,resistance,RnC sales) seriously, -_-



0cton on 24 November 2009

they lose about 180 $ per sold console.



Xxain on 24 November 2009

Why is this such a popular topic?



Dgc1808 on 24 November 2009

Your guess is as good as any. I'll gonna put my guesstimate at: 28USD on average per unit.



4 ≈ One