SlorgNet said:
I'm not a Sony employee and have no special access to their data, I'm just relying on industry averages (30% is the ballpark figure for annual cost-reductions in electronics), news reports about BluRay in the reputable branches of the silicon press, and I'm assuming iSupply's original estimate was accurate. The PS3 will continue to lose money for awhile, sure, because manufacturing costs are only part of total costs - there's servicing, transport, advertising, etc. But $2 billion in total losses wouldn't surprise me, and it doesn't mean Sony is doomed. Microsoft lost $1.5 billion launching the 360, which had fewer features than the PS3 and thus cost less to manufacture, so minus $2 billion is pretty much where Sony ought to be. It's not a problem for Sony. Their game division's loss is BluRay/Bravia's gain. They make their money elsewhere; they were pursuing an integrated media strategy from the beginning. |
I think I'll trust the word of Sony's second highest ranking officer who said in their most recent earnings call that Sony might break even with PS3 hardware in 2008. If you want to believe some random cobbled info from iSuppli or wherever over Sony's own statements, I guess that's your choice.
I hate to break it to you but the losses in the game division over 1.5 years is like $3.4 billion and still growing. The losses would be even greater if the PS2 hadn't been pulling in significant profit during that period. If you subtract the PS2 profits, the losses of the PS3 are probably well over $5 billion.
Blu-ray is a loooooong way from making any kind of profit. And the recent events in HD-DVD pricing will guarantee and even longer protracted battle. The only division of Sony that is really making big gains in profit is digital cameras, and that has practically zero to do with the PS3.