Analysts are reporting the PS3, each unit of which has famously sold at a substantial loss since its release, may be approaching the point at which Sony is actually making money on hardware sales.
Industry analysts report the cost of the PS3 Slim’s hardware components have now dropped to $336, though the units sell for $299.
At launch the console was estimated to cost Sony $805, selling for a maximum of $599, and by 2008 the $399 console was thought to be losing $50 per unit.
“Since the introduction of the PlayStation 3 in late 2006, Sony has subsidized the price of every console sold, a deficit the company has made up for with game sales and royalties.
However, with each new revision of the game console hardware, Sony has aggressively designed out costs to reach the hardware and manufacturing breakeven point as quickly as possible.
The latest version of the PlayStation 3 manages to further reduce the loss, even with the U.S. price of the console having fallen by $100 during the past year.”
They even hold out the possibility of Sony actually making money on the console with continuing reductions in component cost:
“In light of these factors, the PlayStation 3 probably is already at or near the tipping point for profitability,”
Marketing and distribution costs, as well as the razor thin profit margins enjoyed on base units, are not included in these calculations, although selling hardware at a loss to recoup profits on media sales is far from poor business sense.
In comparison, the rather more basic hardware of the Wii has supposedly been selling at a profit throughout its history, whilst the Xbox 360 has apparently been sold at close to break-even, apparently at the expense of reliability…