PS3 “Almost Breaking Even”

ps3-slim-2_0

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.

ps3-slim-cost-breakdown

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.

They explain:

“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


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    Avatar of Muzaffar
    Comment by Muzaffar
    01:33 13/12/2009 # ! Neutral (0)

    .....and nothing of value was lost.

    Avatar of El Chaos
    Comment by El Chaos
    01:32 13/12/2009 # ! Neutral (0)

    Good news, for Sony at least: the PS3 Slim sells in Japan for ¥29,980, that's approximately 339 dollars (they're doing a very small profit out of each Japanese console), and for £244.69 in the UK, approximately 398 dollars.

    Looking pretty good, if you ask me.

    Comment by Anonymous
    21:52 12/12/2009 # ! Neutral (0)

    "PS3 Slim’s hardware components have now dropped to $336, though the units sell for $299."

    And of those $299, $150 goes to the middle man and the retail chains selling the consoles?

    Comment by Anonymous
    20:51 12/12/2009 # ! Neutral (0)

    The Nintendo Wii - where people go for shovelware

    Avatar of CC
    Comment by CC
    21:38 12/12/2009 # ! Neutral (0)

    How badly uninformed some are is quite surprising seeing the love for their console.

    Industry analysts report the cost of the PS3 Slim’s hardware components have now dropped to $336, though the units sell for $299

    So no, no profit is being made, it's still being sold at a loss although a smaller loss than ever before. Also note the title ALMOST breaking even..

    Yes the PS3 had some pretty innovative plans, it wasn't even supposed to have a videocard.. but they put it out in a rush (probably due to the xbox360 already being out for a while). The plan wasn't to even include a videocard and let the Cell processor do all the work, but due to doing it in a rush they just threw a videocard (oh hello additional hardware costs) to get it done in time.

    Personally I don't give at rats ass about either console as they're holding back the PC market which can have graphically superior games.. but 99% are badly programmed console ports that don't even run properly on superior hardware and have strange console based controls (combination of keys instead of simply assigning another key - keyboards have a few more keys on them than a gamepad)

    Avatar of maddeath
    Comment by maddeath
    22:11 12/12/2009 # ! Neutral (0)

    CC is that really you???(the CC i remember was kinder...)
    all and all it has come a long way from day one and im(g)o(i'll just go and save anon the time) thats what really matters.
    but you're right PC is the best and it's a damn shame she has to wait months for crapy ports of crapy games.

    Avatar of R3TAK
    Comment by R3TAK
    00:38 14/12/2009 # ! Neutral (0)

    Well thats some good news for sony, I mean it's about time but like you lot are saying the new ps3 model is seriously stripped out to reach that price. My ps3 is the 60gb version that also plays ps2 and ps1 games i mean they must have made a huge loss on them.

    Comment by Anonymous
    17:31 13/12/2009 # ! Neutral (0)

    not that its of any real importance, but if you look at the last three lines in the pic, the total is wrong. its off by a penny. just my minor fail sighting for the day.

    Comment by Anonymous
    13:26 13/12/2009 # ! Neutral (0)

    Soon, the PS3 will be forever known as a success

    Comment by Anonymous
    10:31 14/12/2009 # ! Neutral (0)

    Just to educate everybody...the "point" of the PS3 for Sony was not exactly to produce a fantastic gaming console (to say nothing of the competition, which is also great).

    Instead, the purpose was to ensure the victory of Blu-ray. The licenses for CD and DVD have been worth multi-multi-multi-billions over the years. You would have to be really dumb to let go of that revenue stream.

    Avatar of El Chaos
    Comment by El Chaos
    08:11 15/12/2009 # ! Neutral (0)

    Lol yeah, of course, that's Sony's trademark "forward thinking" alright.

    They saw the CD was getting replaced by the MP3 format/players, so they go and manufacture the very first (and only, to my knowledge) portable player that doesn't play .mp3 files. Then they saw high definition contents and thought "physical media!" in a world essentially bursting with digital contents and distribution, something that Microsoft leads and they laughably "follow" with the half-assed, proprietary, publisher-repellent corporative embarrassment they call PSPgo.

    But hey, good luck with that! "It only does everything"... lol.

    Avatar of kajunbowser
    Comment by kajunbowser
    13:17 14/12/2009 # ! Neutral (0)

    It's about time.

    Avatar of man1
    Comment by man1
    22:40 20/12/2009 # ! Neutral (0)

    Hmm... Kinda hoping they remain stuck making losses so sales price would be forced to go down, but then I might be wrong. Heck, I'm no business bloke.

    I might be contradicting myself here - The latest model is a lot different from the very first one mainly due to removal of many features and different (cheaper) hardware components. It might even be safe to say that hence, it got inferior as a side effect of countering production-to-sales losses.

    So, for a cheap product, I'll be getting an equally cheap quality item? Wonder if Xbox360's somewhat legendary reliability is a tell-tale sign for things to come....

    09:20 15/12/2009 # ! Neutral (0)

    So manufacturing and testing is only $9.81.

    If the PS3 was made in the US or Japan instead it would not be $200 but instead a mere $40 at most.
    In a first would country there would be less man hours of labor due to use of robotics.
    Or manufacture it in Mexico as it would be just $28 more even without robots.
    BTW Mexico does make quality products the IBM PS/2s were made in Mexico and those things were tanks.
    I'd gladly pay an extra $30 without a complaint to have it not be made in China.
    BTW if they did the plastics casting and PCB layout via automation in the US and had them assembled in Mexico they'd actually be even cheaper over all.
    Partly because all the parts would be riding trains which use less fuel then any other method of transport.
    Bad part they won't be falling apart for 20 years like Atari 2600s.

    Comment by Firetribe
    07:46 13/12/2009 # ! Neutral (0)

    We can only hope sony breaks even and makes tons of money to bribe them to develop Dream Club and Ima@s for the PS3.^^

    Comment by announ
    06:16 13/12/2009 # ! Neutral (0)

    Of course, they removed a lot of features along the way to reach that price too.
    Current PS3 models are crap compared to the original one, which even had a EE+GS processor (basically a full PS2 system inside). You can't even install a Linux distro on the current models.

    Comment by Anonymous
    10:06 15/12/2009 # ! Neutral (0)

    Well the hackers will probably fix the no linux problem.

    Avatar of Callysto
    Comment by Callysto
    07:47 13/12/2009 # ! Neutral (0)

    I'm not a techie. I have zero interest in all the "potential" applications and I'd be lying if i said I even knew what they were.

    I barely use 25 percent of my PS3. I play games and watch blu ray movies. And I'm one of the cheap bastards who heldout for years waiting for this price drop that hit in september. Then again I did the same thing with Xbox.

    I feel petty good, and I'm glad sony is doing pretty good.
    Now if only North America gets Vesperia on PS3 I'll be gold.

    Comment by Anonymous
    18:43 12/12/2009 # ! Neutral (0)

    YOU RRoD 360 BETA TESTERS FAGS SURE GOT TOLD.

    Avatar of chad001
    Comment by chad001
    13:51 12/12/2009 # ! Neutral (0)

    Blue-Ray Drive... the most innovative thing since the Blu-Ray Drive...

    Avatar of Mario1-7
    Comment by Mario1-7
    13:36 12/12/2009 # ! Neutral (0)

    Nintendo has been Making money of the Wii for years. Sony needs to get with the Times.. Nintendo and Microsoft is beating that ass.

    Avatar of Sylar
    Comment by Sylar
    18:00 12/12/2009 # ! Neutral (0)

    Sony is doing just fine. Nintendo might be making money with each console but because there gamers are casuals and there game library small they don't sell that much games. Sony gets a lot more money from game sales.
    Also if we take in to account the people who bought X-Box because they can play pirate games(not to mention those who bought second and third after it broke) then you will realize that Microsoft actual sales are a lot less(No profit from a guy who bought a console but never bought any original games).
    Also Sony risked selling on loss to win the HD disc war. And now that she made it, Sony will get even more profits.

    Comment by Anonymous
    20:17 12/12/2009 # ! Neutral (0)

    yes, nintendo don't sell many games.
    [http://en.wikipedia.org/wiki/List_of_best-selling_video_games#Top_20_console_games_of_all_time]

    Comment by Anonymous
    00:01 13/12/2009 # ! Neutral (0)

    not only that. look at the new exclusives for the ps3. the only thing i hear that xbox has is natal. sony may be losing cash but i bet theyre smiling at the future to come. also sony has been in the gaming biz longer that microsoft. and within that time they destroyed thier competitors. theyll find a way to overcome. ps3 aint quittin yet. oh yea. nintendo kicks ass.

    Avatar of Sylar
    Comment by Sylar
    00:24 13/12/2009 # ! Neutral (0)

    When you have only ten games worth buying off course they are gonna make big sales especially when so many have the console, but i wonder how much sales to they get from all the other games?
    I know what am talking about. I bought the Wii because i thought the idea looked cool like every other idiot around and i bought a few of those games but after 2 months i couldn't find any other decent game and i got tired of jumping around and i preferred sitting with my conventional controller. So the Wii ended eating dust in the closet until i got ridden of it. And you will be surprised how many can share a similar story.

    Comment by Anonymous
    04:32 13/12/2009 # ! Neutral (0)

    Yah but those are from third parties, so in the end its all more money for nintendo, you can criticize them all you want, but in the end nintendo is making a wonderful profit from both, consoles and games.

    Avatar of Sylar
    Comment by Sylar
    05:13 13/12/2009 # ! Neutral (0)

    Hey am glad they can make profit. I don't want them to disappear. I love Nintendo. I still have my Nes with the big Mario Bros tape.
    It's also good for the competition. But the Wii for me is a product that deceives it's buyers.
    The whole controller thing seems nice but you get bored of it very easily except if you are a 10 year old that loves jumping up and down all day and there are no good games to buy except from very few exceptions.

    Comment by Anonymous
    21:55 13/12/2009 # ! Neutral (0)

    What you posted is complete nonsense.

    I suggest you take a look at some of these companies' financial reports. It shows Sony's game division losing over 4 billion dollars in the past 3 years, while Nintendo has made over 12 billion (can't remember exactly).

    The PS3 is selling the least amount of software out of the three consoles. That's a fact, no anecdotal evidence will change it.

    Comment by Anonymous
    13:55 12/12/2009 # ! Neutral (0)

    “In light of these factors, the PlayStation 3 probably is already at or near the tipping point for profitability,”

    The end of days is aproaching.

    Comment by Anonymous
    14:50 12/12/2009 # ! Neutral (0)

    well, somebody has to push the technology, the wii, and sexbox used old technology, and will have to come out with a new console "just" to catch up to the ps3. so i prase sony for taking chances and pushing boundrys.. also doesn't hurt that the ps3 won them the format war with blueray... Marketing Genius!

    Comment by Anonymous
    00:03 13/12/2009 # ! Neutral (0)

    "well, somebody has to push the technology" i agree. sounds like formula 1 lol.

    Comment by Anonymous
    15:06 12/12/2009 # ! Neutral (0)

    the wii used old technology including the wiimote. The diffence is wii packaged it as somethin new. It is "new" simply because no one ever put it in a console before. but the sexbox really didn't use old technology it kinda went in between old and new technology. the processor in the sexbox is the unfinished cell with higher a higher clock and gpu was ati

    Comment by Anonymous
    15:11 12/12/2009 # ! Neutral (0)

    and gpu was ati's unreleased chipset optimized for microsoft's wants. The old in it is the dvd rom drive which is still some capable of putting up with blu ray. Just because blu-ray is the future doesn't mean dvd is dead yet. They are still working on new compression methods to fit more onto 360 disks.

    Comment by Anonymous
    15:07 12/12/2009 # ! Neutral (0)

    If Microsoft (not sure about Nintendo, given the Wii) came out with a new console, Sony would very likely have to do the same just to keep up with the times. You really shouldn't buy into the hype and spin.

    Furthermore, no game console will ever be "pushing boundaries" or "pushing the technology" so long as PCs exist. Regardless of what you think the best console is as far as technology goes, the best PCs are still years ahead.

    Comment by Anonymous
    15:33 12/12/2009 # ! Neutral (0)

    you should be sure that if nintendo came out with a new console ps3 would still beat its behind. because nintendo isn't about being on the edge of technology which is required to actually compete straight up against sony or microsoft.

    Comment by Anonymous
    19:42 12/12/2009 # ! Neutral (0)

    the whole point of that little rant was to point out nintendo doesn't put out consoles that can compete directly with other console performance because it is to much of a financial risk.

    Comment by Anonymous
    19:09 12/12/2009 # ! Neutral (0)

    and the games aren't good either but again when you look at the target audience that doesn't matter either

    Comment by Anonymous
    19:04 12/12/2009 # ! Neutral (0)

    what anon 15:33 meant is that Nintendo couldn't put out a console that sold at a loss like sony. Nintendo doesn't have tons of disposable income. So they positioned themselves with a low powered console that would draw people in with the new way of interacting with games. The fact that it is so popular isn't because its that great but more along the line that the wii became a status symbol to own, partially. there are more reasons why games have sold so well but it has little to do with how good the system really is.

    Comment by Anonymous
    21:45 13/12/2009 # ! Neutral (0)

    Erm, Nintendo actually has more disposable income than Sony. The reason Nintendo doesn't bother with eating losses on hardware isn't because it's a financial risk - it's because it's a poor business move.

    The Wii will end up making more money than the PS1 and PS2 combined.

    Avatar of Canadane
    Comment by Canadane
    17:43 12/12/2009 # ! Neutral (0)

    Anon is right. Wii sales > PS3 and 360

    Comment by Anonymous
    17:18 12/12/2009 # ! Neutral (0)

    What are you on about? Nintendo can't "compete straight up against sony or microsoft?" The Wii sales blow sony and microsoft away! It is sony and microsoft that cannot compete with nintendo.

    Comment by Anonymous
    14:19 12/12/2009 # ! Neutral (0)

    Wow! The PS3 can sell for a profit? It really can do everything!

    Comment by Anonymous
    13:18 12/12/2009 # ! Neutral (0)

    So that means they're losing even more money on the 250 Gb version that sells for only $50(CDN) more, LOL.

    Comment by Anonymous
    13:40 12/12/2009 # ! Neutral (0)

    Actually, they get closer to even with the 250gb model - the extra expense of 250gb is less than the $50 increase in price.

    Comment by Anonymous
    13:36 12/12/2009 # ! Neutral (0)

    Actually, that cost less then $50. So i assume that they at least break even with that version.

    Avatar of dual.soul
    Comment by dual.soul
    13:35 12/12/2009 # ! Neutral (0)

    They will actually be losing less. The 250gb hard drive alone, not the difference between the 120gb and 250gb, will not cost Sony $50.

    Avatar of No Comment
    Comment by No Comment
    12:29 12/12/2009 # ! Neutral (0)

    Well I guess it was about time huh?

    I wonder exactly how much they've lost since it launched though, or if it had any real affect?

    Avatar of FoolyDooly
    Comment by FoolyDooly
    12:26 12/12/2009 # ! Neutral (0)

    Microsoft don't need to breakeven. They got Bill Gates. (Just because he retired, doesn't mean he still owns part, or lot, of it)

    That being said, I do wonder to myself, how much money did they made from purely console sale on older gen consoles?

    Avatar of aarond12a
    Comment by aarond12a
    12:29 12/12/2009 # ! Neutral (0)

    You realize that Bill Gates already retired from Microsoft. Steve Ballmer is the monkey, er, man in charge now.

    Sony has been bleeding cash for a long time from the PS3. I'm glad to see it is at least closer to becoming a cash cow rather than a cash dustbin.

    That being said, how many people use the PS3 as just a Blu-ray player? I'm sure there are some out there. I guess my collection of PS3 games makes up for them. :)

    Comment by Anonymous
    02:14 13/12/2009 # ! Neutral (0)

    Are you crazy?! using the PS3 just for blu ray?! I also use it to watch divx videos and such.

    Comment by Anonymous
    11:10 13/12/2009 # ! Neutral (0)

    Some people get it for just bluray because of the fact it always gets firmware updates quickly. If they buy a offbrand standalone player they may never get the updates.

    Avatar of cats
    Comment by cats
    01:01 13/12/2009 # ! Neutral (0)

    Well, some people get it because of the blu-ray when choosing between it and an xbox360, but the majority pick the xbox360 ONLY because it's so fucking easy to pirate games on.

    Really have to face the truth no matter which camp you're in.

    As far as wii's, no idea. Not 2-9yo nor am I 60-90, the apparent age range they can get people to actually want one.

    Comment by Anonymous
    12:45 12/12/2009 # ! Neutral (0)

    I think there is a good number who buys PS3 to play blu-ray. Some people I know just got a PS3 because it can do everything

    Comment by Anonymous
    12:38 12/12/2009 # ! Neutral (0)

    you have a third of the xboxs library congratulations

    Comment by Anonymous
    21:50 12/12/2009 # ! Neutral (0)

    rtfm

    Comment by Anonymous
    21:16 12/12/2009 # ! Neutral (0)

    check ur network settings

    Avatar of Ken
    Comment by Ken
    18:33 12/12/2009 # ! Neutral (0)

    how do u connect ps3 to internet and play online?

    Avatar of Darkrockslizer
    Comment by Darkrockslizer
    15:10 12/12/2009 # ! Neutral (0)

    I wonder how XboX is doing then, they actually PAY royalties to people developing games on it instead of receiving them...

    Comment by Anonymous
    15:03 12/12/2009 # ! Neutral (0)

    Given the consistently poor attach rate, I would assume a lot of people are using it solely as a BD player, because the game sales have been pretty... average. But don't worry, that's just because PS3 owners have more diverse tastes.

    Avatar of homogenized
    Comment by homogenized
    12:36 12/12/2009 # ! Neutral (0)

    From what I've heard, Nintendo has always sold it's hardware for a profit from day one, due to them using substantially less than cutting edge technology at launch.

    Avatar of null
    Comment by null
    14:15 12/12/2009 # ! Neutral (0)

    Outselling Sony and Microsoft substantially from day one, and now I find out that they're the only one who was selling at a profit, too?

    Whether you love Nintendo or hate them, their business practices are pretty awe-inspiring.

    Comment by Anonymous
    23:44 12/12/2009 # ! Neutral (0)

    lol. whether or not you're xbox or ps3 fan-boy. you probably have a wii hidden under your bed.

    Comment by Anonymous
    20:00 12/12/2009 # ! Neutral (0)

    even the games made for the wii by nintendo suck

    wii play,wii sports-a collection of games that have been done before just repackaged with miis

    wii fit- not a game but a program that tells you your fat tub of lard while your exercising

    its really sad nintendo found a new way to be unimaginative and stale yet get rich doing it

    Comment by Anonymous
    04:54 13/12/2009 # ! Neutral (0)

    @null Do you just make up your own reality and live in it, or something?

    Comment by Anonymous
    12:48 13/12/2009 # ! Neutral (0)

    NES underpowered? It was based on the 6502, the same chip as its 1980s contemporaries like the Atari 2600 and Apple II.

    Avatar of homogenized
    Comment by homogenized
    11:34 13/12/2009 # ! Neutral (0)

    By the way, I didn't just mean the Wii when I said that, I meant every console and handheld they ever created. The NES/Famicom was vastly underpowered compared to the current computers of the time. But Nintendo was aiming for it to be just good enough to create solid games for while being just cheap enough for most people to afford, and they succeeded.

    Comment by Anonymous
    11:25 13/12/2009 # ! Neutral (0)

    I notice you didn't include a link in your post 04:54.

    Avatar of FoolyDooly
    Comment by FoolyDooly
    14:31 12/12/2009 # ! Neutral (0)

    like getting sued for copyright infringement? [http://en.wikipedia.org/wiki/Universal_City_Studios,_Inc._v._Nintendo_Co.,_Ltd.]

    Avatar of null
    Comment by null
    17:38 12/12/2009 # ! Neutral (0)

    15:26 - Do you just make up your own reality and live in it, or something?

    http://en.wikipedia.org/wiki/List_of_best-selling_video_games#Wii

    Comment by Anonymous
    17:58 12/12/2009 # ! Neutral (0)

    wii is a nintendo console and for use with nintendo games only. all other games on wii sucked.

    Comment by Anonymous
    15:16 12/12/2009 # ! Neutral (0)

    Nintendo makes everyone see green.
    Their ceo's with cash, microsoft and sony with profits, and gamers who got suckered into buying a wii and want better quality games.

    Comment by Anonymous
    15:26 12/12/2009 # ! Neutral (0)

    not true sony and microsoft have made way more money on the game sells alone. only a very small handful of games are purchased for wii





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