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[PS3Scene]

Sony Losing Big Money on PS3 Hardware Posted by XanTium | 16-11-2006 14:21 EST

From pcworld.com: Console makers often sell their hardware at a loss with the hope of profiting from the games that run on them. But Sony's loss on each PlayStation 3 will be unusually deep, according to iSuppli estimates released today. The combined materials and manufacturing costs for each device come to about $806 for the model with a 20GB hard drive, excluding the cost of the controller, cables, and packaging, iSuppli said. With a suggested retail price of $499, that would mean Sony is taking a loss of about $307 on each console it sells. The differential for the 60GB model is less, with the cost exceeding the price tag by $241. By comparison, the materials and manufacturing costs for the hard-drive version of Microsoft's rival device, the Xbox 360 are $323, iSuppli estimated. That's less than the suggested retail price of $399. Read More: pcworld.com

[incognegro]

This is nothing new... sony's pockets aren't as deep as the grave they are digging.

[bigjimmy]

QUOTE

This is nothing new... sony's pockets aren't as deep as the grave they are digging.

   

Well said.

Heck, the only console that is actually making a profit on hardware is nintendo with the Wii. M$ and Sony just make profits from software to (hopefully) make back the losses on hardware.

[STICKY_BUD]

ok by my estimate, these figures indicate that the cost of each 60gb is $840

$599 retail + $241 calculated loss(from the article)




further obvious expenses are the cost of the controller, cables and packaging in the $50 per unit range, retail profit margins in the $10 per unit range and worldwide advertising expenses SO FAR at $50 million

$50 x 500k = $25MM
$10 x 500k = $5MM
+ $50MM(ad) = $80MM
$80MM / 500k = $160 per unit

total cost per launch console is $963-$1,000 so i suppose $600 retail price really is a bargain - just like sony claimed back in may





sure those expenses will be spread/disbursed among more than the first 500k units, but the sales of those additional untis will not come before christmas 2006 and more advertising campaigns will definitely be on the way too

[Crimsonnblue]

Yea, once you add in games and other accessories you're looking at 75 to 80 % percent of a badass computer that can run vista and driectx 10 which (even though I love consoles) will quite frankly blow most of the console games out of the water.... I wonder if this ever crossed sony's and the typical fan-boys mind.. LOOK

http://www.neowin.ne...hp/t447230.html

http://windowsvistab...les/447226.aspx

[silentbob343]

QUOTE(Crimsonnblue @ Nov 17 2006, 11:16 AM)

Yea, once you add in games and other accessories you're looking at 75 to 80 % percent of a badass computer that can run vista and driectx 10 which (even though I love consoles) will quite frankly blow most of the console games out of the water.... I wonder if this ever crossed sony's and the typical fan-boys mind.. LOOK

http://www.neowin.ne...hp/t447230.html

http://windowsvistab...les/447226.aspx

How much does vista cost?  How much does a bdrom cost?  Those two together cost more than a PS3.
Are PC games and accessories free?  Yes PCs are better in graphics I am a PC gamer, but to get a PC to run games with the eye candy truned up will cost you.

QUOTE(STICKY_BUD @ Nov 16 2006, 04:20 PM)

total cost per launch console is $963-$1,000 so i suppose $600 retail price really is a bargain - just like sony claimed back in may

yup, that's why I never got the whole; "overpriced" nonsense.  I agree it's expensive, but not overpriced