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Sony now loses approx. $18 for every PS3 sold

15 Comments | posted

Although the PlayStation 3 Slim has prompted a resurgence in Sony’s home console business, prompting 10.8 million PS3 sales in just nine months, the console is still losing money for the company. At least, the console’s hardware is losing money, since software sales turn this into a profit. However, this hardware loss is nowhere near as significant a loss as it used to be.

Following the console’s price-cut to $299 in the US and the release of the revised hardware with the PS3 Slim, Sony has been able to reduce it’s loss to approximately $18 on each console (perhaps lower due to sold to retailer cost) sold in the US. Although it’s harder to work out in the UK with 17.5 per cent VAT to think about, with the higher price and the current dollar-to-pound exchange rate, it wouldn’t be out of the question to suggest that the console is turning a profit in Britain.

This piece of information is found within an interview with Sony’s Chief Financial Officer Nobuyuki Oneda, who explained that the company expects to continue reducing the production costs of the PS3 by 15 per cent by March 31st 2011, which is expected to result in “tens of billions of yen.” It was then revealed that Sony loses approximately six cents for every dollar of PS3 hardware sales, or $18 for every $299 console sold in the States.

This means that with the console’s approximate attach rate of seven games per console, the company is now earning a healthy profit on the PS3′s combined hardware and software sales.

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Comments (15)

  • Loki

    I swear before the end of this year, PS3 hardware cost will break even.

  • Prof. Paddy

    You are correct. They are aiming for a further reduction of $50 by March 2011…so that’s a profit of $32.

  • Raptor

    I believe that by the end of the PS3′s product lifecycle, it wil have at least broken even or made an overall profit for Sony. But then the PS4 will end up costing them too, hopefully not!

  • M.n.M

    at least sony is correcting their mistakes

  • LastBoss

    PS3 is the best value in gaming, Thank you Sony for not ripping off your fans!

  • Adis

    i dont get how they are losing $18 dollars for ever ps3 sold yet thats a good thing….someone explain….

  • Loki

    @ Adis

    Because they were losing so much before, and somehow they’ve reduced it every year. Now that it’s only $18 dollars, they are very close to breaking even and hopefully earning profit on the hardware. Right now software sales and online transactions are the only one supporting their gaming division.

  • Prof. Paddy

    The PS3 cost over $800 to produce for Sony when the PS3 was launched. That was over $200 lost per every single console sold. Even with price cuts all the way down to $300 (half launch price) Sony is only losing $18. That is an incredibly reduction in manufacturing cost (From $800+ to $318) – Wow.

  • TK

    Sony hasn’t lost money on any PS3 since August 2008. By that time, I think they had a 80GB and a 160GB model for $400 and $500. The PS3 manufacturing cost at that time was $400, so they won $100 on each 160GB model sold.

    In Sep 2009, the PS3′s manufacturing cost dropped to $240 dollars. So they get $60 on each system sold.

  • Prof. Paddy

    Source TK? I think I’m going to believe Sony themselves…

  • SpoonPower

    Prof. Paddy: “The PS3 cost over $800 to produce for Sony when the PS3 was launched. That was over $200 lost per every single console sold. Even with price cuts all the way down to $300 (half launch price) Sony is only losing $18. That is an incredibly reduction in manufacturing cost (From $800+ to $318) – Wow.”

    Yeah that is truely amazing, how long until they’ll start gaining on each console instead of making it up with software sales?

  • Dr. Moogle

    well i dont really know how much HDDs cost…but how about they make another PS3 but with barely any HDD space? itll be a PS3 for the more knowledgable folks who will be sure to buy another external HDD

    i mean, by 80gig is running out of space so i may dish out 30-50 for a bigger HDD (as the 1TB sounds great for 100….i wont use THAT much…ill probably use 150-200gigs for my PS3′s lifespan)

  • StarSpeed

    Sony is losing money in the hardware department with each PS3 sold, but they have a lot of great games releasing this year, so hopefully their software sales increases.

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