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PlayStation 3 still a loss leader, 'six cents for every dollar' of hardware sold
Though Sony's overall bottom line is back in black, what held it back from an even bigger celebration cake was its core electronics brand, and no stranger to that sector is the PlayStation group. Both Joystiq and The Wall Street Journal took a more careful look at the numbers, and there's a few points worth noting. PS2 sales took a year-over-year dip, down from 2.5 million to 2.1 million. PSP took a larger hit, down to 4.2 million from 5.1 million. The PS3, however, is a mix of good and bad news. The good news: 6.5 million in unit sales, up from the 4.5 million prior. That said, it turns out Sony has yet to pull its home console away from "loss leader" status -- WSJ reports the company is still losing "about six cents for every dollar of PS3 hardware sales," i.e. if Sony were to sell the consoles to retailers for $300, it'd technically be taking a hit of $18 each time. That's nowhere near the estimates when the PS3 first launch, and additionally Sony's CFO Nobuyuki Oneda is promising a 15 percent reduction cost by March 2011, which should go a long way. Lets' not forget the company still makes money on Blu-rays and software sales, but in the meantime, hang tight little buddy, you're this close to being profitable all by your lonesome. Update: An error in fiscal sales figures that has been subsequently remedied.
PS3 Slim hardware still losing money
The Times Online had a sit-down with Sony Computer Entertainment boss, Kaz Hirai, after the big Gamescom show last week in Cologne. You remember, the event that saw the official launch of the PS3 Slim. The Q&A is an interesting read in whole, but the answer that stands out comes in response to a question about whether the lower-priced $299 PS3 Slim will be sold at a loss relative to its cost to manufacture. "Yes," was the quick answer from Kaz. That's a surprise for two reasons. First, the PS3 Slim benefits from more efficient 45-nm manufacturing processes used on its smaller, less power-hungry Cell processor. Also, just last month Sony's CFO told investors that manufacturing costs of the PS3 had dropped by "about 70%, roughly speaking" -- that comes to about $240 based on original manufacturing estimates of $800 when the PS3 launched back in 2006. Regardless, a console being sold as a loss-leader is nothing new in the gaming industry and, as Kaz points out, will almost certainly be offset by looking at the PS3 as a platform that includes the hardware, software, peripherals, and services.[Via GamesIndustry.biz]
