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VIDEO GAME, MOVIE AND TV NEWS

Sony losing $260 per PS3?

While Sony's recently-announced financial results showed that the company reduced its PlayStation division losses by over 100 billion yen last fiscal year, a factor it attributed largely to falling PS3 production costs, Jack Schofield at the Guardian speculates that the platform holder may be losing double the $130 per console shipped that its internal figures suggest.

"On Sony's own figures, the games division made a loss of $130 for each PlayStation 3 shipped," he said. "Let's assume that it's making pots of money on the PSP and the PlayStation 2: the PS2 is now hugely profitable and still sells more games than anything else. These two platforms could easily have made a profit of $1.2bn in the year. In that case, the total PS3 loss would have been $2.4bn shared between 9.24m PS3 consoles, or $260 per PS3 - including any attached Sony games."

While it is not clear exactly how much Sony is losing on each PS3 shipped, the fact that the console is still not turning a profit has led company management to indicate that the likelihood of a PS3 price cut during 2008 has dropped, according to Lazard Capital Markets analyst Colin Sebastian, who says that Sony is currently more focused on segment profitability than increasing PS3 market share.

Wedbush Morgan analyst Michael Pachter recently told Next-Gen that he expects Sony to introduce a PS3 price cut late this year when hardware production costs have slimmed to nearer the system's wholesale price.

Courtesy of CVG

May 15, 2008