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back to article PS3 hardware still losing Sony money, claims analyst

Sony still makes a loss on every PlayStation 3 it sells, but the console’s latest, slimline redesign has brought the electronics giant closer to that crucial breakeven point, an analysis by market watcher iSuppli has concluded. The first-generation PS3 was sold at $49.72 (£30.56/€34.17) less than its manufacturing and materials …

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Where they get there prices from?

forty bucks for a 120gb HDD when bought in the kind of volumes Sony will be for punching these units out gotta be overpriced.

sixty-six dollers seems alot for the blu-ray drive aswell, seeing how this will be a Sony product.

Could I "estimate" they pulled their figures out their arse?

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FAIL

Flawed article.

As you point out, it makes a small amount in UK/Europe and loses a small amount in the US. European sales are MUCH higher than the US (were Americans love the American console), so overall, Sony are pretty much about break even.

Also, consoles have always been a loss-leader. The money is made in the games. Sony have the luxury of getting royalties from games and BD movies...

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bunkum

Look at the figure for the launch console. That was the 60GB with BC and card readers. These have been removed, plus the slim was then made to reduce costs further. They must be making profit by now.

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FAIL

lolwut

So based on a few guesses by a company that has no inside knowledge, and that apparently doesn't realize that Sony make the BluRay drives themselves rather than buying them in for $66 a pop (!), Sony are losing money on hardware.

Yet according to Sony's VP of Development, while I worked there, Sony never has and never will lose money on hardware (and neither do they make any significant margins there).

Which one do I believe?

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Rob
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Headmaster

Pedantic of the logistical kind

They may make their own BD drives but that doesn't mean they are made for free, the cost is probably what they have to pay the other division for the units.

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FAIL

Where do they live?

Where do these goons who compile these reports live? If I can buy a 120GB hard drive at retail (2.5") for $38 (Check pricewatch.com) I'm pretty sure Sony buys them for a lot less then that. I wouldn't trust their figures for the cost of a mars bar nevermind how much it costs to build a PS3.

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not quite

If you actually look at the facts and data it’s not as one-sided as you present them. True, Microsoft finally started making money on consoles. Problem is all the money they made so far is not even close to 2 billion charge they had to take on all repair related costs. And before that MS didn’t have one single fiscal year where entertainment division made profit. I’ve read somewhere that MS lost as much as 4.5 billion on original Xbox. Overall all, MS lost on consoles heck of a lot more money than Sony did. The fact that Sony is losing money on PS3 is nothing new and you’ll likely see that again in the future generations of consoles from both MS and Sony. Selling hardware at a loss and recouping it on software sales is business model common to consoles.

As for Sony being “obliterated”, I think you are being way off here again. MS holds slight edge when it comes to number of consoles sold, but you have take into consideration the fact Sony released PS3 year later than MS did Xbox360. If you compare numbers of units sold per year, Sony did better than MS. Add to that general consensus that PS3’s game lineup for next is stronger than that for Xbox360 and I’d say Sony is doing pretty well. Overall, I think it’s very competitive market with well-balanced players.

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Re: lol ouch

Seriously? Sony are being "obliterated" by Microsoft? The XBox 360 has been out a full year longer than the PS3, and only managed to sell 5 million more units (~27 million vs ~32 million), with nearly all of that difference being in the US. Why would they get out of the console business because of a slightly lackluster 7th gen console after being by far the top seller for 5th and 6th gen consoles (PS and PS2)?

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Troll

Rip-Off Britain

Excellent, good to see us Brits are propping up the loss made in the US.

Rip-Off Britain is alive, well and living at Sony.

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FAIL

um...

Yes these figures exclude shipping, marketing etc costs, but according to the numbers you quote, Sony makes a profit on each PS3 sold in the UK...

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Boffin

Quick solution

Sell a $500 Slim with OtherOS support, so all the geeks can buy an unsubsidized Linux-capable PS3!!! :)

I really, really want x86 to be displaced ....

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Cost per Unit?

Is that a cost per unit, or cost with mass purchase deductions? It may well cost $60 to buy a single blu-ray player, but if you buy 1000 wouldn't it be more likely for it to cost $40 per unit? Buy 10,000 and the price may drop to $30?

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(Written by Reg staff)

Re: um...

The figures quoted in brackets - as always - are conversions not the numbers iSuppli is quoting.

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Bod
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I'm no Sony / PS3 fan but...

... even I'm dubious about those figures. Looks far more like iSuppli looked up the prices on a consumer retail web site.

P.S. As for Sony making the Blu Ray drive. Probably not once they got to mass market. Sony tend to outsource to China and/or other companies who can manufacture on mass cheaper than they can (e.g. many of their LCD panels have been made by Samsung).

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Anonymous Coward

I swear El Reg does this on Purpose

it is just hard to fathom, that anyone remotely interested in electronics is not capable of producing a clear sentence when it comes to numbers.

This has to be a concerted effort to annoy people, or perhaps they are not really into gadgets or information technology and are instead a bunch of English Lit students, hmmm - that could also make sense.

Anyway, the PS3, I believe, comes in black, so that is all that really matters.

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As usual...

...the rest of the world subsidises cut-throat US pricing strategies.

Here it's about US$450.

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Anonymous Coward

Suppliers don't provide the true info

The thing to consider is that suppliers do not provide the true figures to companies like iSupply. The lowest pricing given to customers is proprietary information and sharing this would take away all negotiating powers with other customers. What this means is that the true costs to a significant customer like Sony are likely quite a bit lower than the figures that iSupply is given.

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Grenade

@lol ouch

.. you seem to be the only one that hasn't grasped "the figures are bunkum" angle.

I doubt Sony has lost any money on the Slim, and i would doubt if they made a considerable loss on the 60Gb (UK).

Nah, Sony are fine. They might have a few hundred million peeps backs up (DRM, Xboxers, and such like), but they won't be turning out the light for quite sometime.

Suck on this Haters!

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Bod
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The real loss...

... isn't in the hardware costs, but the research and development costs of Blu Ray (and thus the development costs of the PS3). The PS3 would have been out earlier, cheaper and a massive success if it wasn't for Blu Ray. Even just going with a Blu Ray data drive but not bothering with the movie support would have saved them a fortune and time.

They had their eye off the ball when they should have been looking at what the public were really interested in. Not movies, but fun controllers like the Wiimote. Wii might be rubbish, but the public loved the simplicity of it and the simple fun games. Yeah, they're idiots, but the idiots make up the majority.

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Linux

How much does OtherOS cost?

And why did they wipe it, if they say they're gonna have to support it in the firmware upgrades for the fat PS3's anyways?

This is real lameness on Sony's part.

Please bring back linux support for all future PS3s, do you hear, Sony?

Sent from my PS3 which is tunneling X thru' SSH to my little Eee while I'm cozy tucked up in bed...

Yeah yeah, I could be doing better things with my time. Why all the bother? Just to make a bloody point.

Some PS3 buyers are NERDS. And by GOD, Sony, you better appease us.

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FAIL

Despite you rejecting my first comment

$326.47 + $9.81 still doesn't add up to $336.27

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