As Production Costs Decrease, PS3’s Outlook Improves
Nowadays, it’s rare when a videogame console manages to sell at a profit rather than a loss. Many of you may remember the days of when game consoles were priced as high as $500 simply because that’s how much they cost to build. It made absolutely no sense from a business standpoint to do otherwise. [shal]Sony[/shal], however, forever changed the playing field with their first game console, the [shal]PlayStation[/shal].
Though manufacturing costs were reportedly much higher, they ate the upfront losses (much to the horror of their competition) and attempted to make their money back through software licensing. It worked, and it worked very well. Sorry, [shal]Sega[/shal].
As with the PS1 and PS2, Sony is ensuring that the PS3, which cost over $800 to manufacture when it was launched in late 2006, will soon be profitable at retail. Based on information provided by Sony CFO Nobuyuki Oneda, PlayStation 3 costs roughly $420 to manufacture, which is a mere $40 loss when sold to retail. PS3s are sold for approximately $380, and tagged with an MSRP of $400.
This is incredible, especially when you consider that Sony’s manufacturing geniuses have cut the console’s production costs by nearly 60% within the past two and a half years. As PS3 sales continue to climb, SCE’s profits should experience a significant boost, and it’s partially thanks to smart manufacturing. But as you may have heard, there may be even bigger drops in PS3 costs in the near future.
10 Responses to “As Production Costs Decrease, PS3’s Outlook Improves”
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May 16th, 2009 at 7:33 PM
these pictures are sweet. thanks draisey. i want that original one. i bet its a beast.
May 16th, 2009 at 7:54 PM
As PS3 sales continue to climb?
05/16/2009 at 9:33 PM
Annual Performance, not monthly. Last month was a huge dip in one territory (North America), but fiscally it keeps improving significantly.
May 16th, 2009 at 9:10 PM
Yeah, awesome pictures!
May 16th, 2009 at 10:45 PM
Nice. I can’t wait til more of my friends (local) finally realize that the PS3 is THE console to own this gen.
May 16th, 2009 at 11:13 PM
@ Jeneric
I totally agree. I love my 60 GB, worth the full price completely
May 17th, 2009 at 1:10 AM
John, I wasn’t speaking on just last month. Aren’t sales down overall, by comparison of last calendar year?
May 17th, 2009 at 1:13 AM
Globally, there’s no way of telling. North America is down, Japan is up, and Europe is an unknown.
May 17th, 2009 at 11:42 AM
Sony can do that.
May 17th, 2009 at 12:29 PM
Sweet, can’t wait for a PSP PS3 hybrid.
May 18th, 2009 at 8:53 AM
that’s normal, sony had the same problems with the ps2…but look how far its come in the last 9yrs.