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Sony may be losing hundreds on each PS3

Thursday, 15 May 2008 16:29
A reporter for the Guardian newspaper believes Sony may be losing $260 per PS3 shipped
Sony recently announced its financial results for the last fiscal year, showing it had cut losses by the PlayStation division by over 100 billion yen.

However, Jack Schofield of the Guardian newspaper speculates the platform holder may well be losing double the $130 (£65) per console its internal figures suggest.

"On Sony's own figures, the games division made a loss of $130 (£65) 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 $1.2 billion (£600 million) in the year. In that case, the total PS3 loss would have been $2.4 billion (£1.2 billion) shared between 9.24 million PS3 consoles, or $260 (£130) per PS3 - including any attached Sony games."

It isn't clear exactly how much Sony is losing on each PS3 it ships, but the fact the console is still unable to turn a profit has meant company management has indicated the likelihood of a price cut for the conole has dropped significantly.

This is according to Lazard Capital Markets analyst, Colin Sebastian. He believes Sony is currently more focused on segment profitability than increasing the PS3's market share.

Ever-present Wedbush Morgan analyst, Michael Pachter, recently speculated Sony would introducate a price cut for the PS3 later this year, when production costs of the hardware have slipped somewhat. This may no longer be the case.


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