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Sony Aims for PS3 Break-Even This Year

Sony currently incurs an estimated $200 loss on every PlayStation 3 sold, but an exec from the firm said today that loss could be eliminated this fiscal year

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next-gen.biz
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actionjackson3560d ago (Edited 3560d ago )

has nothing to do with break even. If anything, a price cut hurts the bottom line (break even point). Break even is dollars not quantity. To break even, you are manufacturing/shipping/selling /marketing the product equal to the current sale price. Read the article, it's talking about reducing manufacturing costs. This is actually great news for sony if they can make it happen. They will shave off $200 from the cost of making and selling the PS3. That's a 25% growth on efficiency of manufacturing.

Syko3560d ago

How will they break even with the whole RRoD fiasco...Oh wait wrong console ;P

Seriously though I thought the RSX would reach 65nm at or before the Cell got to 65nm. This still dosen't put them in a good position to get in a price war with MS. So they might still end up taking loses, after the price cut that is coming soon to the 360.

DJ3560d ago

Almost every part of that console either had never been produced, or had never been produced on that scale before. Cell costs around $83, and RSX is about $98. Blu-ray Drives are $70 (after the diodes dropped in price). Right now their main concern is eliminating the debt they accumulated from the first million consoles, which were sold at a $200~240 loss per unit.

There's little doubt that Sony will break even this year considering how fast Production Costs for the PS3 are dropping, and how the system's popularity is rising. Well, ok, more than just a little doubt, but things are looking better for them.

hotshot12373560d ago

the end of the fiscal year

Lightning Mr Bubbles3560d ago

If the PS3 gets in trouble again this holiday, I really believe they will have no choice but to cut the price again. It's not up to them, it's either cut the price or watch everyone buy the cheaper XBOX 360.

actionjackson3560d ago

what break even is. This is actually great for Sony. You are breaking even on a console that you were supposed to be losing $200 on. I'd say that is exceptional work to cut costs by that much percentage wise it's huge. If it is made and shipped for $800 (600 + 200), then a $200 decrease would be 25%. From an economic standpoint that is amazing for Sony. And I don't think the playstation is competing with X360. I think they are competing against themselves at the moment.

Anything but Cute3560d ago

That's why we expect another price cut, if they are close to breaking even, then it's possible and will be needed. I expect XBOX 360 to soar this holiday and for PS3 to be in heavy need of another price cut or die off.

So I understand indeed that breaking even is great news. They will need another price cut and if they are breaking even, it's obviously possible.

hazeblaze3560d ago

The 360 price cut won't be more than $50... it's not going to be significant enough to really mean anything to consumers. Especially not the ones that aren't 'turned on' by the type of games that come out on the 360.

On the other hand, we've already seen how effective the $499 price point is for Sony. And it'll be even more so this holiday with the stellar library of games the system will have by then. Sure, another price cut would help... but it won't be neccessary for them to enjoy a good holiday. In fact, might be better for them to save the next price cut for the release of MGS4 & KZ2.

aiphanes3560d ago

Remember the Xbox 360 does not include HD-DVD or bluray. Bluray is included in the PS3 along with wifi and a easy to upgrade 2.5 inch SATA harddrive. All sony has to do is make people know this and get all those awesome games out on time. They will own next year, with Infamous, Killzone 2, The Agency, MGS4....

Lightning Mr Bubbles3560d ago

The rumor is Microsofts Price cut is gonnna be $50 and there was a rumor of a 40GB PS3 for $399 from gameInformer. I belive both those rumors to be true.

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