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
by years end?
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.
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.
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.
the end of the fiscal year
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.
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.
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.
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.
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....
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.
They need another 100 dollar price cut by the end of this year. If they can run out of 60GBs, replace the 60GBs with 80GBs for 499, and then drop the 80GBs to 399, then they would be in a very good position this Christmas.
I think that most of the folks here mix "price cut" and "breaking even"
Naw, most ppl just hope that breaking even will lead to a further price cut and Sony continuing to take losses.I don't think the price is going to drop any further until the cost of productions falls BELOW the retail price. I do believe that they will continue to agressively drop the price until they find that sweet spot though.
now can we have some decent news?
drtysouf, u're one of my favourite contributors still though
okay, so i fell for it again and read yet another article about "speculative" pricing and whatnot. the problem with this article is that people read it "lightly" and now are making comments as if the article had real facts in it. the sony exec said that "maybe" they could marginially break even by March 2008 "IF" they could cut down the cost of the cell processor, the rsx graphics chip, and the optical blu-ray drive...yes, they can reduce costs by March 2008, but they have to cut those costs down quite a bit. ALSO, the ps3 just dropped to $500, so they would have to bring costs down $300 to break even now, unless this price break truly is temporary and the price will go back up to $600 which would just suck since people have finally been getting excited about the lower price!
Actually, they aren't losing an additional $100. They'd been saving $100 in costs since around May... that's when the first drop in cost for blu ray components was announced. Standalone blu rays also fell in price around June.
Hard for once, i cant wait for this christmas
360 VS PS3
Full on!!! lol
was down to $100 dollars in losses from building ps3 by taking the emotion chip out,making more diodes and getting up to speed in manufacturing.but the price drop knocked them back to $200.
oh well,still awsome for me.i'm playing the heavenly(HEAVENLY)sword demo.
but who knows.everyone guesses,but sony is the only one that knows what they lose.
so they will break even.
Why?? Because they aren't counting the other price drop they are gonna need this holiday. PS3 will be $399 or it won't be at all. XBOX 360 is lowering it's price and it has Halo 3.
But if they were to break even wouldn't that mean they would have to make up in software sales what they lost in hardware sales for every unit? So if they lost $200 per console... and say they make $20 on every game (probably a stretch), each consumer would have to buy 10 games by then. I got a lot of love for sony but i don't see this happening this early. Maybe by the end of the next year.
Breaking even meaning the PS3 costs the same to make, as what they are selling it for. WTF does your software sales theory have anything to do with that?
I interpreted the breaking even as meaning making up the money they previously lost. But if they meant breaking even on future sales by that date then i don't see any reason they can't do that. Especially with the new 65nm chip.
if sony could make ps3 cheap to make they will gain some money.
if they could take out something that cost lot money to make like wifi they could make you buy it in the store like xbox 360 did.
aint gonna happen boys.Need I say the damned pay-s3 is too much $ for
the casual gamer.OOPS,just said it.
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