Report: PS3 to sell for $399, cost $494 to make

Discussion in 'Game Zone' started by xbox360, Jun 29, 2005.

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  1. xbox360

    xbox360 New Member

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    i found this and it doesnt seem old because most consoles dont make money until like 4 year and MS xbox did that in like 3 years but the xbox cost MS about 400 to make and sold for $300. so i dont think sony cares but sony is in hard times.

    According to the latest issue of Japanese magazine Toyo Keizai, Merrill Lynch Japan Securities has recently calculated an analysis that the production of a single PlayStation 3 console will cost Sony approximately 54,000 yen to make ($494), as of its initial release in 2006.


    Merrill Lynch Japan estimates that the machine's main components--namely its Cell chip, RSX, and BD-ROM drive--will cost about 11,000 yen ($101) each. After adding the other electronics that will be used in the PS3, the machine's production cost goes up to 54,000 yen.

    Given that Sony's PS3 will face stiff competition from Microsoft's Xbox 360, the chances that Sony will release its console at its production cost is slim. Under the assumption that the Xbox 360 is expected to sell at around $299, Merrill Lynch Japan predicts that Sony will sell each PS3 at the price of 44,800 yen ($410) in Japan and $399 in America. That would mean Sony would suffer a loss of more than 130 billion yen ($1.18 billion) during the first year of the PS3's release.

    By comparison, the PlayStation 2 cost 39,800 yen ($364) in Japan and $299 in America when it launched in 2000. During its first year of release, Sony Computer Entertainment suffered a loss of 51.1 billion yen ($458 million), but it recovered the next year with a profit of 82.9 billion yen ($759 million), followed by 112.6 billion yen ($1.03 billion) the year after.

    It is normal for game companies to take a loss on hardware whenever a new console launches, since they typically focus on acquiring market share rather than generating a profit during the first year. During the second year and afterward, they can recover the losses with the savings that come from mass production and with licensing fees from publishers.

    However, Merrill Lynch Japan warns that the normal console business cycle may be disrupted if Microsoft cuts the Xbox 360's price when the PlayStation 3 launches. The report goes on to say that such a move could hurt Sony's plans, bringing an additional loss of 80 billion yen ($730 million) in its second year and 50 billion yen ($457 million) in its third year. Thus far, Sony has already invested 200 billion yen ($1.83 billion) into development and production for the Cell chip alone.

    Toyo Keizai goes on to interview Sony Computer Entertainment president Ken Kutaragi, who avoided revealing the PS3's price but hinted that it would not be marked down excessively. "Whether consumers think a product is expensive or cheap all depends on the balance between its appeal and price," he said. "Our ideal [for the PS3] is for consumers to think to themselves, 'OK, I'll work more hours and buy it.' We want people to feel that they want it, no matter what."

    "When Nintendo was selling its 16-bit machine at around 12,500 yen ($114), we sold the first PlayStation at 39,800 yen ($364)," continued Kutaragi. "The press was saying that it was expensive, but it was a huge hit. It's the same thing with the PlayStation Portable from last year. The Game Boy Advance is a same handheld gaming machine, and it costs less than 10 thousand yen ($91). On the other hand, our PSP had cost 25,000 yen ($229). But people lined up overnight to buy it, and it sold out on the day of its launch. It all depends on whether people want it. Of course, I'm confident that the PS3 is a product that people will definitely want."
    got this at
    http://www.gamespot.com/news/2005/06/28/news_6128295.html
    test
  2. ChaseNCashe

    ChaseNCashe If it aint Polo, Keep It!

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  3. PotHead

    PotHead average brilliance

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    crazy figures in there,

    the gaming business is HUGE
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  4. Wowzer

    Wowzer like wow.

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    screwwwwww PS3, GO XBOX!!!!!
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  5. xbox360

    xbox360 New Member

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    GO Xbox360.
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  6. Flow-Joe

    Flow-Joe Annyong!

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    PS3 Bitches
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  7. Maurkadi

    Maurkadi Well-Known Member

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    X-Box 360 you fag muffins!!!!!!!!!
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  8. Wowzer

    Wowzer like wow.

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    playstations are for little children trying to learn shapes and colors...parents buy them a PS so they can catch on much quicker to them.
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  9. xbox360

    xbox360 New Member

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    lol that is funny
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  10. !ron HorSe

    !ron HorSe New Member

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    Word. I'm copping a PS3. They get more money back from selling games and accessories anyway.
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  11. xbox360

    xbox360 New Member

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    not true the Microsoft lost about $50 for xbox and never made it back, so this most likely will not make them money, but the Price can change.
    test
  12. Flow-Joe

    Flow-Joe Annyong!

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    that's not that much money
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  13. xbox360

    xbox360 New Member

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    $50 for every xbox made,1 million would =50 million 2million=100 million
    test
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