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PS3 Hardware Still Not Profitable For Sony - Report
Console manufacture looks to break even in 2010.
by Jim Reilly
US, December 11, 2009 - Despite the release of sleeker and slimmer redesign of the PlayStation 3 earlier this year, it seems Sony still hasn't figured out a way to turn a profit on its home console hardware.
According to a recent report from iSuppli, an electronic market research and consulting firm, Sony is still taking a loss on all PlayStation 3 consoles sold to this point.
There is good news for Sony, however, as the console manufacture has significantly cut down costs to only $336.27 per system, which according to iSuppli, causes the company to lose $37.27 on each sale.
Andrew Rassweiler, director and principal analyst for iSuppl, said its impressive how quickly Sony has been able to reduce cost and still almost break even in light of dropping the price PS3 $100 USD.
"Since the introduction of the PlayStation 3 in late 2006, Sony has subsidized the price of every console sold, a deficit the company has made up for with game sales and royalties," said Rassweiler. "However, with each new revision of the game console hardware, Sony has aggressively designed out costs to reach the hardware and manufacturing breakeven point as quickly as possible."
"The latest version of the PlayStation 3 manages to further reduce the loss, even with the U.S. price of the console having fallen by $100 during the past year," he added.
In October 2008, iSuppli's Teardown Analysis Service was able to determine Sony was taking a loss of $49.72 on each PlayStation 3 sold during that time period. iSuppli also says 2010 will see material costs decline significantly due to ongoing reductions in component pricing, and that console pricing is likely lower in the U.S. than any other country.
"In light of these factors, the PlayStation 3 probably is already at or near the tipping point for profitability," Rassweiler said. |
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