Sony Losing Money On PS3 Slim

The hardware business is not a profitable business. Don't believe us, just ask Sony.

When the original PS3 launched, Sony bled money on each PS3 sold. But the manufacturing process improved, and Sony was able to close the gap.

Just as that started to happened, the company is now launching a new hardware iteration. New hardware means new costs. When The Times asked Sony exec Kaz Hirai if Sony was losing money on the PS3 Slim, the exec said this:

If you're just talking about the hardware alone, the quick answer is yes. That makes good headlines, but I don't actually know that that's the true nature of the business that we're all in, whether it's PlayStation, Xbox or the Wii. I think the better indicator is to look at the business as a whole platform, to ask: are you profitable in terms of the hardware, software and peripherals. And the answer to that question is yes on a gross profit level since the last fiscal year.

So the small picture is that the PS3 Slim is not profitable, but the big picture is that PS hardware, games and peripherals are.

Oh, and thanks for the headline, Kaz!

Sony boss reveals plans for PlayStation [Times Online]


Comments

    Of course your going to lose money at the start where you have to consider fixed and overhead costs.

      mmm yes mmm yes. Fiscal dividends will go down 2.6% when taking into account the marginal spending and the KFC!

    I highly doubt Sony 'do it for the love of it', so they must be making money with the PS3, even if its not directly from console sales.

      Maybe you should re-read the article..

        Why? Did I miss the part about how Sony thinks of gamers and quality games before profit?

        The point to my previous comment is that Sony are in it for the money, and only if they're making money, which they are if you look at the big picture.

    It's a bit late in the game to still be taking losses on hardware, there's not much room to move is a price war breaks out.

    The PS3 Slim doesn't add any new features, am i correct?
    Is this a trend that we're beginning to see?
    Sony releases something trendy and stylish, slowly adds functionality to it and then releases a crippled and ugly version of it?

    I'm not a fanboy, but thoughts?

    One would think, choosing the Slim route that producing the hardware would be kinda cheaper. Stocking the product & being able to squeeze more stock into trucks, freight etc.. would be cheaper. The weight aswell.

    You may think, yeah, thats only a little. But it all adds up.

    If they're referring to the whole, "It costs this much to purchase the necessary items, plus this much to put it together, and we receive this much when sold and we're at a loss" fair enough.

    But if they're gonna count things such as sending out the consoles, the amount they can send at a time & all that. PLUS there Software & accessories, PS Point cards & PSN content, then they SHOULD be at a win.

    People are still wahhh about the price, which is a shame really. I would have only dropped it by $100 and not $200, thats what i was expecting really. Perhaps that is what Sony should do. Or hurry up and product a larger HDD Slim, which wouldn't alter the manufacture costs too heavily and then make some profit or a smaller margin of a loss on them!

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