Sony has lost over $3 billion on the PS3

[lch]

i thought the 40gb is selling very near to the actual cost.
of cos, even if they were starting to get profit, it still won't be able to cover the r&d cost.

[Neo65]

Originally Posted by lch

i thought the 40gb is selling very near to the actual cost.
of cos, even if they were starting to get profit, it still won't be able to cover the r&d cost.

Normally, all electronics goods have selling prices close to 3x the bom (bill of materials) which is roughly the cost of parts of building the thing, not counting any other fixed overhead costs (R&D is a fixed overhead). This is what's required to feed the food chain [the middlemen] ( including the salespeople ).

Game consoles have never been sold at this 3x bom as they do get a percentage of game sales --- the pricing of consoles look a lot like mobile phones and cable settop boxes --- the hardware can be subsidized because the service provider gets ongoing revenue from further sales or monthly charges.

[Bobby Henderson]

Originally Posted by Neo65

PS3s manufacturing costs follows a very predictable path, and Sony is not going to announce to the world that they are now technically profitable on the unit console basis (if it were).

A lot of people rushing to criticize Sony over this reported loss may be overlooking a common tactic of just about any major corporation: they sometimes do anything and everything they can to report as big a loss as possible if it reduces payments on things like taxes. It's just like an individual getting as many deductions as possible to reduce his tax burden.

Hollywood movie studios are infamous for the "rolling break even" brand of accounting they use. If you work on a film project, it's best to get paid up front. You may not see nearly as much as expected if you're waiting afterward to get paid on a "points" basis.

Sony could be writing down a lot of different things in this report as well to get it out of the way quickly. The faster Sony gets to profitability in its quarterly reports will translate into a faster rising stock price.

[Canada]

Look at it this way Sony won the format war so for the next 10 yrs or so people will be buying Blu Ray players. If Sony lost all that money it means that it is a better deal for the consumers. Sony will be able to recoup that money, they will even get royalties from Toshiba. But damn, $ 3 billion must hurt!