Traditionally, next gen consoles lose money during their first year of release for the manufacturers. However, according to market analyst Yuji Fujimori of Goldman Sachs, Sony,s PS3 may lose Sony up to a total of $2 billion dollars.
The reasoning behind the large figure is based upon the estimated loss per PS3 sold. According to the report, each PS3 costs Sony $750 to make. Since the entry version and fully loaded version of the PS3 are $499 and $599 respectively, this means a negative figure of about $150-$250 for every machine sold by Sony. Factoring in the number of consoles predicted to sell globally in the console’s first year of release, Sony could potentially lose $2 billion.
Industry analysts are in doubt as to Sony,s strategy of marketing their next gen console at the high end of the price spectrum-the game industry leader may have painted itself into a corner from which there is no escape. While many in the media and the gaming community have voiced their opposition to the pricing structure of the PS3, it is doubtful that Sony Corporation can do anything about their dilemma, because lowering the price points of their machines would further put them deeper into the loss column.
