Gamespot: Sony losing hundreds on each PS3 while Microsoft is making money

iSuppli breakdown pegs cost of manufacturing $499 20GB console at $805, $599 60GB console at $840. Thanks to streamlined processes and ample component supplies, iSuppli estimates that Microsoft now makes $75.70 per Xbox 360 console.

[EasilyTheBest]

Thats just one hell of a lot of money for Sony to be losing on each console, hey their in the red now i hear. What if microsoft buys up all the ps3s and just sticks them in an empty warehouse. Sony would lose millions as they wont make the cash back on any games sold. In the future when the Ps3 are worth loads for being so rare n hard to find microsoft could sell them on ebay....

[Marriot VP]

haha interesting idea, never thought of that. However more consoles sold would trick developers into believing sony's console base is bigger than actual, so more exclusives and ports. So it wouldn't really work.

[shotty]

I have a feeling microsoft is going to outspend sony into the red. Sony is already losing tons of money per a console sold, add into that advertising, shipping and other expenses and it's going to get costly.

The ps3 not shipping with component cables is showing that sony is trying to shorten the loss as much as possible but in the end every ps3 sold makes the wound that much worse.

[DJ]

Sony put a crapload of new technology in their system, things that Microsoft didn't even attempt. Hopefully it'll pay off. Microsoft was losing $200 on each console during their launch, but their console was only $400. Consumers have to absorb some of the new technology like Bluetooth, HDMI, Gigabit ethernet, and Blu-ray. I was pretty surprised that Blu-ray only costs $110 to manufacture. Ok yeah, it's a lot for a disc drive, but considering the system itself costs $850 it's not all that significant. Even if they shoved in a DVD drive the systems would cost $780. Not all that big a difference.

Production costs will decrease from day 1, but how fast they decrease is uncertain. It's good to see that Microsoft's making a profit off their hardware now. Maybe their 5 billion dollars of debt will finally get paid off.

[emandm]

About two years ago Microsoft was valued at 87 billion, six months ago Steve Balmer (the no 2 at microsoft) had a personal fortune estimated to be in the region of 16 Billion. How do you work out they have 5 billion debt from the 360, and if a blueray drive only costs Sony $110 why do they sell the players for $1000 dollars sounds like another Sony ripoff then, if your facts are right. Well i suppose Microsoft will "prop" themselve's up by selling Vista, Sony can always rely on selling pink playstation 2's to little kid's oh how they milked that one.

[DJ]

Not Microsoft Corporation. If you really want to know why Blu-ray drives are $120 (i was wrong when i said 110, found new data) is because that's all it is. A disc drive. It takes a LOT of processing power to do 1080p video decoding/output, and when you buy an HD-DVD or Blu-ray player you're paying mostly for the PC components inside like CPU, RAM, motherboard, etc. There's also start-up costs for manufacturing and design.

HD-DVD and Blu-ray players cost roughly the same amount of money to manufacture. The early Toshiba HD-DVD players were sold at $500, which is hundreds below their manufacturing fees. It was sort of a desperate, but intelligent move in order to get some early market penetration.

[sparco]

And that word is pr!ck.

Every problem that Sony is having, you have to make a story up that Microsoft/Xbox division is having exactly the same problem. Your always talking boll0x. The story is saying that Sony are losing hundreds for every console sold, so you have to get straight in there and say "If only 360s were selling faster". Fu**in ell d!ck head. They're selling fine! I dont see too many PS3s selling at the moment. And i wonder why. COuldnt be anything to do with blueray could it? And all that "technology" in the "P$3"?

ya know what, just f*k off. Cnt be fu**ed to say anythin else.

[BlackCountryBob]

Thats a lot of money to be losing, especially when they are banking on making back profits through game sales where they have shifted less than 1 per console sold! Its a good thing that Sony are such a big company to take this hit in the short term as there are very few others who could!

[super bill]

videl and dj.sony had it there loseing money and the ps3 is crap just look at the games gundam 2 out of 10 reviews what a load of crap the ps3 is.360 all the way nice knowing you sony.looks like you met your match with bill gates.

[EnforcerOfTheTruth]

I'm not sure, but doesn't have PS3 other games than Gundamn? Aren't RFOM, RR7, NBA 2K7, etc. PS3 games?

emandm - In the players is a lot more inside than just the Blu drive. Motherboard, CPU, etc.

[CG]

RFOM is just an ok game NOT a killer app.And all the 3rd party games so far looks & plays better on the 360.

Look it up...

[FirstknighT]

I'm surprised Microsoft is making a profit so early, I expected somewhere in mid 2007 with the updated chips. Sure seems like Microsoft is ready for the next gen!

[WhEeLz]

So what they,re losing money...their doing it for their fans...and the console war is not about how much money you make...its how many you sell

[BlackCountryBob]

Don't be so misguided, Sony are first and foremost a company who want to make money, it is their primary aim above all others, just like every other corp on earth, don't try and kid your self that gaming companies care only for gamers, they couldn't care less about you, me or anyone else on this site, they only care about Mr x, a 47 year old business man in a Lexus who owns a 0.02% stake in Sony corp.

[xtopher]

sony has to replace busted consoles? They then lose 800 more dollars. They could probably remanufacture the busted one, but at what cost?

Wonder if theyll make a mini ps3 with a external power brick?

[D3acon]

When did microsoft's game industry start making a profit? They are still operating at a loss, their game industry has lost a lot of money and are only around because of Bill Gate's deep pockets. Analists(guessers) are saying that the earliest profit for the 360 will not turn a profit until about September 2007 or later. I don't believe the xbox turned a profit until the release of the 360.

Microsoft is absorbing costs from the "known" broken launch systems they shipped. They are fixing and refunding those xbox 360s that were bought befoe January 1st, 2005.

My point is that both companies are having their own problems so picking at what Sony is doing wrong doesn't make any sense. The Ps3 will have issues, accept it, the xbox 360 has its issues, accept it. Just stop bickering like pre teens.

I wish this site didn't attract so many fanboys. I'm just sick of all the "my system is better and yours is stupid," nonsense. This is the exact reason that Wiki online encyclopedia has stopped taking submissions for the consoles.

Everything with you people is a "flame war" and nothing constructive is ever achieved. I use to enjoy reading the comments before the article, but I guess I just need to stop reading the comments because nothing productive comes from reading them.

[Marriot VP]

Well this shows that it's gonna take years for PS3 to drop it's price. Sure they'll bundle probably late 2007, but with a 500-600 price it'll pretty much be the same.

And with the 360, it'll have a price drop early 2007. I have no idea how much, probably 50 on each unit to match the Wii's price. I think it's obvious why a 360 price drop isn't smart before christmas anyways. Also 400 bucks is very expensive by the way for normal consumers.

[LuminousAphid]

That means that they're losing almost $100 million on hardware at launch with 400,000 systems (It's even more than this, as they're losing more than $300 on the lower-end bundle). That's not a little, even for a company is big as Sony. I still hope they survive just for competition's sake. Competition means more good games for everyone.

P.S. Does anyone smell bull****?
$599-$499 = $100 difference.
$840-$805 = $35 difference.
So you're basically paying $100 more for a console that is actually $35 more expensive. Once again, good going Sony.

[Say's you]

Respending there money again that they made over the 360 thier using that money that they are making on the 360 on advertisement so there still getting the same amount of money all over again so really thier not getting that much amount cause they keep using the same amount of $10 billion that they sell from the 360

so there just going in circles each time there 360 is sold they keep getting $10 billion and reusing the same that money again for there advertisement so there just plain dumb there not making money thier just getting the same amount as alway's while Sony in the other hand barely used there money to just advertise there system.