"mganai" <lecter414@earthlink.net> wrote in message
news:NRIwe.11043$jX6.2400@newsread2.news.pas.earthlink.net...
>
> "greenyammo" <greenyammo@blueyonder.co.uk> wrote in message
> news:Sdtwe.77027$Vj3.63095@fe2.news.blueyonder.co.uk...
> > xenos wrote:
> >> http://www.gamespot.com/news/2005/06/28/news_6128295.html
> >> Report: PS3 to sell for $399, cost $494 to make
> >>
> >> Merrill Lynch Japan predicts Sony will lose more than $1 billion on
> >> hardware during its next-gen console's first year on the market--a sum
it
> >> may not be able to recoup.
> >> According to the latest issue of Japanese magazine Toyo Keizai, Merrill
> >> Lynch Japan Securities has recently calculated an analysis that the
> >> production of a single PlayStation 3 console will cost Sony
approximately
> >> 54,000 yen to make ($494), as of its initial release in 2006.
> >>
> >>
> >> Merrill Lynch Japan estimates that the machine's main
components--namely
> >> its Cell chip, RSX, and BD-ROM drive--will cost about 11,000 yen ($101)
> >> each. After adding the other electronics that will be used in the PS3,
> >> the machine's production cost goes up to 54,000 yen.
> >>
> >> Given that Sony's PS3 will face stiff competition from Microsoft's Xbox
> >> 360, the chances that Sony will release its console at its production
> >> cost is slim. Under the assumption that the Xbox 360 is expected to
sell
> >> at around $299, Merrill Lynch Japan predicts that Sony will sell each
PS3
> >> at the price of 44,800 yen ($410) in Japan and $399 in America. That
> >> would mean Sony would suffer a loss of more than 130 billion yen ($1.18
> >> billion) during the first year of the PS3's release.
> >>
> >> By comparison, the PlayStation 2 cost 39,800 yen ($364) in Japan and
$299
> >> in America when it launched in 2000. During its first year of release,
> >> Sony Computer Entertainment suffered a loss of 51.1 billion yen ($458
> >> million), but it recovered the next year with a profit of 82.9 billion
> >> yen ($759 million), followed by 112.6 billion yen ($1.03 billion) the
> >> year after.
> >>
> >> It is normal for game companies to take a loss on hardware whenever a
new
> >> console launches, since they typically focus on acquiring market share
> >> rather than generating a profit during the first year. During the
second
> >> year and afterward, they can recover the losses with the savings that
> >> come from mass production and with licensing fees from publishers.
> >>
> >> However, Merrill Lynch Japan warns that the normal console business
cycle
> >> may be disrupted if Microsoft cuts the Xbox 360's price when the
> >> PlayStation 3 launches. The report goes on to say that such a move
could
> >> hurt Sony's plans, bringing an additional loss of 80 billion yen ($730
> >> million) in its second year and 50 billion yen ($457 million) in its
> >> third year. Thus far, Sony has already invested 200 billion yen ($1.83
> >> billion) into development and production for the Cell chip alone.
> >>
> >> Toyo Keizai goes on to interview Sony Computer Entertainment president
> >> Ken Kutaragi, who avoided revealing the PS3's price but hinted that it
> >> would not be marked down excessively. "Whether consumers think a
product
> >> is expensive or cheap all depends on the balance between its appeal and
> >> price," he said. "Our ideal [for the PS3] is for consumers to think to
> >> themselves, 'OK, I'll work more hours and buy it.' We want people to
feel
> >> that they want it, no matter what."
> >>
> >> "When Nintendo was selling its 16-bit machine at around 12,500 yen
> >> ($114), we sold the first PlayStation at 39,800 yen ($364)," continued
> >> Kutaragi. "The press was saying that it was expensive, but it was a
huge
> >> hit. It's the same thing with the PlayStation Portable from last year.
> >> The Game Boy Advance is a same handheld gaming machine, and it costs
less
> >> than 10 thousand yen ($91). On the other hand, our PSP had cost 25,000
> >> yen ($229). But people lined up overnight to buy it, and it sold out on
> >> the day of its launch. It all depends on whether people want it. Of
> >> course, I'm confident that the PS3 is a product that people will
> >> definitely want."
> >>
> >>
> >>
> > The bigger they are the harder they fall. Sony's time at the top will
have
> > end at some point (maybe not even this generation) I just hope they
> > haven't invested so much money that it brings down their TV empire as
> > well.
> >
>
> OTOH there are other better purveyors of TV electronics, so it'll hardly
be
> a huge setback in the big scope of things.

not CRT direct view there isn't