The PlayStation 3 is an expensive piece of hardware for both
consumers and SCEI. The entry price of the PlayStation 3 fell significantly in
2007 – and while component costs also went down, Sony was still selling
hardware at below cost.
At the time of the PlayStation 3 launch in mid-November 2006,
estimated that Sony was losing $240 on each 60GB PS3 and $300 on each 20GB
PS3 that it sold.
Sony’s gaming division chief Kazuo Hirai spoke at a news
conference at CES revealing hopes of turning a profit in the next fiscal year.
"We want to get to the positive side of the equation as
quickly as possible," said Hirai in a Reuters
report. "The next fiscal year starts in April and if we can try to achieve
that in the next fiscal year that would be a great thing. We are going through
the budgets right now. That (profitability) is not a definite commitment, but
that is what I would like to try to shoot for."
The introduction of the 40GB PlayStation 3 SKU brought the
entry price of the system down to $399 – a price that managed to entice buyers
to finally put down their money. Sony said that it sold 1.2 million PlayStation
3 consoles throughout the holiday season, representing two-thirds what it sold
in the rest of the year.
Given Hirai’s sentiments that the company is looking to "get
to the positive side of the equation," gamers will likely see the $399
(for the 40GB) and $499 (for the 80GB) price points sustain throughout the
Hirai’s comments also inadvertently reveal Sony’s failure to
meet hopes of turning a profit by the end of this fiscal year, which ends March
2008. Sony said in July 2007 that had hoped
to eliminate the negative margin during this period.
“For the negative margin to go away, the big trigger would
be the cost-down in the Cell and RSX semiconductors. They are the key, and also
optical pick-up is another factor, significantly,” Sony executive VP Nobuyuki
Oneda said in 2007.