Sony Loses $300 Per PS3

November 17, 2006

Sony Playstation 3: $500-$600 (depending on model)

Microsoft XBox-360: $300-$400 (depending on model)

Nintendo Wii: $250

And that, my friends, would be reason enough for me to say yes to Wii and no to the others. But another reason is the fact that I have a need to play the next version of Zelda (see previous post).

Speaking of those high prices, though, I hear Sony is actually losing $300 per unit on the PS3. You heard that right: they lose $300 every time they sell a Playstation. It’s estimated that it costs them over $800 to build the things. Why are they doing this? Blu-ray.

Blu-ray is a new high definition DVD format. It competes with the HDDVD format. Naturally Sony wants to win the format war so they get a cut every time someone buys a high def movie on a disk. So what they decided to do is put the blu-ray drive in the PS3, sell it at a loss, then a million homes suddenly already possess the ability to play blu-ray disks. Bing, bang, boom and the format war is over, with Sony the victor. Or so they hope.

So the PS3 is really just Sony’s Trojan horse in the battle for high definition movie disks.


No comments yet

  1. Maybe they’ve learned from the Beta vs. VHS war of the past.

  2. I think Sony’s problem is that they’re so busy leveraging successful products to achieve other strategic business goals that they’re killing their golden geese in the process.

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