PS3 hardware now profitable for Sony

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Sony now no longer loses money on each PlayStation 3 console sold. Quite the achievement for a piece of hardware that originally cost the company in the region of $800 USD to produce, if not more.

No-one expected Sony to cut the price of the PS3 in 2009 when it was still a loss making proposition, but with the release of the improved PS3 Slim, the company gained some breathing space. However, with a new price point of $299, not even the Slim could turn a profit, losing approximately $18 per console as recently as this year. That is until we brought you the console’s latest revision.

Incorporating a 40nm RSX GPU, the CECH-2100A model included a number of revisions to its board and fan system, resulting in a 200g lighter system that pulled 15 per cent less power. Clearly, these numerous changes resulted in significant cost reductions, which Sony confirmed in its latest financial results:

“The company stopped losing money from PS3 consoles in March and will likely post an annual profit of at least 1 billion yen this year from PS3,” Nobuyuki Oneda, chief financial officer of Sony, revealed at a Tokyo news conference.

The cost of Blu-ray diodes have also dropped this year, with the console’s Blu-ray drive likely to have dropped to just $50 compared to its lofty 2009 $100 price.

Now that the PS3 hardware is finally bringing in a profit Sony needn’t rely on just software sales to prop up its games business. This is a games business that has been losing money since the release of the PS3 in 2006. Thankfully, although the division lost money for the full year, the last sixth months resulted in two straight quarters of profit, as confirmed by Oneda:

“The game business achieved a profit in the fourth quarter due to strong sales of first-party software and the elimination of negative margins on the PS3.” Oneda adds in reference to the games business: “For this year we expect to be able to generate at least double-digit profits.”

We expect that Sony has been able to cut in the region of $75, if the Blu-ray player costs are to be believed, which is quite the achievement. It may even leave room for a slight price cut before the year is out.

Readers Comments (11)

  1. Awesome that Sony’s finally turning a profit.

  2. nice, it looks its smooth sailing from here on out

  3. VofEscaflowne May 16, 2010 @ 16:04

    So the whole 10 year life cycle isn’t looking too far fetched anymore :p It probably won’t reach the same sale numbers though, haha.

  4. Moocows111111 May 16, 2010 @ 16:46

    Sooo how much are they profiting from every ps3 sold now? I didn’t see any info on that.

  5. this is cool, it will only get better from here on =D

  6. wow
    sony sold ps3s for 600 despite costing them more than 800 to make
    and made constant price cuts and dident earn a single buck of the ps3 all up until now
    i gues its safe to say that despite the ps3s price you were getting a loot more than what you payed for
    for the original ps3 buyers it ewen profit for 200$+

    i like the thought that there are some companies out there that dont feel like filling their greedy pockets with my money
    ceep it up sony

  7. Doominator99 May 17, 2010 @ 02:26

    good for them. now they dont have to be afraid of selling there PS3’s

  8. Meken Shonitin May 17, 2010 @ 10:25

    That’s good to hear. Now that Sony’s not struggling with that they can do even more for the system now. I’m looking forward to seeing what all they are going to do now.

  9. software and hardware sales are rising, there is no need for next-gen when Ps3 games are still good at the moment. The 10 years cycle looks promising to me.

  10. good sony deserve this and with the subscription on PSN they would hope to recover their losses which they made early in PS3 life cycle.

  11. Good news! If nothing else they need resources to put into PS4. 🙂

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