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Every Time A PS3 Is Sold, Sony Loses An Xbox 360

iSuppli did its very popular accounting of the costs of major consoles, determining that the Playstation 3 is not only unprofitable, as expected, but that Sony loses the cost of an Xbox 360 Core System every time you buy one.

ps3-component-pricing.png

According to their figures, the 20 GB PS3 costs $806.85 to manufacture, while the 60 GB version costs Sony $840.35. That means that Sony loses $241.35 on the more expensive PS3 (which has better margins since it is certainly not worth $100 more than the other version), and loses an even worse $306.85 for every “cheaper” PS3, which is probably why you won’t see as many of those in stores (not that you’ll see a lot of PS3s in stores at all the next few months).

The great new for Microsoft: the Premium Xbox 360 costs $323.30, making it actually profitable (and earlier in the lifecycle than the original Xbox was). Microsoft is making money every time you buy a 360, which is probably why production is suddenly going a little faster. While Sony continues to lose money, Microsoft will be banking some, and if 360 sales start to flatline, Microsoft can always sacrifice some of that $75.70 margin for a price cut.

Imagine that: The Xbox 360 could be priced lower than the Wii, right now, and still be profitable. Microsoft should consider ending this console war right now by making the $600 PS3 look even more ridiculous by comparison.

November 17th, 2006 Posted by Nathan Weinberg | General, Xbox, Xbox 360 | no comments
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