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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.


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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