Sony PS3 to sell 12 Million in First Year?
Financially things aren’t looking so good for Sony. According to Merrill Lynch Japan the cost of a PS3 is about $494 and it will sell for $410 in Japan and $399 in North America. That will result in a loss of $1.18 billion in the first year.
Merrill Lynch Japan thinks it’s in the know when it comes to both the retail cost of the PlayStation 3, and the manufacturing cost. According to Toyo Keizai, the investment firm is saying that the PS3 is going to cost roughly US$494 to manufacture, but will retail for about $100 less, at the $399 price point. We’ve previously suggested that this would be the ideal price point for Sony, although it’s hard to know what Ken Kutaragi means when he says that the PS3 will be expensive. The fact of the matter is that the success of the Xbox 360 (or lack thereof) will probably have as much to do with the pricing of the PS3 as its manufacturing cost.
Given that Sony’s PS3 will face stiff competition from Microsoft’s Xbox 360, the chances that Sony will release its console at its production cost is slim. Under the assumption that the Xbox 360 is expected to sell at around $299, Merrill Lynch Japan predicts that Sony will sell each PS3 at the price of 44,800 yen ($410) in Japan and $399 in America. That would mean Sony would suffer a loss of more than 130 billion yen ($1.18 billion) during the first year of the PS3’s release.
Hmm, let me see. Assuming we take the $399 cost, where Sony would lose more. Divide $1.18 billion by ($494 – $399 =) $95, and you get 11,768,421. Wow. Does that mean that Sony will sell almost 12 million PS3 consoles in the first year? Wow. That would almost be worth the $1.18 billion loss!
Am I missing something? Or did Merrill Lynch Japan miss something?