gameshout.com(don't know how to do hyperlinks)
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Sony to lose $1 Billion in PlayStation 3
Posted Dec 13, 2005, 9:14 PM ET
According to a report from Merrill Lynch, Sony is expected to suffer a loss of more than $1 billion during the first year of the PS3 launch.
Merrill Lynch reports that Sony is expected to suffer a loss of more than $1 billion during the first year of the PlayStation 3 launch. The firm believes it will cost almost $500 to make each PS3 while Sony will sell the
console for $399. SCE president Ken Kutaragi doesn't think the price point will be a problem because consumers will want the new system very much.
Merrill Lynch has analyzed the cost of production for a Sony PlayStation 3 unit and the firm believes that it will cost Sony 54,000 yen (nearly $500) to manufacture. Merrill Lynch's estimates place the Sony PS3 to three major components (Cell processor, RSX chip from Nvidia, and Blu-ray/BD-ROM drive) at 11,000 yen or a little more than $100 each.
In order to compete with Microsoft's Xbox 360, which is expected to launch with a $299 MSRP this holiday season, the most Sony could sell the PlayStation 3 for would be $399. And that's precisely what Merrill Lynch predicts will happen. When the Sony PS3 ships in 2006, Merrill expects it to retail for 44,800 yen ($410) in Japan and $399 in America.
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I really don't know what to say to this

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