Sony has confirmed that the PlayStation 4 will be sold for less than it costs to produce. However, the losses won't be anywhere near those experienced with the PS3.
When speaking to Eurogamer, Sony Japan's Masayasu Ito wouldn't confirm the extent of the losses but did say that the initial purchase would be profitable, as consumers are expected to buy more than just the console when it launches in November.
Ito's comments were expanded upon by Sony's Chief Financial Officer Masaru Kato, who cited that the PS4 wouldn't lose the company as much money as the PS3 did, because the components are more like a PC and that the cost to manufacture is 'much much smaller'.
To compare, when the PS3 launched in North America, the 60GB launch console cost $599 but its production cost was closer to $840. This was because of the Cell Processor and Blu-ray drive among other things. The PS4 has no such exotic hardware and as a result will cost $399/€399/£349 when it hits store shelves.
Sony really couldn't afford another money sink like the PS3, that much is certain.