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PS3 to lose Sony $1.18 Billion USD in 1st year?

29 June 2005

In the latest issue of Japanese magazine Toyo Keizai, Merrill Lynch Japan Securities revealed details that point to Sony selling the PS3 for approximately $399 US and losing approximately $103 per system before shipping expenses. With estimated 1st year losses of approximately $1.18 Billion US.

With some rough calculations based on these numbers, one can assume that Merril Lynch Japan has predicted Sony will sell 11 - 12 Million PS3's within the first 12 months on market at the estimated price point of $399.

Below are some of the comments from Ken Kutaragi concerning the PS3

"Whether consumers think a product is expensive or cheap all depends on the balance between its appeal and price, our ideal is for consumers to think to themselves, 'OK, I'll work more hours and buy it.' We want people to feel that they want it, no matter what."

"When Nintendo was selling its 16-bit machine at around 12,500 yen ($114), we sold the first PlayStation at 39,800 yen ($364), the press was saying that it was expensive, but it was a huge hit. It's the same thing with the PlayStation Portable from last year. The Game Boy Advance is a same handheld gaming machine, and it costs less than 10 thousand yen ($91). On the other hand, our PSP had cost 25,000 yen ($229). But people lined up overnight to buy it, and it sold out on the day of its launch. It all depends on whether people want it. Of course, I'm confident that the PS3 is a product that people will definitely want."


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