PS3 to Lose $1.18 Billion in First Year

Many sources are reporting on an analyst report from Merrill Lynch Japan which claims that Sony will lose about $100 per console in the first year of sales. This translates to a $1.18bn loss. The report also guesses that the price of the PS3 will be $399 based on each unit costing $490 to manufacture. Although the suggested manufacturing costs may be too high, it doesn't lessen the fact that the PS3 will most likely retail for above $300. Losing money on a console is nothing new, just the scale of it is remarkable. In comparison, UBS suggested that Microsoft will lose $76 per console at the $299 price point. Difference is, MS has the cash reserves to absorb that, Sony just doesn't.