Thursday, July 26, 2007

Sony Aims For PS3 Break-Even This Year.

Sony currently incurs an estimated $200 loss on every PlayStation 3 sold, but an exec from the firm said today that loss could be eliminated this fiscal year.

During a conference call Sony executive VP Nobuyuki Oneda said the firm may be able to break even on PS3 hardware this fiscal year, which ends in March 2008.

He said that the main cost-downs would have to occur in the Cell processor, RSX graphics chip and Blu-ray optical components.

"The removal of the negative margin will be when all of these factors have come out. Maybe, marginally, we could achieve this during this year," Oneda told a Citigroup Securities analyst during a Q&A session. Oneda still couldn’t specify exactly when this break-even point may happen.

"For the negative margin to go away, the big trigger would be the cost-down in the Cell and RSX semiconductors. They are the key, and also optical pick-up is another factor, significantly," he said.

Oneda confirmed that Sony is working on transitioning the PS3’s chips from 90nm to 65nm, which would reduce costs significantly. He said the Cell would be the first PS3 chip to make the migration, followed by the RSX chip.

Game console makers typically sell hardware at a loss, and make up for this through software sales. Nintendo, however, has made it a point to sell its hardware at a profit.


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