Sony loses cash on each PS3 sold

What a strange business plan. According to gamesindustry.biz, Sony will lose over $300 on each 20GB PS3 sold, "And a further US$ 240 on high-end 60GB unit". From the article:

"The size of Sony's loss per unit is remarkable, even for the videogame console business," said [research group] iSuppli. ... He continued: "There is nothing cheap about the PlayStation 3 design. This is not an adapted PC design. Even beyond the major chips in the PlayStation 3, the other components seem to also be expensive and somewhat exotic."

That's still a big loss on the first weekend of launch.

However, this isn't a new business model in the console business. Last year, iSuppli calculated that Microsoft loses approximately $130 for each Xbox360 sold.

The cost of the difference is buffered by software sales, which may explain why the PlayStation software floods the market.

Thanks Dave, Paul and Bambino_Tostare!