It’s not uncommon for video game companies to sell hardware at below cost with plans to make it all back (and eventually profit) from software sales. It’s the classic razor and blade model.
Over time, the platform holder eventually breaks even on the hardware and even later begins to make money. This hasn’t happened yet for Sony and the PlayStation 3.
When it launched in late 2006, Sony was losing hundreds of dollars on each console sold. While manufacturing costs have fallen since then, so too has the price of the system.
According to Japanese-centric site Andriasang, Sony CFO Nobuyuki Oneda said at an earnings briefing that the cost for a PlayStation 3 is still 10 percent higher than the system's price.
The PlayStation 3 is priced differently around the world, but given that the comments were made in Japan, a 10 percent loss per system would equate to 4,000 yen each ($41).
With Sony still losing money on each PlayStation 3 sold, that definitely restricts the company’s ability to bring in a price drop. Oneda did say that further cost reductions were in store for the hardware, but didn’t specify when (or if) those would translate to a price cut.
So for now, anyone buying a PS3 is still getting it cheaper than Sony can build them.