For those of you wishing for a price cut with the PS3 think again.
Sony says that it is losing $50 on every PS3 it sells right now. If they were to reduce the cost $100 they would go from losing 11% to 33%.
This is why it will never happen and why XBOX360 will always out selling ahead. The fact that Microsoft can support losing 33% is why the XBOX360 can get a big price cut.
When Sony has a new console ready then the price will drop, but I believe they need to spend more time on their firmware and extending their warranties than cutting the price of the console. Sony, are you listening?
To quote: In late February an analyst with Janco Partners claimed a price drop announcement from Sony was due "in the next couple days." Nearly a month later, no word on so much as a sales snip.
But Sony's still losing about $50 per PS3, according to Business Week, which pegged Sony's costs at $448.73 per system as recently as December 2008. If Sony dropped the retail price of the PS3 by $100, they'd increase their per unit losses by nearly a quarter ? from 11 to 33 percent.
What's more, GamePro writes that Sony senior vice president of marketing Peter Dille says "there are still no immediate plans to cut the prices of the PS3 consoles."
Janco's Mike Hickey recently repeated his claim that Sony's going to drop the PS3's price "by next month."
The internal business cosmology of economic indices that ultimately dictate when Sony drops the PS3's price ? and by how much ? are impossible to estimate in a planning capacity.
At some point Sony's manufacturing costs will drop sufficiently and the internal bean counter fiscal financial minimums will align with some executive's "tolerable losses" formula, thus setting the cogs and wheels cranking on a price "event" announcement.
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