It only took, uh, almost four years, but finally the PlayStation 3 console is making a profit. Hear that, Sony? You can cut back on the ramen and maybe keep that second kidney.
Sony exec Shuhei Yoshida happily tooted to IGN that the profit on PS3 might still be small but that “this year is the first time that we are able to cover the cost of the PlayStation 3,” and “we aren’t making huge money from hardware, but we aren’t bleeding like we used to.”
During almost every console’s life, a point is reached where manufacturing costs dip below its retail price. It’s been a similar tale with Microsoft’s Xbox 360 – the idea is that software sales make up the difference. That’s known as freebie marketing.
What upsets the freebie marketing applecart is when a cocky upstart like Nintendo makes weaker games hardware that makes a profit from day one and still sells more. That’s known as competent marketing.