We all want it, but will be able to afford it? A prediction made by Merrill Lynch Japan has us wondering how much Sony’s PlayStation 3 is going to cost. It is normal for manufacturers to undersell new consoles because they desire to gain a large market share rather than making a profit. In the second year of the console being on the market, the manufacturer will profit from licensing fees and mass production.
But Merrill Lynch Japan predicts that Sony may lose more than one billion dollars on hardware in the first year of the PS3 being on the market. And they believe Sony may not be able to recover from this kind of loss.
So here’s the breakdown. According to the latest issue of Toyo Keizai, a Japanese magazine, the PS3 should cost approximately $494 to make. In order to remain competitive with the Xbox 360, Sony will not be able to sell the product at such a high price. The Xbox is predicted to sell for $299. Merrill Lynch Japan predicts the PS3 will sell for $399 in America. Sony has not yet commented on how much they plan to sell it for, although they have hinted that it will be significanly discounted from the price it will cost to manufacture.
“When Nintendo was selling its 16-bit machine at around $114, we sold the first PlayStation at $364,” commented Ken Kutaragi, Sony Computer Entertainment President, in an interview with Toyo Keizai. “The press was saying that it was expensive, but it was a huge hit. It’s the same thing with the PlayStation Portable from last year. The Game Boy Advance is a same handheld gaming machine, and it costs less than $91. On the other hand, our PSP had cost $229. But people lined up overnight to buy it, and it sold out on the day of its launch. It all depends on whether people want it. Of course, I’m confident that the PS3 is a product that people will definitely want.”
We were wowed by the PlayStation 3 when I heard specs on it at Sony’s press conference and we predicted it would retail for $300-$400. Did we think it was worth it? Absolutely. But start saving now. The PlayStation 3 is set to debut in Spring 2006.
Don’t know much about the PlayStation 3? Check it out by clicking on Cheat Code Central’s PlayStation 3 icon for full coverage plus our analysis on the PS3 verses the Xbox.