Play Station Sales and production costs

The PlayStation 3's initial production cost is estimated to have been US$805.85 for the 20 GB model and US$840.35 for the 60 GB model.[71] However, they were priced at US$499 and US$599 respectively,[72] meaning that every unit was sold at an estimated loss of $250,[71] contributing to Sony's games division posting an operating loss of ¥232.3 billion (US$1.97 billion) in the fiscal year ending March 2007.[73] In April 2007, soon after these results were published, Ken Kutaragi, President of Sony Computer Entertainment, announced plans to retire. Various news agencies, including The Times[74] and The Wall Street Journal[75] reported that this was due to poor sales, whilst SCEI maintains that Kutaragi had been planning his retirement for six months prior to the announcement.[75]

In January 2008, Kaz Hirai, CEO of Sony Computer Entertainment, suggested that the console may start making a profit by early 2009, stating that, "the next fiscal year starts in April and if we can try to achieve that in the next fiscal year that would be a great thing" and, "that (profitability) is not a definite commitment, but that is what I would like to try to shoot for".[76] However, market analysts Nikko Citigroup have predicted that the PlayStation 3 could be profitable by August 2008.[77] In a July 2008 interview, Hirai stated that his objective is for the PlayStation 3 to sell 150 million units by its ninth year, surpassing the PlayStation 2's sales of 140 million in its nine years on the market.[78] In January 2009 Sony announced that their gaming division was profitable in Q3 2008.[79]

Since the system's launch, production costs have been reduced significantly as a result of phasing out the Emotion Engine chip and falling hardware costs.[80][81] The cost of manufacturing Cell microprocessors has fallen dramatically as a result of moving to the 65 nm production process,[81][82] and Blu-ray diodes have become cheaper to manufacture.[80][83] As of January 2008, each unit costs around $400 to manufacture.[84][85]