PS3 Japanese Price Drop 'Ridiculous'

Gamasutra reports on comments from a Japanese analyst group, characterizing the pre-launch price drop for the Japanese market as ridiculous. From the article: "Meanwhile, Naoki Fujiwara of Shinkin Asset Management suggested that the price reduction was 'negative for the short term because the company may not be able to sell enough consoles to cover an instant loss caused by the price cut.' The PlayStation 3 was already expected to be sold at a loss, with Sony allowing up to five years to recoup the costs. Shares in Sony fell 1.9 percent following the announcement, although this coincided with a generally poor day for the Tokyo Stock Exchange and may not be entirely related to the price cut."

Comments

Re:Wait what?

[SkullMac]

Ah, but in order to sell more units, they must order more parts to manufacture the extra units. A larger order for parts means a larger bulk discount, thus reducing the loss per unit. As component prices continue to fall over time, this can eventually become a profit per unit.