PlayStation 4 to sell at a loss, but Sony expects profit
The company says that it'll be able to make up the loss by generating revenue off PlayStation Plus and the purchase of one launch game.
Although Sony will be selling its PlayStation 4 hardware at a loss, there's a good chance it still might be able to make a profit on day one, the company says.
Speaking to Eurogamer in an interview published on Friday, Sony Japan's Masayasu Ito said that while his company will lose money on every PlayStation 4 it sells, with help from PlayStation Plus and game sales, it should be able to generate a slight profit on every gamer.
According to Eurogamer, Ito said that after a gamer buys a PlayStation 4 for $399, as long as they buy a new game from the device maker and open a PlayStation Plus account, Sony will be able to generate a slight profit on that person.
The PlayStation 4in North America and November 29 in Europe.
It's not uncommon for new consoles to lose money at launch. In fact, most console makers sell their hardware at launch at a loss to get the price down, increase their install base, and attract more developers. Over time, as hardware pricing falls, the companies' margins rise and the revenue they generate through developer partnerships goes up with them.
It's not clear how much Sony will lose on each PlayStation 4 sale. However, Eurogamer claims that it could be in the $60 range, citing "well-placed" sources. It's believed that Nintendo is also losing money on every Wii U it sells.