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PlayStation 3 Finally Turning a Profit on Each Console Sold

The PlayStation 3’s new motto is that “it only does everything.”  The gaming console also has a Blu-ray player, Web browser, and it even streams Netflix.  Well, now Sony can add one more thing to the list of things the PS3 can do: It can make a profit.

Since the PS3’s debut in November of 2006, every console been sold for a loss. With the move to a new cheaper and cooler RSX graphics card, the PS3 is finally showing a profit on each unit sold.

Engadget is reporting that the new chip is the final component needed to lower the manufacturing costs enough to make a profit, although no word yet on exactly how much profit that is. The chip’s new design decreases power consumption by 15 percent, which lowers the heat and allows a smaller cooling unit and heat sink as well, both of which further help to bring the manufacturing costs down.

When the PS3 originally debuted in 2006, early estimates put the manufacturing cost per unit at around $805 per console, which lost Sony between $225 and $305 per unit sold.  It isn’t uncommon for consoles to sell at a loss as manufacturers make up the difference through game prices and additional components like controllers, while waiting for the component pricing to inevitably drop, but the costs were higher than anticipated. By comparison, the Xbox 360, which sold at a loss of around $100 per unit when it debuted, quickly began to see a profit of $75per console within a year and a half of the its release.

In February, the Wall Street Journal broke down Sony’s fiscal reports for the third quarter and found that the Playstation 3 was still losing about $18 per unit.

The newfound profitability is good news for the PS3, which has been outselling the Xbox 360 on a month to month basis since last year. This also means that we can expect to see more potential prices drops in the months to come.

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