With the exception of Nintendo, console makers usually lose money when they first release a console. The goal is to make up the losses later on in the console’s life when production costs are cheaper and when they’re making enough money off accessories and games.

However, this round of consoles looks to be one of the biggest losses yet. Microsoft is currently losing $126 per XBox 360 sold. Now we find out Sony is going to lose $95 per PlayStation 3 sold.

All of this of course is going off quite a few assumptions. These numbers were released during a report by Merrill Lynch Japan.

Merrill Lynch Japan estimates that the machine’s main components, especially its Cell chip, RSX, and Blu-ray DVD-ROM, will cost about $101 each. After adding the other electronics that will be used in the PlayStation 3, the machine’s production comes to around $494.

That also feel that Sony is going to have to charge $399 when they release the console in America to compete with the XBox 360.

Apparently if all of Merrill Lynch Japan’s estimates are correct, Sony will lose $1.18 billion during the first year. By comparison, Sony lost only $458 million in the first year of the PlayStation 2. Yeah, only.

Christen Costa

Grew up back East, got sick of the cold and headed West. Since I was small I have been pushing buttons - both electronic and human. With an insatiable need for tech I thought "why not start a blog focusing on technology, and use my dislikes and likes to post on gadgets."