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Originally Posted by Stompy
I doubt they're eating $70 per unit sold. How would you make money?
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oh man, they've got to be. think about how far 200 dollars will take you getting a piece of established hardware like an mp3 player. think about how much more went into the PSP. you've got the actual computing hardware, nice lcd screen, integrated battery etc. that must all be individually designed for the first time in a tiny form factor. toss in the enormous R&D costs for bringing a brand new portable product to market, developing new media, manufacturing and a hefty promotional/marketing budget. Sony is easily losing money on each PSP.
what makes this a good idea? Sony makes excellent margins on each game sold. Also, everytime a PSP is purchased it makes it likely that one more DS won't be sold. great initial market penetration to begin with will give Sony dibs on a greater share of the handheld profits to be had for the duration of the system cycle.