PlayStation 4 consoles are selling for less than the cost of manufacturing, but Sony expects to recover those losses before customers leave the store on launch day.
The logistics of console sales aren't as simple as they used to be. In order for Sony to stick to the PS4's $400 price tag, they're taking a direct loss with each sale - the console takes about $60 more to produce than it's selling for, Eurogamer reports. Multiply that by the five million units Sony anticipates selling by the end of the year, and the company is losing a good chunk of change. Even with those numbers, though, all it will take to get Sony back in the green is for each PS4 buyer to purchase one launch title and a subscription to PlayStation Plus.
Sony Japan executive Masayasu Ito says that for the initial losses from one console will be recouped in the average PlayStation customer's first purchase. After all, these consoles aren't for decoration; by the time a user can really start enjoying their purchase Sony will be turning a profit.
This is looking like a much safer gamble than the PS3, which (depending on which version you bought) was selling at a loss of over $300 per unit on launch day. The PS4 manages to be more profitable at a lower price due to its shift to PC-like architecture, as opposed to its predecessor's custom hardware components.
The PlayStation 4 hits shelves on November 15.