SNE - Sony Is Selling the PS5 at a Loss but Investors Shouldn't Worry
Sony (NYSE: SNE) has been selling the PS5 gaming console at a loss since its launch last November. In its third-quarter report, Sony said its "strategic price points" for the PS5 were lower than its manufacturing costs.
Sony didn't disclose exactly how much money it loses on each sale, but Wedbush analyst Michael Pachter previously estimated Sony would barely break even on the full-featured PS5, which costs $500, and take a loss on each PS Digital Edition, which costs $400 and strips out the optical drive.
That news might seem troubling for Sony, since the PS5 is often cited as a major catalyst for its long-term growth. However, I'll explain why investors shouldn't fret over these short-term losses.
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Sony Is Selling the PS5 at a Loss, but Investors Shouldn't Worry