PS3 console sales may finally be profitable

Sony, which once lost more than $300 every time it sold a Playstation 3, may have finally lowered manufacturing costs enough to make a profit.

Japanese Web site PocketNews tore apart the hardware in the latest Playstation 3 Slim model, and deduced that its RSX graphics chip uses a 45 nm manufacturing process. But then Sony reached out to the Web site, clarifying that the new Slim GPUs actually use a 40 nm process -- even better. This allows the console to run cooler and use less power.

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It's not certain that Sony is profiting from the PS3 now. That's just what Engadget extrapolated from PocketNews' report. The 40 nm process allows for a smaller heat sink and power supply, and when combined with fewer adjoining chips, the potential for a cheaper console is there. In February, the Wall Street Journal reported that Sony still loses 6 cents on every dollar of hardware it sells (so, $18 on a $300 console).

Regardless of whether Sony is profiting or not on hardware, the Playstation 3 is gathering some momentum that's clearly earning Sony some money. Last month, the Playstation 3 dominated North American sales charts with heavy-hitting exclusives such as God of War III and MLB 10: The Show. It was by far the best software performance I've seen for the console, and software is traditionally how console makers turn a profit. That's why they're willing to sell consoles at a loss in the first place.

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Profits aside, the new manufacturing process has another benefit: GamesIndustry.biz notes that it should reduce the probability of the system-killing "Yellow Light of Death," in the same way that the Xbox 360's newer Jasper-based chips cut down on the infamous "Red Ring of Death." These are marvelous times if you're a late adopter.

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