http://videogames.yahoo.com/feature/son … s3/1223467Sony has lost over $3 billion on the PS3
Mario and Master Chief seen hi-fiving.
By Ben Silverman
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Think you paid too much for your Playstation 3? Don't expect any sympathy from Sony.
In the company's fiscal 2008 annual report, Sony revealed that they've now lost roughly $3.3 billion (that's billion with a B) on the Playstation 3 since its launch. That breaks down to $2.16 billion in 2007, followed by a notably smaller but equally daunting $1.16 billion loss in 2008.
The reason? Pricing the console below its production cost. That's right - that hefty $599 you paid for the PS3 back when it first launched was significantly cheaper than the cost of producing it in the first place, and while the retail price has come down some, the losses keep piling up.
Investors have reason to sweat. In a statement, Sony claimed "the large-scale investment required during the development and introductory period of a new gaming platform may not be fully recovered." They went on to note that they've invested a great deal of money into R&D for the console, a sum they might not be able to recoup if the PS3 "fails to achieve such favorable market penetration."
Sony fanboys should take heart, however. Losing money on hardware is relatively common in the video game biz, as companies routinely lower prices to sell more units and thus stimulate software sales. Sony's game division saw a 26% sales spike last quarter, a trend they expect will continue on the strength of strong exclusives like the recently released Metal Gear Solid 4 and the upcoming sequel Resistance 2.
But will it be enough?
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Sony = Fail
If a blue ray player costs over $500 alone then why charge less than that if they plan on making a profit?
If a blue ray player costs over $500 alone then why charge less than that if they plan on making a profit?
They don't plan on making a profit within the first 3, consoles have a 5-10 year life cycle. Microsoft has made a total loss in the billions aswell even though they may now be making yearly profit.
Nintendo has made profit from the word go though thanks to the success of the wii and the console being individually profitable.
Nintendo has made profit from the word go though thanks to the success of the wii and the console being individually profitable.
Maybe Sony should try the MS route and build their systems with shoddy components that fail regularly.
On a side note:
The fact that the Wii has done so well baffles me. It's a game cube with special controllers.
On a side note:
The fact that the Wii has done so well baffles me. It's a game cube with special controllers.
I hear that the Blu-Ray player of the PS3 is substantially lower quality than the actual players in the box (Primary Blu-Ray players)ebug9 wrote:
Sony = Fail
If a blue ray player costs over $500 alone then why charge less than that if they plan on making a profit?
Mines still running fine after tearing it apart and modding it. Pretty good parts to me.Volatile wrote:
Maybe Sony should try the MS route and build their systems with shoddy components that fail regularly.
On a side note:
The fact that the Wii has done so well baffles me. It's a game cube with special controllers.
http://www.joystiq.com/2008/04/25/the-x … fit-again/Vilham wrote:
They don't plan on making a profit within the first 3, consoles have a 5-10 year life cycle. Microsoft has made a total loss in the billions aswell even though they may now be making yearly profit.
Nintendo has made profit from the word go though thanks to the success of the wii and the console being individually profitable.
http://www.videogamingblog.net/2008/01/ … hrough-q2/
You made me check .
Xbone Stormsurgezz
I'm reffering to the high failure rate(some claiming 30% http://www.smarthouse.com.au/Home/D3Q7G8S2) that obviously not everyone will experience.NeXuS4909 wrote:
Mines still running fine after tearing it apart and modding it. Pretty good parts to me.Volatile wrote:
Maybe Sony should try the MS route and build their systems with shoddy components that fail regularly.
On a side note:
The fact that the Wii has done so well baffles me. It's a game cube with special controllers.
I'm curious, what mods did you perform? I would guess something that would keep the system cool?
Yeah microsoft has finally started turning a profit per quarter with the xbox, but they still have to recoop the loss they made for the first 2 years.
I saw that they started breakin even in 06?Vilham wrote:
Yeah microsoft has finally started turning a profit per quarter with the xbox, but they still have to recoop the loss they made for the first 2 years.
Edit:.. well the end of 06 http://www.techspot.com/news/23612-micr … dware.html
Xbone Stormsurgezz
This is actually good news for Sony customers. It means we spent little on a product that obviously has had a lot of time and money go into it. Unlike the xbox which is over priced for what it is.
At this point I think Sony is counting on the PS3 to be a long term success and the still had their pride.
Thats just it...the controllers is what makes it so appealing. Id still rather a controller at this stage though.Volatile wrote:
The fact that the Wii has done so well baffles me. It's a game cube with special controllers.
Serious Flex
Or maybe the 360 just came out a year before.TheAussieReaper wrote:
This is actually good news for Sony customers. It means we spent little on a product that obviously has had a lot of time and money go into it. Unlike the xbox which is over priced for what it is.
Xbone Stormsurgezz
two words
GRAN TURISMO?
GRAN TURISMO?
Glad to see that Nintendo has found a niche market. Really would like to get a Wii and get that Zelda game for it, though.
Flawed logic. Spending $10,000 on a fur coat that is normally $100,000 is still a waste of money.TheAussieReaper wrote:
This is actually good news for Sony customers. It means we spent little on a product that obviously has had a lot of time and money go into it. Unlike the xbox which is over priced for what it is.
That said the article is dumb. I'm no PS3 fan, and certainly not a fan of Sony after what they dragged their consumer base through these past couple of years, but the article is either blindly biased or intentionally omitting important facts. All companies (with the exception of Nintendo it looks like this go around of consoles) expect to lose money on the consoles, they're looking selling as many consoles as possible and lining up games for them to make sure their product is the most lasting. Sony has past success in longevity with the PS2, which blows its last gen counterparts out of the water as far as time in service, and Sony has made sure that its product will have a hardware advantage in years to come.
But spending the $300 on a ps3 is not a waste of money, because it's not simply a fur coat. If you were to just buy a ps3 for the blu-ray player you've already saved money.Flaming_Maniac wrote:
Flawed logic. Spending $10,000 on a fur coat that is normally $100,000 is still a waste of money.TheAussieReaper wrote:
This is actually good news for Sony customers. It means we spent little on a product that obviously has had a lot of time and money go into it. Unlike the xbox which is over priced for what it is.
Sony has won the BluRay Vs HD-DVD war though, and that will be huge for them. Part of the reason they won is the fact the PS3 had a blu-ray player in it. It may not have been perfect, but the movie studios still preferred one that was already quite established. It wouldn't surprise me if they didn't care about losing money on the PS3 knowing it was part of their plan to win the format war.GodFather wrote:
I hear that the Blu-Ray player of the PS3 is substantially lower quality than the actual players in the box (Primary Blu-Ray players)ebug9 wrote:
Sony = FailIf a blue ray player costs over $500 alone then why charge less than that if they plan on making a profit?
The PS3 needs better games, simple as that. I've talked to many gaming friends and we all want PS3's, but just don't see a point until we've got a hi-def TV, and until better games come out. Only games I want are MGS4 (which I've already got, just no console), possibly GTA IV, and might as well get Rock Band, too. That's 3 games. Totally not worth getting a PS3 for.
I honestly don't know what games, gonna make the PS3 "worth" the money, if MGS4 and GTA are not the one "No games" YAWN, that's sooooooo 2007.mtb0minime wrote:
The PS3 needs better games, simple as that. I've talked to many gaming friends and we all want PS3's, but just don't see a point until we've got a hi-def TV, and until better games come out. Only games I want are MGS4 (which I've already got, just no console), possibly GTA IV, and might as well get Rock Band, too. That's 3 games. Totally not worth getting a PS3 for.
it isn't all badSony's game division saw a 26% sales spike last quarter, a trend they expect will continue on the strength of strong exclusives
But I read recently that the Microsoft Console Department hasn't even begun turning a profit. And that's after two consoles. It's not as bad as it is made out.
I am confused because Microsoft is "possibly" planning to cut prices on their console in mid-july in order to compete with Sony's software sales, yet Sony is losing money on their low retail price of their PS3. In the end, I guess this is good for consumers.
Source
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