Sony has lost over $3 billion on the PS3

JestorRodo

From : http://videogames.yahoo.com/feature/sony-has-lost-over-3-billion-on-the-ps3/1223467

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 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.  ENDQUOTE

 

Not only is it the 3rd place in the Nexgen consoles and the new fertile ground for SOE for MMOS , its in debt .  I would just sale it as a Blu Ray player that also plays games

Kiriji

Only good thing about that console is the blue-ray player and MSG4.

observer

I've always loved the console wars.  Nintendo will always be.

Majinash

Wasn't this the same with the first Xbox?  its a whole lot more complex than just console sales.

 

I just wish I could still keep up with consoles, but I had to choose PC first.

DragonMyth88

which ever comes out first wins ps2 won to xbox, xbox 360 wins( more exclusives) to ps3, and wii wins all over there asses the most exclusives ever........

Precusor

interesting.

Adamantine

All consoles are artifically made cheaper. They are all expensive PCs with high performance graphics hardware. The only reason why this makes sense is because, if you create a game for that platform, you have to pay the owner of the platform - i.e. companies who sell console games have to pay the console creator.

Thats why its stupid to believe that consoles are cheaper than PCs. They arent. In reality, all you save in comparison to a normal PC is the harddisk.

Otherwise, consoles are artificially crippled. They are no open plattform, that means, nobody can just create a console thats compatible to XBox, Playstation etc. Unlike the IBMPC where you CAN and a lot of companies do - in fact, hardly anyone still buys his PC from IBM.

In one sentence: Consoles are crap.

Airspell

Originally posted by DragonMyth88


which ever comes out first wins ps2 won to xbox, xbox 360 wins( more exclusives) to ps3, and wii wins all over there asses the most exclusives ever........

 

You fail, Dreamcast came out before ps2. 

Wii wins on price and gimmicks. It's a party console and not for serious gaming. It capitalized on the fact the competition was very expensive.  Of course it has more exclusives, many of its exclusive games don't cost 1/10th as much to develop as an x-box or ps3 exclusive. 

  X-box execs are slow to learn. I'm sure by the 3rd try they will really try to win. First x-box was all about the US market.  2nd made a so so attempt at japan. Maybe 3rd will really break in

 PS3 had 2 major flaws, price and number of games.  People were basically buying it to play 1 or 2 games, period.  Now as the title numbers begin to grow and price begins to lower somewhat it is starting to catch its stride.  GTA and MGS hype helps too I'm sure.

The reasons are simple, Wii made a populist console that almost anyone could enjoy and really tapped into the mass market like never before. Lesser reason could be that there were droves of Nintendo fans who after the N64 console disapointment yearned for something great from them again.

observer

Dreamcast ftw!  It was a sad day when they cancelled support for it too. 

Sony, Nintendo, Microsoft will pull through again.  Consoles have a short life span anyway.  People were saying consoles were dead since forever.  They also said the same thing about Arcades, but they're still surviving. 

Urrelles

Originally posted by Adamantine


All consoles are artifically made cheaper. They are all expensive PCs with high performance graphics hardware. The only reason why this makes sense is because, if you create a game for that platform, you have to pay the owner of the platform - i.e. companies who sell console games have to pay the console creator.
Thats why its stupid to believe that consoles are cheaper than PCs. They arent. In reality, all you save in comparison to a normal PC is the harddisk.
Otherwise, consoles are artificially crippled. They are no open plattform, that means, nobody can just create a console thats compatible to XBox, Playstation etc. Unlike the IBMPC where you CAN and a lot of companies do - in fact, hardly anyone still buys his PC from IBM.
In one sentence: Consoles are crap.

I mostly disagree.  I do agree that consoles are low budget computers with tons of fancy graphics hardware inside. 

To make a really damn good gaming PC, it still cost quite a bit more than it does to simply by an X-box 360 or PS3.  I'll use 2 games as examples: Bioshock and Age of Conan.

My current PC cost about 600 - 700 to piece together through mostly New Egg shopping.  This does not include the monitor, keyboar, and mouse.  This computer can play Bioshock with max graphics quite nicely.  However the game still crashes at random.  My computer still glitches on GUI graphics at random which could also cause a crash.  Now I could spend 700 dollars and have an X-Box 360 with all the essential accessories.  Bioshock will run flawlessly on it too.

Age of Conan, literally requires a 1200 - 2000 dollar computer (depending on what kind of frugal shopping you are capable of.  The average consumer (who konws little abotu PCs) would spend 2000 to make a gaming computer able to run Age of Conan.  My $700 pc chugs and crashes all the time playing that game; even on low settings.  In about 6 months this game will release for X-Box 360.  for 700 bucks this game will run perfectly on X-box, with no compatibility issues.

Lord forbid we talk about a Nintendo Wii vs a PC.

Lets look back at the year 2000.  The average Dell computer cost about 800 - 1200 bucks.  Even to this day a Dell cost that same price.  A playstaiton 2 cost $129.  The graphics on the PC were slightly better than the consoles at the time.  The PS2 wins though due to ridiculously low price.

If sony didn't put that damn Blue Ray in the PS3, it would probabl only cost about 450 - 500 bucks.

JustBe

What does this have to do with mmorpgs?

JestorRodo

Originally posted by JustBe


What does this have to do with mmorpgs?

 

  Gee nobody told you , sort of mentioned it in my OP - SOE is greared up to dual platform The Agency and Free Realms. SOE  parent company is Sony Computer Entertaiment of Americe( the manudacting distributors of the PS3 in the US) as of April Fools Day.

(Dang doesn't anyone watch my Rodo Report? sheesh!)

 

 

Anzie

who told them to put stupid blue-ray when they coulda put a better cpu/gpu imo..

 

edit: wrong section, there is a hardware section for this.

Apocamentus

Quite a cool site, not sure how reliable it is though...

 

http://nexgenwars.com/

Ozmodan

It is fairly typical in this industry to lose money on the hardware to sell the software.  Do you think Microsoft is making money on the xbox-360?  I highly doubt they are even now.   Same for the Nintendo Wii. 

Software is where the money is and a propriatary console guarentees you income as long as your software is decent..

nomadian

I can see why done it to secure a market position and it's worked they are ahead of Xbox360 in sales, but how will they make the money back- all from the software aspect?

Flyte27

I can definately see consoles dieing at some point.  If a console starts to cost as much as a PC to make who would buy one when they can just go and get a PC for the same price and it does a lot more for you then just play games?

gillvane1

Add an Xbox controller to the PC, and a Wii controller.

Get rid of the licensing requirements that consoles have, and let developers make any game they want for the PC, with mouse and keyboard, Xbox controller, or Wii Controller, but you don't have to pay any fees to Microsoft or Nintendo or Playstation to sell your game.

That's where it should go.

JestorRodo

 PS3 owners should rally to the crisis! 

There is about 13.8 Million of you if you divide that into the 3.3 billion that comes out to $239.00 rounded each. Please send a check for that amount to Sony and do it today.

 

 

SomeOldBloke

It's not just this industry where the "loss leader" concept is used. I work in Cellular Comm's and I know that in South California one of the operators swapped out one vendors equipment for another and the new vendor installed and ''free'" 3g base station next to the 2g oen they were swapping out as they new it would pay for itself with software upgrades and maintenance agreements...

Also, I had a summer job for a small software company who's main product was a databse that maintained a lsit of 'blood' that was in stock and information about it's donor, they practically gave it away as they would make on SW updates and maintenance agreements.

Draccan

Sony don't care.. they did this to win the bluray war vs. hd-dvd. Now they will start to reap the real profits on bluray film sale.

Hrica

Great Thread Jestor!!!

Interesting too.

Not sure about many people, but if you live here in the US, you are feeling great pain at the pump, at the grocery store,  from you health insurance company, Everyone is feeling it due to ression and $150ish oil

Back to subject. Can my tax stimulas check get me a PS3 with controllers and games....Nope

Can it get me a Xbox 360, possible but to get everything, not probabal

Can it get me a Wii? nope can't find any

Can it build me a sweet rig for WAR......yes!!!!!!!!!!!!!!!!!!

DeaconX

That is a pretty hefty loss there - I wonder what that means for the future of Sony consoles.  Apparently they aren't looking to replace the PS3 for at least a decade and hope to outshine the XBOX 360 over that period somehow.

Personally, I'll stick to PC's.  Anything less is just that

JestorRodo

Originally posted by Hrica



Great Thread Jestor!!!
Interesting too.
Not sure about many people, but if you live here in the US, you are feeling great at the pump, at the grocery store,  from you health insurance company, Everyone is feeling it due to ression and $150ish oil
Back to subject. Can my tax stimulas check get me a PS3 with controllers and games....Nope
Can it get me a Xbox 360, possible but to get everything, not probabal
Can it get me a Wii? nope can't find any
Can it build me a sweet rig for WAR......yes!!!!!!!!!!!!!!!!!!

   Thanks Hrica, building your own rig for Warhammer online is a great move. 

 Now SOE is still producing Dual Platform -  both PC and PS3  but as I and most know is that the Agency will not cross platform but that would be great if they did because then you could talk smack or communicate with your team on the PC and the PS3 players would just be there pissed off and pushing buttons.

UOvet

If you knew anything about consoles you would know they usually lose money on the systems. The headsets, HDD, and all the other accessories you all buy is what makes them their money, and the games.

MattCatt

Originally posted by Flyte27


I can definately see consoles dieing at some point.  If a console starts to cost as much as a PC to make who would buy one when they can just go and get a PC for the same price and it does a lot more for you then just play games?

Exclusives. Also, there is some satisfaction in popping a disc into the drive and being able to play the game without any installation, activation, and registration.

Originally posted by gillvane1


Add an Xbox controller to the PC, and a Wii controller.
Get rid of the licensing requirements that consoles have, and let developers make any game they want for the PC, with mouse and keyboard, Xbox controller, or Wii Controller, but you don't have to pay any fees to Microsoft or Nintendo or Playstation to sell your game.
That's where it should go.

Without licensing fees, console manufacturers would have no choice but to charge much more for their equipment, since they wouldn't be able to make up for losses through software.