Sethos Posted May 15, 2008 Share Posted May 15, 2008 Sony losing $260 per PS3? Thursday 15-May-2008 1:36 PM Sony could be losing a significantly larger amount of money per PS3 shipped than it's letting on?While Sony's recently-announced financial results showed that the company reduced its PlayStation division losses by over 100 billion yen last fiscal year, a factor it attributed largely to falling PS3 production costs, Jack Schofield at the Guardian speculates that the platform holder may be losing double the $130 per console shipped that its internal figures suggest. "On Sony's own figures, the games division made a loss of ..." Read the rest at CVG Link to comment Share on other sites More sharing options...
Boz Posted May 15, 2008 Share Posted May 15, 2008 Not a huge shocker.. everybody was saying that it was impossible they were breaking even and it was obvious they were packing their revenue numbers from sales of PSP and PS2 always to show PS3 in better light. Link to comment Share on other sites More sharing options...
Matrix XII Posted May 15, 2008 Share Posted May 15, 2008 Makes sense. I knew they weren't breaking even or profiting. Link to comment Share on other sites More sharing options...
+Gary7 Subscriber² Posted May 15, 2008 Subscriber² Share Posted May 15, 2008 They make up for it in other ways. Link to comment Share on other sites More sharing options...
popisdead uk Posted May 15, 2008 Share Posted May 15, 2008 Its no big deal. Its not coming out of anybody's personal bank account Link to comment Share on other sites More sharing options...
soniqstylz Posted May 15, 2008 Share Posted May 15, 2008 I thought that the 40GB was still losing money, but the 80 GB was nearly breaking even... Link to comment Share on other sites More sharing options...
Xero Posted May 16, 2008 Share Posted May 16, 2008 With the longevity of the PS2 I don't think taking losses now is going to be a big deal in the big picture. Sony wanted to put the best hardware into its console and its paying for it (literally) Microsoft didn't, they wanted a cheaper console and to make money, and as much as I don't like them, they certainly are achieving what they set out to do. Although Nintendo really owned them in both of those areas. Link to comment Share on other sites More sharing options...
Corris Veteran Posted May 16, 2008 Veteran Share Posted May 16, 2008 Wouldn't the loss be counting R&D, advertising, etc. for games and not just what they lose on a console? Link to comment Share on other sites More sharing options...
+Mystic MVC Posted May 16, 2008 MVC Share Posted May 16, 2008 With the longevity of the PS2 I don't think taking losses now is going to be a big deal in the big picture. Sony wanted to put the best hardware into its console and its paying for it (literally) Microsoft didn't, they wanted a cheaper console and to make money, and as much as I don't like them, they certainly are achieving what they set out to do. Although Nintendo really owned them in both of those areas. I thought the consoles were nearly on par, hardware wise, each having advantages over the other in different areas. Aren't they? I think the fact that costs Sony the most money was the Blu-Ray drive obviously. They will already make up for that in the future which will solidify millions (maybe billions :p) for them. Link to comment Share on other sites More sharing options...
CdCViRus Posted May 16, 2008 Share Posted May 16, 2008 That's the only reason I would buy a PS3, to help Sony go bankrupt faster. Link to comment Share on other sites More sharing options...
soniqstylz Posted May 16, 2008 Share Posted May 16, 2008 I thought the consoles were nearly on par, hardware wise, each having advantages over the other in different areas. Aren't they?I think the fact that costs Sony the most money was the Blu-Ray drive obviously. They will already make up for that in the future which will solidify millions (maybe billions :p) for them. I think he's talking about the hardware used, cheap parts, not the raw horsepower of either console -- referring to disc drives that scratch DVD's, or the RRoD. Link to comment Share on other sites More sharing options...
micro Posted May 16, 2008 Share Posted May 16, 2008 The R and D that went into the cell processor took a huge chunk of cash. That coupled with the initial poor fabs of the cell caused them to go into the red ink. The choice for bluray was a big factor for losing money per console sold initially, but as bluray becomes cheaper sony will lose less per console and might even break even with smaller fabs of cell in the future. The xbox360 used a dvd drive and ibm processors. Im not saying that the choice of the dvd drive and ibm processors didnt work out or by any means makes microsofts choice bad. I just am saying its much cheaper to choose existing technology. Link to comment Share on other sites More sharing options...
soniqstylz Posted May 16, 2008 Share Posted May 16, 2008 The R and D that went into the cell processor took a huge chunk of cash. That coupled with the initial poor fabs of the cell caused them to go into the red ink. The choice for bluray was a big factor for losing money per console sold initially, but as bluray becomes cheaper sony will lose less per console and might even break even with smaller fabs of cell in the future. The xbox360 used a dvd drive and ibm processors. Im not saying that the choice of the dvd drive and ibm processors didnt work out or by any means makes microsofts choice bad. I just am saying its much cheaper to choose existing technology. A big chunk of R&D for both were picked up by other companies -- Toshiba and IBM for the Cell, and Philips for the Blu-ray. Not only that, but they sold the Cell processing plants to Toshiba, and with the death of HD-DVD, they'll recoup in royalties from Blu-ray discs (both movie and game). Link to comment Share on other sites More sharing options...
+Mystic MVC Posted May 16, 2008 MVC Share Posted May 16, 2008 I think he's talking about the hardware used, cheap parts, not the raw horsepower of either console -- referring to disc drives that scratch DVD's, or the RRoD. Well it seemed like a cheap attempt at a fight, so I hope what you said is what he meant instead. :D Link to comment Share on other sites More sharing options...
DrunknMunky Veteran Posted May 16, 2008 Veteran Share Posted May 16, 2008 Where's AB and his "blu ray & cell prices falling" malarky now? :p Does this surprise anyone really? Especially with all the price cuts they are making, they definitely aren't out of the red by a long shot. Link to comment Share on other sites More sharing options...
popisdead uk Posted May 16, 2008 Share Posted May 16, 2008 Where's AB and his "blu ray & cell prices falling" malarky now? :pDoes this surprise anyone really? Especially with all the price cuts they are making, they definitely aren't out of the red by a long shot. I think they have it under control. I don't think they need our concern. Link to comment Share on other sites More sharing options...
bobbytomorow Posted May 16, 2008 Share Posted May 16, 2008 Its completely normal for companies to take losses on hardware and recoup them later in software. it has alwas been this way. This is nothing compared to how much MS has lost so far on the xbox\360 brand, I know that it is over $6 billion since the introduction of the xbox brand, and then their warranty extension they did with the 360 was said to cost them at lest a $1 billion. While the Playstation brand has been keeping Sony afloat for the past decade the xbox brand has been bleeding money for MS for start to present. Link to comment Share on other sites More sharing options...
DrunknMunky Veteran Posted May 16, 2008 Veteran Share Posted May 16, 2008 Its completely normal for companies to take losses on hardware and recoup them later in software. it has alwas been this way. This is nothing compared to how much MS has lost so far on the xbox\360 brand, I know that it is over $6 billion since the introduction of the xbox brand, and then their warranty extension they did with the 360 was said to cost them at lest a $1 billion. While the Playstation brand has been keeping Sony afloat for the past decade the xbox brand has been bleeding money for MS for start to present. The Xbox didn't make MS any money, but then it was their first venture into console gaming in an already crowded market. To make a second console was a surprise at all tbh. As for the 360, it has made money for quite some time now. Although I'm not sure what their situation will be these days with the 3yr warranty. With revenue coming from XBL (and all it's content) and a huge software attach rate, I don't think they have much to worry about :) Link to comment Share on other sites More sharing options...
HawkMan Posted May 16, 2008 Share Posted May 16, 2008 The 360 was making money per lost console from jut before the first year was over roughly. the 3 ear warranty set them back a bit, but they where still making money on hardware sales by that time. I also don't think they ever had losses of the kind the PS3 has right now, even if it is "only" 130. and they certainly where never close to the huge per console losses the PS3 had in it's first 6+ months. yeah sure the money they make up from the PS2 helps them this time, but this was the first generation where neither of the next gen consoles could make money on their launch, or rather where the initial losses would be so high, next generation will be even worse as they'll require even more advanced technology to stay ahead and they can't charge what the components cost or noone will buy. the question is, while Sony is able to absorb the initial PS3 losses this round, can they do the same when it's time for the PS4 and even higher losses per console is likely. of course much of the losses this round is due to bad tech solutions and decision on theirpart, like blu-ray where they have to buy the laser from a third party. with low production speed and high premiums, The Cell developement and ultimate failure at what it was supposed to do, the hack solution of adding on a graphics card in the 11th hour. Next round they're going to have to design and plan a lot smarter, cause Sony is barely affording their debt this time around, if they do this again, they won't be able to take the hit. Link to comment Share on other sites More sharing options...
DrunknMunky Veteran Posted May 17, 2008 Veteran Share Posted May 17, 2008 The 360 was making money per lost console from jut before the first year was over roughly. the 3 ear warranty set them back a bit, but they where still making money on hardware sales by that time. I also don't think they ever had losses of the kind the PS3 has right now, even if it is "only" 130. and they certainly where never close to the huge per console losses the PS3 had in it's first 6+ months. yeah sure the money they make up from the PS2 helps them this time, but this was the first generation where neither of the next gen consoles could make money on their launch, or rather where the initial losses would be so high, next generation will be even worse as they'll require even more advanced technology to stay ahead and they can't charge what the components cost or noone will buy. the question is, while Sony is able to absorb the initial PS3 losses this round, can they do the same when it's time for the PS4 and even higher losses per console is likely. of course much of the losses this round is due to bad tech solutions and decision on theirpart, like blu-ray where they have to buy the laser from a third party. with low production speed and high premiums, The Cell developement and ultimate failure at what it was supposed to do, the hack solution of adding on a graphics card in the 11th hour. Next round they're going to have to design and plan a lot smarter, cause Sony is barely affording their debt this time around, if they do this again, they won't be able to take the hit. Couldn't have said it better (Y) Link to comment Share on other sites More sharing options...
CUBBYJR2005 Posted May 17, 2008 Share Posted May 17, 2008 yeah heard about it but wii still doing good even though of supply demand still. Link to comment Share on other sites More sharing options...
Tech Star Posted May 17, 2008 Share Posted May 17, 2008 There was a news article last year that stated that Sony lost $0 on all PS3's made and sold last year. So wtf? Link to comment Share on other sites More sharing options...
gunnerhkjp Posted May 17, 2008 Share Posted May 17, 2008 The 360 was making money per lost console from jut before the first year was over roughly. the 3 ear warranty set them back a bit, but they where still making money on hardware sales by that time. Actually, because they wrote off a billion dollars to account for RROD returns, they will not actually "make" money on 360 hardware for a long time. Because it was a one time write off, it may seem like the 360 makes money from the next fiscal year, but the billion dollar damage is still there. Link to comment Share on other sites More sharing options...
HawkMan Posted May 17, 2008 Share Posted May 17, 2008 not actually true but whatever. remember the writeoff is the MAX they could ever get if every 360 broke. and it doesn't fully take into account that most of europe has very good consumer protection allready. so me for example any production fault with the 360 I would get repaired in warranty in the 2-3 years in any case, but because it's not a short life item, I think the xbox actually falls under the 5 year mandatory factory faults "warranty" all items sold here have to adhere to. So in large parts of europe extra costs for repairs hae to allready be calculated into the business, wich is also why stuff often costs more in europe, and not just the ~25% VAT. Fact is they're far fro the worst case scenario they planned for, and in europe the warranty was mostly allready covered the economics and icnreased prices. and you are severly under estimating the mony they are making on the 360's. Link to comment Share on other sites More sharing options...
popisdead uk Posted May 17, 2008 Share Posted May 17, 2008 Does it really matter? I don't think it does Link to comment Share on other sites More sharing options...
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