Wednesday, May 16th 2007

PS3 hits Sony profits

Jimmy 2004

May 16th, 2007 15:50 Discuss (21 Comments)

Sony has seen its biggest quarterly loss in four years after the release of its new PlayStation 3 console, with the company losing an overall figure of $563 million US, with the games division alone seeing a huge $1.9 billion loss. It's estimated that the company loses $240 on each PS3 console sold ($300 on the 'low-spec' model), and experts predict that this is likely to continue for the rest of the financial year. "In the game segment, there was a significant operating loss as a result of the sale of PS3 at strategic price points lower than its production cost during the introductory period," said the company. Sony isn't the only one making a loss with its consoles - Microsoft is also believed to be selling Xbox 360 consoles for a price lower than production costs, leading to the Zune and 360 losing £315 million between them.

Source: DailyTech

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21 Comments on PS3 hits Sony profits

kakazza

I guess at this part we have to thank both, Sony and M$ that they both give away hardware at a loss (!).
Can't speak for the Zune, but the consoles are great products.

Btw, this comment on dailytech cracked me up:

It bombed in Japan, not even selling out, and the population of Europe isn't even as big the the population of the US, I believe.

I wonder where he got that from ;)

GSG-9

One of these articles comes out ever week it seems...

LonGun

I believe somehow, the technology is moving a lil faster than the people's demand. I mean, it costs Sony and Microsoft more than the price they sale, which mean they lose money on every single system sold. That proves that the technology they put in those systems are consider latest technology, and there isnt' anything newer than that at that time until now, that's why it costs them. I also believe they can make much more powerful, significiant products, but then decided not to because most of us cannot afford and they'll lose money saling those. So they got to wait for a new next generation technology invented in order to release and sale older one since it doesn't cost them and us that much.

Jimmy 2004

LonGunI believe somehow, the technology is moving a lil faster than the people's demand. I mean, it costs Sony and Microsoft more than the price they sale, which mean they lose money on every single system sold. That proves that the technology they put in those systems are consider latest technology, and there isnt' anything newer than that at that time until now, that's why it costs them. I also believe they can make much more powerful, significiant products, but then decided not to because most of us cannot afford and they'll lose money saling those. So they got to wait for a new next generation technology invented in order to release and sale older one since it doesn't cost them and us that much.

And meanwhile Nintendo should be setting a higher price (from a maximum profits perspective) but still sticks to £180 in the UK. Console manufacturers just have an interesting approach to the market, taking a wider view than the sale of the console itself. For example, M$ is looking to make its profits from game licenses and peripherals.

kwchang007

Jimmy 2004And meanwhile Nintendo should be setting a higher price (from a maximum profits perspective) but still sticks to £180 in the UK. Console manufacturers just have an interesting approach to the market, taking a wider view than the sale of the console itself. For example, M$ is looking to make its profits from game licenses and peripherals.

yeah, most game companies don't make their money on the consoles, but rather the games.

Dark Ride

LonGunI believe somehow, the technology is moving a lil faster than the people's demand. I mean, it costs Sony and Microsoft more than the price they sale, which mean they lose money on every single system sold. That proves that the technology they put in those systems are consider latest technology, and there isnt' anything newer than that at that time until now, that's why it costs them. I also believe they can make much more powerful, significiant products, but then decided not to because most of us cannot afford and they'll lose money saling those. So they got to wait for a new next generation technology invented in order to release and sale older one since it doesn't cost them and us that much.

If I'm not mistaken the last generation of consoles was sold at a loss too and Sony, MS and Nintendo did pretty well in the long run by selling many games for those consoles nonetheless . Nintendo probably a bit less then Sony and MS tho, but they still did well; as in: they didn't go bankrupt. Of course the GameBoy Advance and Nintendo DS sales did help them to stay a major player in the business even though the GameCube didn't do as well as the competitors' consoles.

warup89

Man i hope Play station doesnt fall down like Sega did :shadedshu

jocksteeluk

these loses are all in the name of making the Blu-ray the established next gen optical disk media and down to the costs still the are not even guaranteed to succeed, i dont think Sony will try and force a new format onto the game fans again when it comes to the ps4

kwchang007

jocksteelukthese loses are all in the name of making the Blu-ray the established next gen optical disk media and down to the costs still the are not even guaranteed to succeed, i dont think Sony will try and force a new format onto the game fans again when it comes to the ps4

hopefully not. if they can pull of something like a quad layer blu ray disk, i don't think there'll be a change for another 10 years...unless we double resolution and how many fps each movie has before 10 years. and i don't see another hd standard coming out that soon, it's been a long time that color tv has been aroudn.

#10

-1nf1n1ty-

warup89Man i hope Play station doesnt fall down like Sega did :shadedshu

damn that would suck.........I miss sega

#11

LonGun

kwchang007hopefully not. if they can pull of something like a quad layer blu ray disk, i don't think there'll be a change for another 10 years...unless we double resolution and how many fps each movie has before 10 years. and i don't see another hd standard coming out that soon, it's been a long time that color tv has been aroudn.

without something like blu-ray, how is PS3 going to support game with that kind of graphics in its games? and without cutting edge graphics in its game (and Xbox360 HD-DVD discs) how are the game developers going to get the large amount of discs from to program "next gen" games? So if that's the case, Sony and Microsoft had no choice but to include those (Blu-ray, HD-DVD) technologies in their "next gen" console. What type of media does the Wii console use?

#12

BXtreme

LonGunwithout something like blu-ray, how is PS3 going to support game with that kind of graphics in its games? and without cutting edge graphics in its game (and Xbox360 HD-DVD discs) how are the game developers going to get the large amount of discs from to program "next gen" games? So if that's the case, Sony and Microsoft had no choice but to include those (Blu-ray, HD-DVD) technologies in their "next gen" console. What type of media does the Wii console use?

DVD/CD :laugh:

#13

LonGun

BXtremeDVD/CD :laugh:

hehehe... I wonder how can Wii came along the other "two's" next gen console releases.. I personally did not heard or read Nitendo mentioned that word "next generation" too many time.. hehe but hey! they're the one that collecting money from the other twos :) Life is not fair, isn't it?

#14

BXtreme

LonGunhehehe... I wonder how can Wii came along the other "two's" next gen console releases.. I personally did not heard or read Nitendo mentioned that word "next generation" too many time.. hehe but hey! they're the one that collecting money from the other twos :) Life is not fair, isn't it?

it became one of the 'next gen' due to it's intuitive controller and it's control scheme. The controller, say in a baseball game, becomes your baseball bat and pretty realistically acts nearly like one, giving a true virtual gaming experience. It's good for many genres but just not fps...
it's seems like a small kitty in front of the powerful mice.
meh, screw comparing with Pc, as a console controller it :rockout: Also the Wireless connectivity is also a good addition imo. There are more features but I don't remember them :p i.e until I myself get my hands on it :D

AND to PS3, LOWER THE prices or die!!! (no offense here).

#15

Jimmy 2004

Dark RideIf I'm not mistaken the last generation of consoles was sold at a loss too and Sony, MS and Nintendo did pretty well in the long run by selling many games for those consoles nonetheless . Nintendo probably a bit less then Sony and MS tho, but they still did well; as in: they didn't go bankrupt. Of course the GameBoy Advance and Nintendo DS sales did help them to stay a major player in the business even though the GameCube didn't do as well as the competitors' consoles.

Well... Sony (possibly Nintendo too) did well, but M$ is yet to make a profit in its gaming division IIRC. Even the original Xbox lost money throughout its life, but M$ is hoping for more luck with the 360.

#16

FreedomEclipse

~Technological Technocrat~

lol looks like sony's 40% E.U price fixing couldnt save them this time...

(it was also the 'cut down' versions they were charging @ +40%)

f**k'em slanderous dogs, I hardly know any1 who has a PS3, most have Wii or 360

just be happy that you non-E.U folks dont have to put up with all this 'commercial' garbage. over charging & price fixing seems to run strife over here despite the U.K being the home of Office Of Fair Trading & such establishments such as watchdogs & OFCOM's etc.....

crimes are committed but nobody will stand up against whats happening around them

#17

kakazza

LonGunwithout something like blu-ray, how is PS3 going to support game with that kind of graphics in its games? and without cutting edge graphics in its game (and Xbox360 HD-DVD discs) how are the game developers going to get the large amount of discs from to program "next gen" games? So if that's the case, Sony and Microsoft had no choice but to include those (Blu-ray, HD-DVD) technologies in their "next gen" console. What type of media does the Wii console use?

IIRC, neither BlueRay nor HD-DVD will be used for games. At least I know that the HD-DVD diskdrive for the X360 will not, just movies.

#18

Jimmy 2004

kakazzaIIRC, neither BlueRay nor HD-DVD will be used for games. At least I know that the HD-DVD diskdrive for the X360 will not, just movies.

I think Blu-ray might be being used for games on the 360 - I remember reading somewhere about Rockstar having to cut down the 360 version of GTA4 because they couldn't fit it on a DVD, whilst the PS3 didn't have that problem. But M$ has definitely said HD-DVD won't be for games.

Edit: looks like Sony is already using Blu-ray for some games.

#19

WarEagleAU

Bird of Prey

for now, but when the price of production on blu ray goes down, it wont be losing money, it will be gaining. Same for the 360. With Ati now out with its new video cards, it shouldnt be long before 360 is making money.

#20

TSX420J

BXtremeDVD/CD :laugh:

The 360 is only going to use dvd for games. No hd-dvd games will be made.

#21

BXtreme

TSX420JThe 360 is only going to use dvd for games. No hd-dvd games will be made.

nice, all hail 360 and Wii lol j/k :p

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PS3 hits Sony profits

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