Truth finally coming out: Sony was willing to lose more money than Toshiba to win

[allargon]

This article fails that the PS3's main competitor in 2007 was the Wii and the Toshiba HD DVD players not the Xbox360. Amazing how people claimed Toshiba was losing hundreds of dollars (closer to $50) on the $200 A3's yet ignoring the hundreds of dollars Sony was losing per PS3.

Kudos to Sony--to the victor goes the spoils. :up (Too bad Panasonic, Pioneer, JVC, Warner, Disney, Fox, MPEG LA and others want their cuts, too!)

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About Ask a Pro

June 27, 2008 | by Rachel Cericola For those of you that think the PS3 is still too pricey, talk to Sony.
The company recently announced that they have lost $3.3 billion on the PlayStation 3 console since its launch.
Sony’s losses were approximately $2.15 billion in 2007, with another $1.15 billion this year. According to Gamasutra, the cost to manufacture the original incarnation of the console was too high. Sony had always hoped that software sales would cushion the blow. Despite those sales and other hardware adjustments, it will still take time before the company will recoup costs—if it does at all.
“Even if the platform is ultimately successful, it may take longer than expected to recoup the investment, resulting in a negative impact on Sony’s profitability,” reads Sony’s annual report to the Securities and Exchange Commission.
Sony originally offered the PS3 at a loss, in order to keep up with its main competitor, Microsoft’s Xbox 360.

Gaming Systems: PS3 Has Cost Sony a Boatload, by Rachel Cericola - Electronic House Product News

SONY CORPORATION

 

[diogen]

That can't be true!

Joe said the PS3 is making money!
Those are the wrong guys you are quoting! They know nothing!

On a serious note, if they break even this year, it will take them another couple years to recover those accumulated losses. Hopefully BD lives that long...

Diogen.

 

[seminole2001]

Thank You Captain Odious!

ALL game consoles lose money hand over fist at launch. Regular old school Nintendo’s in 1985 cost $600 to make and were sold at $200. Game sales make back the loss attributed to the console sale.

The main difference is that the PS3 has 2 revenue streams now (movies and games) and once Sony launches downloadable movies they will have 3. They will make their money back.

If you want to have a true comparison let's compare the loss taken from stand alone players to stand alone players.

 

[db2]

I see some confederate soldiers are still fighting the civil war...

 

[VinceT3]

Too bad games for the ps3 went the way of the psp.. straight to poo..

 

[nonrev]

Thank You Captain Odious!

ALL game consoles lose money hand over fist at launch. Regular old school Nintendo’s in 1985 cost $600 to make and were sold at $200. Game sales make back the loss attributed to the console sale.

The main difference is that the PS3 has 2 revenue streams now (movies and games) and once Sony launches downloadable movies they will have 3. They will make their money back.

If you want to have a true comparison let's compare the loss taken from stand alone players to stand alone players.

Thats a cute way to play the game.

 

[diogen]

I see some confederate soldiers are still fighting the civil war...

Then it's probably time you visit your doctor and get better glasses...
Don't get upset: wisdom and failing eye sight usually go hand in hand...

Diogen.

 

[tomcrown1]

Gosh Darn the PS3 is not making money on sale of each console well so is WII and XBOX the money is made on the games sold--these companys collect fees from folks who make games for their systems that is how they make money.

If Sony lost money on their stand alone player than the airtcle would make sense.

 

[nonrev]

You ever notice how the usual suspects stay from threads like this? Talked all that crap about Toshiba losing money now where are they??? A lot of credibility they are showing. I expected as much.

 

[meStevo]

Gosh Darn the PS3 is not making money on sale of each console well so is WII and XBOX the money is made on the games sold--these companys collect fees from folks who make games for their systems that is how they make money.

If Sony lost money on their stand alone player than the airtcle would make sense.

Nintendo has made money on every single Wii sold, and I believe the 360 unit has been profitable for some time.

 

[vurbano]

SOny won because they were willing to bleed more. I said that from day one. I also said that it is now profit taking time with overprced players and movies. I am batting a 1000 so far.

 

[tomcrown1]

Nintendo has made money on every single Wii sold, and I believe the 360 unit has been profitable for some time.

The Wii system is sold at a loss. Nintendo makes money on the games and the Wii accessory folks buy. The Wii is making Nintendo rich.

Why cant sony or Microsoft come out with a game that is close to true reality??

The Wii is the closet thing we have right now.

Well it is time to get my aggression out and fight that CNCBMNC on the WII Fight game from WII Sports.

 

[diogen]

The Wii system is sold at a loss.

Can you offer some reasonable proof to this statement?
The following quote - of almost 2 years ago! - claims the opposite.

As expensive as the Xbox 360 is and PS3 will be, the manufacturers take a loss on each unit sold. Not so with Nintendo. In an interview, Nintendo chief marketing officer Reggie Fils-Aime said that the company's next-generation console will be a money-maker from the get go. "We will make a profit on the entire Wii proposition out of the box—hardware and software," according to Fils-Aime.

Wii no loss leader, says Nintendo

And here

In the United States, Nintendo makes 5,600 yen ($49) in profit. In Europe, Nintendo makes 8,500 yen ($74) profit.
When compared to its competitors (who have yet to see profit on a single console sold), it's no wonder that Nintendo is back on top.

http://www.nintendowiifanboy.com/2007/09/17/analyst-says-wii-profits-highest-in-europe-and-u-s/

Diogen.

 

[riffjim4069]

Why cant sony or Microsoft come out with a game that is close to true reality??

Could it be because the average gamer has lost touch with reality? Perhaps if they put down their greasy controllers and wiped the cheese puff residue from their chubby little fingers, they may discover the real world actually exists outside of their darkened bedrooms.

The Wii is the closet thing we have right now.

...I had an old Atari 2600 that provided a more realistic gaming experience than the Wii.

 

[mike123abc]

The Wii proves that it is not technology, but price and fun that can sell a console. My nephews like the Wii more than the 360 and PS3 because they have Mario games that they love to play. No, the graphics are not great, but they love the games and the concepts.

Parents love to buy the wii since it is cheaper.

Microsoft and Sony tried to go the high tech route and it cost them a boat load of money. Not saying they will not eventually make it all back, but they aimed for a very different market.

 

[jayn_j]

The Wii proves that it is not technology, but price and fun that can sell a console. My nephews like the Wii more than the 360 and PS3 because they have Mario games that they love to play. No, the graphics are not great, but they love the games and the concepts.

We bought the 360 after the original XBOX was destroyed in the move. Problem was that every single game for the new console was a halo clone first or third person shooter war game. Worse, only the shooters from the original xbox worked on the 360.

I ended up buying a used xbox in order to play the dozens of gentler games the girls liked. I think Microserf really missed the boat by concentrating too hard on a single market segment. At this point, I would be more willing to dump the 360 than the original. There is just no compelling content for the majority of the family.

 

[rockymtnhigh]

The Wii proves that it is not technology, but price and fun that can sell a console. My nephews like the Wii more than the 360 and PS3 because they have Mario games that they love to play. No, the graphics are not great, but they love the games and the concepts.

Parents love to buy the wii since it is cheaper.

Microsoft and Sony tried to go the high tech route and it cost them a boat load of money. Not saying they will not eventually make it all back, but they aimed for a very different market.

Hell, even my wife is talking about getting a wii -- she is intrigued by the wii fit.

There is a wide-spread appeal to that system. I suspect we'll have one by October.

YET, my son's PS2 continues to work great; the games are excellent; he must have 50 of them, and he never seems to get bored. The PS2 will remain in our house for years to come.

 

[JoeSp]

That can't be true!

Joe said the PS3 is making money!
Those are the wrong guys you are quoting! They know nothing!

On a serious note, if they break even this year, it will take them another couple years to recover those accumulated losses. Hopefully BD lives that long...

Diogen.

And right now June 29th, Sony is pretty much breaking even on the PS3. Can you prove me wrong? I don't think so. Also, can you show where I said that Sony did not lose money on the PS3 in 2006, 2007? Sony has said all along that they are looking to 2009 to start making money on the PS3. They sold three times as many units in fiscal year 2007 as they did in fiscal year 2006 and they cut their losses by 45%. Right now, especially with the 65nm tech coming online for both the CPU and the GPU Sony is looking at possibly not only breaking even on the PS3 for the 2008 fiscal year but maybe making a little money - not much -- but not losing either. Seems the fiscal year 2008 is looking better and better for Sony.

These articles about past performance don't even take into account how much money Sony is making. Did anybody bother to follow the links and look at the balance sheet for Sony for the last 5 years. They have just about trippled their profit from last year. Either they have stopped the blood from flowing from PS3 sales or they are selling a ton of product. Maybe its both!

 

[diogen]

Oooo! Joe in damage control mood!
And even this is done as lousy as only he can do!

And right now June 29th, Sony is pretty much breaking even on the PS3.

Manufacturing-wise. Only! Just like Toshiba with their $150 HD player 9 months ago...
Read Sony report. The whole Game segment at the company is losing money.
That means that even all the profits from e.g. PS2 don't cover the losses incurred by PS3.

And I'm not even talking about their LCD business losing money, despite their claims of inventing 1080p...:haha

Can you prove me wrong?

I'm sick and tired of doing it for over a year.

Also, can you show where I said that Sony did not lose money on the PS3 in 2006, 2007?

Right here, almost 8 months ago

No, I think the 40GB is pretty close to cost at $399.

in the very threat you called me an idiot. Next time you wanna find one start with looking in the mirror...

Sony has said all along that they are looking to 2009 to start making money on the PS3.

Wow! You can read? That's a first...

And before you go back to your favs "I never claimed I'm perfect!", "I admit mistakes when I make them!",
maybe you want to think back about some of your "revelations" (have you looked in the mirror yet?):
- Sony lost the Beta vs. VHS war to Toshiba;
- Blu-ray video has more than 8-bit color;
- BD has BTB and WTW; calibration is needed to see it; :haha
- you always knew about HD bandwidth limitations;
- Toshiba players can't bitstream DTS HD-MA.
etc.

Diogen.

 

[teachsac]

- Toshiba players can't bitstream DTS HD-MA.
etc.

Diogen.

Gen 1's didn't have HDMI and then they couldn't pass more than 5.1.

S~