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RolStoppable said:
pizzahut451 said:
RolStoppable said:
pizzahut451 said:
Darc Requiem said:

Sony didn't start profiting from PS2 hardware until it's 3rd year on the market. They sold the system a huge loss the first two years because they didn't want to risk the Dreamcast gaining a foothold.

That's quite the nonsense you wrote there :)

Sony's gaming division posted a loss of about half a billion dollars in the fiscal year the PS2 launched. With an all around profitable PS1 and profitable PS2 software, that leaves only one culprit for the loss: PS2 hardware. A year before the PS2 launch Sony's gaming division posted a profit of more than $600 million, so losses on PS2 hardware could account for almost $1 billion in the following year as they didn't only offset all gains from the PS1 during that same year, but far exceeded it.

And yet they broke even and make almost 450M profit in the next year?  So PS2's  made up for 1 billion loss and added another half bilion in profit in only one year? Doesnt add up. I know Sony lost money on launch, but to say it was a ''huge loss'' is and overestimate. Huge loss means you lost huge chunk of all your money and wont be able to get it back for some time. If you call Sony's loss huge, how would you call Miscrosoft's on original Xbox?

$1 billion is a lot of money, it is a huge loss. What's incorrect about the post you originally quoted is the notion that Sony sold the PS2 at a huge loss for the first two years (which isn't what you bolded). The PS2 was sold at a huge loss in its first year, that's a factually correct statement.

You are confusing division profits and the the cost of the hardware versus it's MSRP. Sony's strategy usually involves selling the hardware at a loss and making up the difference in software. Every time they sold a PS2 in the first two years they lost money on the sale. In the first fiscal year they didn't sell enough software to cover those losses, in the second fiscal year they did. That doesn't change the fact that PS2 console itself was sold at a loss.