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Forums - Sales Discussion - Do you think Sony will ever make a net profit from the PS3?

Rakusa, even PS3 fanboys could see you don't have a clue what you are talking about...jesus...I feel for you NJ5, you really tried hard, this guy just doesn't get it. He probably never will, his blind faith for the PS3 won't allow him believe factual evidence that completely destroys his made-up rants. I suggest you learn what you are talking about, because the majority of people who frequent this forum do, so most people aren't going to take you seriously here, where as I am sure on other forums you could just spew BS, while coming across as knowing what you are talking about...they just didn't know better there.



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I think a more important question is raised by the topic , does Sony really need to make profit of the PS3 ? considering the huge contribution it'll have to the rest of Sony's product portfolio and Blu-Ray , i'd see breaking even as a huge success.




If that was the case, they should have made specs closer to that of the 360, have $100 cheaper price launch, and probably be in a much better position now, with the same impact (if not greater) on Sony's blu-ray industry.

Of course hind sight is 20-20.

I am more concerned with what Sony is going to do with the PS3's sequal. Either it is going to be very expensive again, or it is going to need to be launched very late...



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CrashMan said:
Smidlee said:
Sorrow880 said:
Once again though...it is hard to measure the true losses. If blu-ray is very successful in the future, that will be because of the ps3. However, that won't be included in the ps3's #'s. Also, how much does the ps3 help Sony's other departments? e.g. HD tv's, etc.?
As I said, it's the only reason I bought my Sony HD tv. W/O my ps3, I wouldn't have bothered going HD or even getting a Sony if I did (probably would have gotten a Samsung or Toshiba)

Good point.

Isn't the 3 billion losses from both the PS3 and the Blu-ray combine? Obviously PS3 is designed to be used to play HD movies and game since from what I've read PS3 have of the best Blu-ray player unlike PS2 average DVD player.

Also according to many Wii fans here the PS3 will have a long life of 20-50 years. If people really don't care about HD then PS3 (xbox360) is all you would ever need to run games in 480p (more like overkill). So there would be no need for a next generation PS. (All it needed is a different controller every five years.)

The thing is Nintendo is all about games and nothing else (many sees this as a good point) but Sony isn't all about games but also movies, HDTV , Blu-ray,etc.

 


Not that I dispute this line of thinking, but I was wondering if any one had (or had a link to) some statistics as to the percentage of blu-ray hardware sales by model. I looked around but couldn't find any.

@Bod: Well, you DO have to take in to account server costs and the like, but even if that is 40 mil/year (way to high) thats still 200 mil in profit.


 I am taking that into account. Both Sony and Microsoft have to pay for servers, so that's a wash. What I'm saying is: Microsoft and Sony make (and spend) money in the exact same ways in regards to the internet; both have servers they need to pay for, both make money through DLC, both provide demoes to push software. There is exactly one financial thing that XBL does than PSN does not, and that is cost 4 dollars a month to simply exist.

So if we're going to strike 40 million dollars off of Microsoft, we need to strike 40 million off of Sony, too.  



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Bodhesatva said:
 

I am taking that into account. Both Sony and Microsoft have to pay for servers, so that's a wash. What I'm saying is: Microsoft and Sony make (and spend) money in the exact same ways in regards to the internet; both have servers they need to pay for, both make money through DLC, both provide demoes to push software. There is exactly one financial thing that XBL does than PSN does not, and that is cost 4 dollars a month to simply exist.

So if we're going to strike 40 million dollars off of Microsoft, we need to strike 40 million off of Sony, too.


Well, if we want to get that specific it should be said that Microsoft probably needs more servers than Sony, for two reasons:

1- Larger userbase

2- MS hosts the servers for every single 360 game, unlike Sony which leaves it to third parties to host their own servers for their games. I may be wrong on this but I think it's correct.

However, Microsoft has quite a lot of experience in servers, and they can likely use datacenters more efficiently since they have servers for many things other than gaming. If I had to guess, I'd say that Xbox Live should have a quite good profit margin.

Of course, it'd be too hard to do a proper analysis of this without more knowledge of Sony and MS's operations, so let's just say that Microsoft surely makes more money from their online offerings than Sony does, and that this gap will surely get larger as the PS3/360 userbases get larger as you said in another post.

 



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Is no-one else having a problem with this page?... I have to go into rich text reply to read the posts.... though I think we are nearly on page 3, perhaps it will fix itself.





Of course hind sight is 20-20.

I am more concerned with what Sony is going to do with the PS3's sequal. Either it is going to be very expensive again, or it is going to need to be launched very late...

That true. It pretty obvious now $600 is too much (maybe even $500) for a console.

As far as PS3 sequal if HD really doesn't sell and most people still have SD TV later on then why do you need a sequal the start with? Do you really need anything more powerful to run games in 480p? As of now it's the Wii and it's game that's on top. If PS3 is profitable it will clearly be in the long run.



rukusa said:
Lol, kinda ironic that I clearly remember the same kind of thread about the 360 about a year ago.

Of course it will, if the 360 is proof of anything, then it takes time for a newly arrived console to gain profit.

Its awkward that people are questioning it about the PS3.

 360 has not earned a net profit yet



 

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This thread is too long to address all the different arguments so here's my two cents:

PS3 hardware & software, clearly will never earn a net profit. The already incurred loss is simply too great. PS3 would have to outsell PS2 and it's software would have to substantially outsells PS2's for this to happen. And after one year plus it's clear the PS3 will never reach PS2 sales.

Now if you include blu-ray then it really gets confusing since we really have no idea how much they make off that. Also you have to consider the sales of blu-ray players and even HD tvs that might sell because of blu-ray becoming the standard. All of which is impossible to quantify even for Sony.

Plus John Lucas is right, Sony put themselves into a hugely expensive fight with MS by deciding to aim the PS3 at the exact same market while ignoring Nintendo and the larger audience share. This fight will be a blood bath for them both. Both systems will see quarterly profits in time, but neither will earn a net profit this generation. MS might break even thanks to larger revenue streams, but it'll still be billions in the hole from the original xbox.

One thing I'm feel very confident about. You're seeing the end of the powerful, subsidized, loss leading console. If and when Sony & MS put their next gen system out, they'll ape Nintendo's highly profitable business model. Nintendo has never lost money, not even with the worse selling system. Why should Sony & MS continue to slowly bleed to death? Just so core gamers can be happy? I don't think so.



 

Individual PS3 software, of course, some have, some won't.

PS3 hardware profit on the final box sold, probably.  On the other hand,  note in the table:

Sony Annual Reports Game Operating Income
YearEnd Mar 31 Yen(B)

2006 8.7
2005 43.2
2004 67.6
2003 112.7

Either PS2 operating income peaked in 2003, and its profits started declining.  Or 2004 the cost of developing the PS3 was already so large, it knocked down the net game division net operating income even with PS2's income staying the same or growing.  PS3 losses are *much* bigger than the losses reported for 2007.  There is probably 100-200Yen(B) of PS3 losses masked by the PS2 in the previous years and 2007 itself.  

For the PS3 hardware to be profitable LTD at the end, no way.

Including software and other game related income, very doubtful.

Including Blu-Ray royalities, possibly if it becomes a long term standard.  But Blu-Ray income will not go to the Gaming Division.  That is not one of their items to 'sell'.

 



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