By using this site, you agree to our Privacy Policy and our Terms of Use. Close

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

Alby_da_Wolf on 08 January 2008
FishyJoe said:
Troll_Monster said:
Of course Sony can make the PS3 profitable, they are hardware manufacturers and know how to bring down the cost, it's all a matter of time, hell for all we know Sony could have already broken even with the PS3.

Except you're ignoring the fact that Kaz Hirai just said yesterday that they were hopeful but non-commital about making a profit with the PS3 somtime in the NEXT fiscal year.


Perhaps they already broke even in EU, but they don't say it to avoid stressing the higher price they charge here.

In Wikipedia's article about PS3 there are some details on recent savings in production costs.

 

Edit:

Calculating also royalties on 10 games sold for each console and admitting that after 15 millions units they stop losing money on HW, start selling much more games than before thanks to a wider offer and also that at that point losses are $ 3 billions, they need to sell roughly 45-50 millions consoles to break even, while MS needs "only" to sell 35-40 millions XBox360s to do the same.

So it's matter of patience and stoutness, for XFlop 1 MS gave up after 3 1/2 yrs, ending losing 4 billions (also because they shot themselves in the foot and painted themselves in a corner by botching signally supply contracts with intel and nVidia ), while Sony, although initially losing also on PS2,  persisted supporting it much longer and still sells it, earning on HW and SW.



Stwike him, Centuwion. Stwike him vewy wuffly! (Pontius Pilate, "Life of Brian")
A fart without stink is like a sky without stars.
TGS, Third Grade Shooter: brand new genre invented by Kevin Butler exclusively for Natal WiiToo Kinect. PEW! PEW-PEW-PEW!   


Around the Network
Dno on 09 January 2008
Gamerace said:
Dno said:
Gamerace said:
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.

Nikko Citigroup's Kota Ezawa estimates the games division will lose $1.4 billion this fiscal year, following last year's $2.1 billion loss. And while he doesn't expect the business to be prosperous until late 2009, Ezawa applauds Sony's efforts to shrink the PS3's chips and tweak its design. Already such changes have cut the cost per machine to around $400 now, from above $800 just before it went on sale in November, 2006, he says. (The PS3 with an 80-gigabyte hard-disk drive retails in the U.S.

 

this means they cut making the ps3 buy 400 bucks... so next year expect it to be even cheaper so yes they will make money off their system... with PSN downloads Blu-rays and ps3 games they will. and id say very soon.


They'll likely start to realize a profit at some point yes. But the question is a NET profit.  Will they ever make enough money to offset the incurred losses?  The total profit from the PS2 wouldn't have been enough to offset these kind of losses, and the PS3 is no PS2.


to make a net profit all you have 2 do is sell for more then its being made sony has cost cut the hell out of that system.. nintendo made money off the Gamecube and the n64 and the ps3 WILL sell better and more games then both of those



CrashMan on 09 January 2008

@Dno

no, to make a UNIT profit you have to do that.

To make a NET profit your LTD income has to be greater than your LTD expenses which will be VERY difficult to do for the PS3.



I am a Gauntlet Adventurer.

I strive to improve my living conditions by hoarding gold, food, and sometimes keys and potions. I love adventure, fighting, and particularly winning - especially when there's a prize at stake. I occasionally get lost inside buildings and can't find the exit. I need food badly. What Video Game Character Are You?

Mega Man 9 Challenges: 74%

Waltz Tango Jitterbug Bust a move Headbanging
Bunny Hop Mr. Trigger Happy Double Trouble Mr. Perfect Invincible
Almost Invincible No Coffee Break Air Shoes Mega Diet Encore
Peacekeeper Conservationist Farewell To Arms Gamer's Day Daily Dose
Whomp Wiley! Truly Addicted! Truly Hardcore! Conqueror Vanquisher
Destroyer World Warrior Trusty Sidearm Pack Rat Valued Customer
Shop A Holic Last Man Standing Survivor Hard Rock Heavy Metal
Speed Metal Fantastic 9 Fully Unloaded Blue Bomber Eco Fighter
Marathon Fight Quick Draw G Quick Draw C Quick Draw S Quick Draw H
Quick Draw J Quick Draw P Quick Draw T Quick Draw M Quick Draw X
Dno on 09 January 2008
CrashMan said:
@Dno

no, to make a UNIT profit you have to do that.

To make a NET profit your LTD income has to be greater than your LTD expenses which will be VERY difficult to do for the PS3.

dude thanks for the info but i no what NET is.... sony is already selling the ps3 and making a PROFIT on each unit sold of the 80 gig and dead even on the 40 gig (which cost less then 400 bucks) i gave you all the proff. you people are telling me in five years time when ps3 is selling for sub 200 bucks and it cost sony sub 100 bucks to make and over 50 million ps3s WILL be sold by 2012 and countless games that sony will not of made a NET profit? then you are ALL WRONG and stupid to think so. sony cut the cost of the ps3 by FOUR HUNDRED DOLLARS IN ONE YEAR. by next year it will cost sony sub 300 bucks to make and then they will be in the black. sony said themselves that there is a chance to be in the black next year... which means THEY HAVE 3 MORE YEARS OF PROFITABLE INCOME ON THE PS3.... PEOPLE ARE REALLY CRAZY IN THIS SITE.......



Dno on 09 January 2008

the ONLY way the ps3 will not make money is if it stops selling. sony is not microsoft they will not go 7 years without making money its not gonna happen. the ps3 sold almost 9 million to date and i expect it to sell 11 million each year from now on and that will of course make sony a net profit somewhere in 2009 where every analyst says they will and they are way more informed then the "guesses" in this tread lol.



Around the Network
CrashMan on 10 January 2008

Sony is WAY in the red with the PS3. They can't just wave their "we're not MS" magic wand and suddenly make a profit on the PS3. IF they ever make a Net profit from the system it will take a long, long time (as in not Possible in at LEAST the next 4-5 years)



I am a Gauntlet Adventurer.

I strive to improve my living conditions by hoarding gold, food, and sometimes keys and potions. I love adventure, fighting, and particularly winning - especially when there's a prize at stake. I occasionally get lost inside buildings and can't find the exit. I need food badly. What Video Game Character Are You?

Mega Man 9 Challenges: 74%

Waltz Tango Jitterbug Bust a move Headbanging
Bunny Hop Mr. Trigger Happy Double Trouble Mr. Perfect Invincible
Almost Invincible No Coffee Break Air Shoes Mega Diet Encore
Peacekeeper Conservationist Farewell To Arms Gamer's Day Daily Dose
Whomp Wiley! Truly Addicted! Truly Hardcore! Conqueror Vanquisher
Destroyer World Warrior Trusty Sidearm Pack Rat Valued Customer
Shop A Holic Last Man Standing Survivor Hard Rock Heavy Metal
Speed Metal Fantastic 9 Fully Unloaded Blue Bomber Eco Fighter
Marathon Fight Quick Draw G Quick Draw C Quick Draw S Quick Draw H
Quick Draw J Quick Draw P Quick Draw T Quick Draw M Quick Draw X
celine on 10 January 2008
CrashMan said:
Sony is over <b>$300bil</b> in the red with the PS3. They can't just wave their "we're not MS" magic wand and suddenly make a profit on the PS3. IF they ever make a Net profit from the system it will take a long, long time (as in not Possible in at LEAST the next 4-5 years)

 US$ 3 billions not "$300 bil"



 “In the entertainment business, there are only heaven and hell, and nothing in between and as soon as our customers bore of our products, we will crash.”  Hiroshi Yamauchi

TAG:  Like a Yamauchi pimp slap delivered by Il Maelstrom; serving it up with style.

Bruceongames on 10 January 2008

Yes. But not anytime soon.



Incisive and erudite blog by game industry professional.

http://www.bruceongames.com/

 

CrashMan on 10 January 2008
celine said:
CrashMan said:
Sony is over $300bil in the red with the PS3. They can't just wave their "we're not MS" magic wand and suddenly make a profit on the PS3. IF they ever make a Net profit from the system it will take a long, long time (as in not Possible in at LEAST the next 4-5 years)

 US$ 3 billions not "$300 bil"


That's what I meant >_< sorry early day at work today, still a little hazy...



I am a Gauntlet Adventurer.

I strive to improve my living conditions by hoarding gold, food, and sometimes keys and potions. I love adventure, fighting, and particularly winning - especially when there's a prize at stake. I occasionally get lost inside buildings and can't find the exit. I need food badly. What Video Game Character Are You?

Mega Man 9 Challenges: 74%

Waltz Tango Jitterbug Bust a move Headbanging
Bunny Hop Mr. Trigger Happy Double Trouble Mr. Perfect Invincible
Almost Invincible No Coffee Break Air Shoes Mega Diet Encore
Peacekeeper Conservationist Farewell To Arms Gamer's Day Daily Dose
Whomp Wiley! Truly Addicted! Truly Hardcore! Conqueror Vanquisher
Destroyer World Warrior Trusty Sidearm Pack Rat Valued Customer
Shop A Holic Last Man Standing Survivor Hard Rock Heavy Metal
Speed Metal Fantastic 9 Fully Unloaded Blue Bomber Eco Fighter
Marathon Fight Quick Draw G Quick Draw C Quick Draw S Quick Draw H
Quick Draw J Quick Draw P Quick Draw T Quick Draw M Quick Draw X
Darmetrius on 10 January 2008

Will the ps3 make a net profit taking the ps3 hardware and software revenue and subtracting the net loss from research, marketing, selling consoles at a loss, and all the other things. I see it as kind of a long shot, not impossible but unlikely.

On the other hand there are several other things that sell directly related to the ps3 that could never be accurately calculated. How many ps2s were sold simply because a parents child wanted a ps3 from them for x-mas or birthday and the parent simply could not afford it. How many ps2 games are being sold that are exclusively played on a ps3. You would have to give a big percentage of the blu ray sales to the ps3. Not to mention it being a prime reason the war between hd-dvd is drawing to an end, when at one time it looked like hd-dvd may prevail. I'm sure there are many people who bought a psp because it could be used with the ps3. Like stated before sony hd tvs have been sold solely because of the ps3. All these things can never be calculated with the ps3 but were sold by Sony because of it.

So will Sony as a whole make a net profit off of the ps3? More than certain it will even if it doesn't look like on financial reports about the ps3 itself.