drkohler said:
Again for the third time: what you quote/write is an utterly, totally, absolutely, completely irrelevant point for any company. You are arguing that if I make X dollars with product A, I cannot be profitable with product B if it costs more than X to develop. This is so completly rubbish there is no need to argue about it. Nowhere in the "when do I make profit" equation does a factor enter that says if I made $100'000 by selling eggs that I can't ever make profit with cars that cost $100'001 to develop. |
That's a horrible analogy. The PS2 and PS3 are not as different as eggs and cars. They share the same capabilities, target the same users, (though PS3 can pick up a few Blu-Ray only customers) and compete against similar products. Besides the arguement that's being made is that if I make X dollars with product A, product B needs to be at least as successful as product A to make X or more dollars. Comparing PS3's success to PS2's is measured in terms of sales, more software since that generates most of the profits than hardware which contributes most of the loss at least in the early years.
Now of course Sony and SCE don't care about the previous losses, that is they don't feel the need to make up for them. They just want to generate profits in any and every quarter possible. But the original arguement was "A) It's quite clear that the PS3 will never be able to earn back the money that has been invested in it..." so while they might not care, we do. In order to do that, the fact is in the rest of the PS3's lifetime, which is dictated by consumers and not Sony, (unless they pull it early while there's still demand) it will have to earn more than the PS2 did in its lifetime. Now nobody is saying that it's impossible for a product to do better than the PS2 did, just that the odds of PS3 doing better are quite slim. Since PS2 was primarily a loss-leader as well, most of its profits were generated thanks to massive software sales due to it's extremely large userbase. Sony is very unlikely to have the same advantage this generation. Of course that doesn't mean software sales will suffer drastically as well, but they will suffer somewhat which means decreased earnings. Then there's also the fact that development costs have risen gen-to-gen without a match in sales, a fact that hits every publisher. Making less per unit on less units is hardly the path to out-perform a predecessor.
