Loud_Hot_White_Box said:
I think people are referring to this recent report. It's what I was remembering when I earlier said Playstation was profitable as of fairly recently. Someone then countered that but but Sony Networked Products, of which Playstation is a subdivision, wasn't profitable, which is kind of like you saying that the Zune and the rest of EDD is killing 360's numbers.
Kazuo Hirai, president and group chief executive of Sony Computer Entertainment, told The Times at the inaugural Gamescom convention in Cologne: “We felt it was the right time to pass on the benefits of the fact that we’ve been able to reduce the number of components and their sizes. We wanted to pass the cost savings on to our consumers in the new price point.” Hirai admitted that Sony already loses money on each console it sells. “If you’re just talking about the hardware alone, the quick answer is yes, we do lose money on every one. That makes good headlines, but I don’t actually know that that’s the true nature of the business that we’re all in, whether it’s PlayStation, Xbox or the Wii. “I think the better indicator is to look at the business as a whole platform, to say are you profitable in terms of the hardware, software and peripherals. And the answer to that question is yes.” Both Nintendo and Sony face particular problems in cutting hardware prices, as the Japanese yen has appreciated by over twenty percent against the pound in the past two years, which has had a huge impact on their profits and leading Nintendo to unfavourably raise the UK distribution price of Wii without increasing the RRP, cutting many independent retailers out-of-the-picture. Electronic Theatre will keep you updated with the latest developments from all three console manufacturers. http://electronictheatre.co.uk/index.php/playstation3/playstation3-news/2765-sony-confirms-playstation-3-official-uk-rrp |
I think as a platform, the PS brand had reached some level breakeven in the past couple of qtrs, but when you chop $100 off the price, it's hard to overcome. Just looking at a 3rd party game, with 5-15% margin for the retail price going to the console owner...you make out much better on 1st party games, but you'd need to sell an additional 4-5 games more for every console sold...or a mix of periphals as well. We won't have to wait too much longer, as the winter qtr reports will be here by Feb '10.
"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."
- From By Schism Rent Asunder
