DOWN PERISCOPE: Sony to drop PS3 to 299$

[shams]

jkimball said:

shams said:

rukusa said:
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Financially, the price cut makes sense, consoles have historically been sold at a loss until the tail end of their lifetime. The only consoles not sold at a loss are the Sega Saturn(sold at the price to manufacture) and the Nintendo Wii(sold at a $100 profit for Nintendo). Nintendo, Microsoft, and Sony make most of its money off of game licensing, not the actual console. For every game released, they developer must pay $10,000 worth of licensing fees to Sony(its traditionally been $20,000 for all 3 companies, but this was another cut Sony made to encourage developers recently). They also make a bulk of their profit from peripherals, like memory cards and controllers.

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BTW, the bolded part is completely incorrect.

That is simply the cost of a devkit - and its only Sony that had such a ridiculous price on a PS3 devkit (Wii kits start from $2k).

 

BTW the bolded part is completely _correct_. You buy a devkit for 10k. Nice. Then you have to *publish* the game. You need Sony's permission, and you pay licensing fees to do so. This is Sony's cut of every PS3 game sold. That's how Sony gets paid for selling all those consoles at a loss! How do you think Sony recovers their HW losses? Magic? You play a flat fee upfront, plus a decling fee per unit sold. THis applies to anthing carrying the PS3 logo. Similar thign applies to using the Blu-Ray logo. You can't just start printing BD movies - you gotta pay the fees first!

Ninentdo is famous for being *very* militant about licensing fees. If you didn't pay Ninty to use the Nintendo 'gold seal' on your games, expect to find yourself in court. There were a number of 3rd party developers who tried to sell 'unlicensed' games for nintendo systems. Nintendo sued them all into the ground. Maybe, having lost the last two generations, Nintendo is nicer now. And maybe Sony, having won the last two generations is teh bad guy this round....

Licensing fees are built into the production fee/cost for units. Its no magic "$10k" fee for a product like that - so the numbers presented above are completely incorrect.

I haven't seen the latest figures on licensing fees for a while, but last I heard fees for the PS3 were significantly higher than either the Wii or the 360.

Nintendo has also (for a while) had a system where "budget" titles can get a cheaper production run, and pay a smaller licensing fee.

The comment above about "$20k for all three companies" is what I was specifically highlighting as completely incorrect.

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Fact - developing a game for the PS3 is significantly more expensive than for the 360, and much more so again than for the Wii. This is part development cost, part devkit costs & part licensing fees.