Chark said:
"The company aims to make a profit on hardware sales of the new PlayStation Vita handheld in less than three years" -Kaz Hirai That was not an answer on selling individual hardware at a loss. They are talking about the profitabilty of the Vita for the company. You are simply misinterpreting the arcticle. They are talking about when Sony expects the income from the Vita to turn a profit from the costs of developing it, not on individual manufactured units. Where are you getting your markup percentages? Retailers don't make that kind of money off these products. Also, where are you getting those 3DS number? $110? I could see packaging bringing it to $110 but what about the distubuters? Wholesalers? I do not think Nintendo is loosing very much money on 3DS sales right now. It is not a stretch to think that the Vita could be making a small profit when it has $20 to $70 more room to work with. Do you think the 3DS is selling at a greater than $70 loss? From the data, I can only conclude that the Vita is making a profit, or atleast the 3G model is. |
I read an article somewhere about how much markup retailers make to offset the volatile price fluctuations of videogame hardware manufacturers. I'm too lazy to look them up so google it yourself. What I do know is (from my teenage years working at retail) electronics were subjected to at least 20-30% markup and toys around 100% markup. That's why you see places like Target and Sears sometimes selling videogames or electronics for 50-75% off original price!!! One just has to look at HDMI cables and such to see the vast diffrence in price between retailers and wholesalers. Moving on I found this last year as a prediction of the Vita's sales and loss per unit that shows no misinterpretation with the Reuters article. It says:
Sony's PlayStation Vita will sell in the neighborhood of 2.5 million units before March 2012, says Kazuharu Miura, analyst for Japan's SMBC Nikko Securities. However, this respectable projection – not as high as, say, the DS' 5.3 million launch year, but not bad for a machine that won't even hit Western territories until early next year – is tempered by Miura's estimation that Sony will lose around 5,000 Yen ($US65) per unit sold. A less optimistic prediction still comes from Heavy Iron Studios' Matthew Seymour, who openly calls the system a “car wreck.”
Miura says the Vita can expect to sell closer to 8.5 million units in financial year 2012, its first full year at retail – saying that if his projection of 28 million units of software are shifted for that year as well, Sony's losses on the machine will be halved. He says these figures are highly contingent on Sony's ability to provide players with compelling software, which Ace Security's Hideki Yasuda warns will be harder than on previous machines. Yasuda says the Vita's higher graphical demands and unproven user base make developing for the system a higher-stakes gamble in the early days.
Seymour – who, along with Lyle Hall, heads the ex-THQ subsidiary Heavy Iron – is more blunt: “With all due respects to Sony and Vita, it's a car wreck.” You probably hadn't heard of Heavy Iron, whose games include UFC Trainer and Spongebob Squarepants: Battle for Bikini Bottom, until the studio came out against the great hope of handheld gaming, but Hall and Seymour don't want to come across like they're dissing Sony just for the sake of it. Hall says the company would love to see the platform succeed – “The technology is sweet... but I just don't know there's a market out there anymore for the hardware” – but question the relevance of releasing game-only platforms in a decade increasingly dominated by the possibilities of mobile technology.
“If people aren't willing to pay $249 for a Nintendo 3DS, why would they pay $299 for Vita?” asks Hall. “People don't want to carry more than one thing in their pocket: that’s why Android and iPhone have done so well.” The comparison makes the 3DS' first holiday season – at the controversially reduced price – one to watch as a possible bellwether for Vita's performance, with Yasuda having recently voiced “major pressure” for Sony to match Nintendo's price cut with its own revised figures.
source: http://www.gamesradar.com/analyst-vita-will-sell-well-and-cost-sony-65-per-unit/
So no more spin please. The facts so far is that the PSV is a losing endeavor for Sony who expected to sell 2.5M PSV before March 2012 and so far has only sold >2M units by mid-early May. The system is selling at a loss with the best game U:GA barely selling 500K units since launch, so software has yet to make up for losses in hardware, marketing and research. The PS3 was sold for a loss for many years and Sony is just beginning to recoup those losses. It would be downright idiotic for them to sell another console and hope to make up their investment 2-3 years down the line; especially in their current financial state. If I was a Sony fan (I am not) I would like them to put the Vita to sleep early in the game before more losses accure. It only makes sense since the PS4 is just around the corner don't you think? 
