Great news for Sony ! PS3 is really successful, it's nice seeing Sony back in profit.
Where are all the Sony doomsayers now ? I guess they're busy watching the 360 battling with PSP for the last place in worldwide hardware sales every week...
See, if people hated the PS3, they should have bought millions of them at launch time and then not buy any games or accessories.
:P
letsdance said:
I dont understand... how is it about 17 dollar loss for the 120gb and then for the exact same machine but with just twice as much space which would only cost a few dollars extra for sony but they sell it for 50 dollars more take now a 20 dollar loss... makes no sense. |
It's quite the opposite.
Because the 250 gig has a bigger markup... the 120 gig loses more then 18 dollars a piece.
To make this really simple lets go with a 1 for 1 issue.
Say they sell just as many 250's and 120's.
They lose 6 cents for every dollar right?
So you combine the two together then get your calculation.
300+350= 650.
So of that 650 they are losing 6 cents for every dollar right?
However since the profit margin is higher on the 250 model, that means the 120 model is losing more money then 18 dollars.
So example say the 250 gig breaks even.
That means the 120 is losing 36 dollars and not 18.
In otherwords. We take your 5 to 1 ratio right?
And we take your numbers... saying they get 50 dollars more, and spend 5 dollars on each harddrive.
So we get
5X+Y=1500/100X6
well its much smaller than the hundreds of dollars they were losing when the Phat launched!
So I'll give them some credit. $18 isnt that much. Small drops in RAM prices, blu ray diodes will pretty much offset that.
Doubt is not a pleasant condition, but certainty is absurd.
owner of : atari 2600, commodore 64, NES,gameboy,atari lynx, genesis, saturn,neogeo,DC,PS2,GC,X360, Wii
5 THINGS I'd like to see before i knock out:
a. a AAA 3D sonic title
b. a nintendo developed game that has a "M rating"
c. redesgined PS controller
d. SEGA back in the console business
e. M$ out of the OS business
My math MAY be wrong here... but I think that means
X= Y-45 (since we're trying to find losses not profit.)
So
5X+X-45=1500/100X6
6X-45=90
6X=135
X=$22.50
Which means btw that the 250 gig would be giving them a profit of $22.50. Odd how that turned out.
Though that is just a calculation for the US... when this is a worldwide figure.
Hence the loss for the 12 gig gets LARGER on USA based 120's when you take into account however much more they make per Euro and Yen... which they make more per Yen and Euro due to the recent devaluation of the dollar even if we chalk up all non-tax difference to retailer profit margin.
Understand now? Unless we can make some assumptions about Europe and Japan we can't say how much is lost per american 120 gig.
All we can really say is all that has been stated. That for every dollar of PS3's they sell, they lose 6 cents.
It is likely however American losses for 120 gigs are > then that while other areas loses are < then that.
| Squilliam said: If the hardware losses as implied are this low, then they must be losing money on something else. There are only 3 areas where they have big enough expenses to really lose all that money. 1. Advertising? They must be spending a lot here. 2. Game development? Face it, all HD publishers have been making losses and I doubt that Sony is any different. 3. Research and development? If they're spending heavily here, it means Console number 4 is inbound sooner than you think. |
3. It takes some years to develop a new console, not less than 4, most likely 5, and by at least one year (better 1and 1/2 year) before release they must be able to give developers a working development system for launch titles. So if they started development in late 2008-early 2009, just to make a hypothesis, it could mean a 2013-2014 PS4 release, totally coherent with a planned lifecycle of at least 7 years as main console and 2-3 years (even more if it keeps on selling) as entry level console. So yes, I agree. Curiously there are still people that don't understand that a 10 years lifecycle doesn't mean the next system is released after 10 years from the previous, some companies make latest and previous generations of their products overlap for a period, and Sony is amongst these ones (In other markets, like cars, Renault has currently done it with old and new Clio for a period quite long, not only to clear old stocks, FIAT has sold both old and new Punto for years, with the old one catering for a lower segment, just like Renault does, while Citroen and VW do it for shorter periods, in razors and blades market Gillette sells Mach3, Fusion and older models, etc).
Alby_da_Wolf said:
I thought there was irony for both. Anyway, the different parts of the two consoles followed very different curves of cost reduction, blue laser, in particular, was subject to different and opposite forces, the natural cost reduction as production increases and process is refined, and occasional shortages tending to keep the price high, particularly when HD-DVD was still fighting the format war, then, after the format war victory, BD could really start the normal fast cost reduction of optical drives when they reach sufficient maturity. Relying on more standard components, XB360 followed a more regular curve, but its initial serious cooling problems added unpredicted costs, not only to repair or replace faultyunits, but to redesign mobos and cooling several times (CPU and GPU shrinking is normal during their life and after the costs of the shift they start producing savings, but it can be argued that the bigger initial process, having to be abandoned early for cooling problems, spread its costs over a smaller number of units, so it gave more fixed costs than predicted while the shrunk processes will follow their normal lifecycles). Then there are other factors, some costs, like shipping and warehousing, are roughly fixed, so they weigh in proportion more on cheaper units. Not to mention that selling more in EU, with strong Euro and weak Dollar, is more profitable (or less costly when sales ar still at a loss) than selling more in USA. Sony isn't winning by any means, but some things it needed, some really dangerous gambles, went eventually the right way, but now it needs to sell at least another 30M+ PS3 to keep the brand alive and respected, but at least another 40M+, instead, if it wants to recover the huge costs too. MS is in a much better financial position, but weren't it for Halo, Gears of War and other exclusive huge successes and the huge success on it of some multiplatforms too, it would be unimpressive, even disappointing having lost its initial lead on Wii in less than one year. To better even more the financial aspect, XB360 enjoys the highest tie ratio, it's a really excellent SW seller. |
That was an excellent analysis, especially the part about cost reductions. You're good at this.
Alby_da_Wolf said:
3. It takes some years do develop a new console, not less than 4, most likely 5, and by at least one year (better 1and 1/2 year) before release they must be able to give developers a working development system for launch titles. So if they started development in late 2008- early 2009, just to make a hypothesis, it could mean a 2013-2014 PS4 release, totally coherent with a planned lifecycle ot at least 7 years as main console and 2-3 years (even more if it keeps on selling) as entry level console. So yes, I agree. Curiously there are still people that don't understand that a 10 years lifecycle doesn't mean the next system is released after 10 years from the previous, some companies make latest and previous generations of their products overlap for a period, and Sony is amongst these ones (In other markets, like cars, Renault has currently done it with old and new Clio for a period quite long, not only to clear old stocks, FIAT has sold both old and new Punto for years, with the old one catering for a lower segment, just like Renault does, while Citroen and VW do it for shorter periods, in razors and blades market Gillette sells Mach3, Fusion and older models, etc). |
You'd only account the costs of the R+D against the PS3 specifically if the R+D directly related to that console or successor. Since another handheld is expected far sooner than a new console you'd expect a majority of their efforts to be focusing on this area. Pre-production work and ramping up R+D are two different things, they have people working on the PS4 but probably not even a tenth of the people working directly on the successor to the PSP. Well at least thats the way I see it.
Tease.
| Squilliam said: If the hardware losses as implied are this low, then they must be losing money on something else. There are only 3 areas where they have big enough expenses to really lose all that money. 1. Advertising? They must be spending a lot here. 2. Game development? Face it, all HD publishers have been making losses and I doubt that Sony is any different. 3. Research and development? If they're spending heavily here, it means Console number 4 is inbound sooner than you think. |
They have 5,000 employees in SCE, which means a lot of fixed expenses.
Obviously all the things you mentioned cost money, though number 2 is mostly employee salaries which are part of those fixed expenses.
My Mario Kart Wii friend code: 2707-1866-0957
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