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Forums - Sales Discussion - Do you think Sony will ever make a net profit from the PS3?

to say the truth ,

it was
a 100$ price cut (a recent WW one)
and
a new model (40gb) which I asume cost less to produce

and yes, MS should have atacked during holidays 2007
but they wanted to earn money NOW, so they have decided to not make a price drop.



Time to Work !

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libellule said:
to say the truth ,

it was
a 100$ price cut (a recent WW one)
and
a new model (40gb) which I asume cost less to produce

and yes, MS should have atacked during holidays 2007
but they wanted to earn money NOW, so they have decided to not make a price drop.

 No, you don't drop before holidays you drop after, since holidays you make sales anyways, by April expect another 360 Price drop



 

Predictions:Sales of Wii Fit will surpass the combined sales of the Grand Theft Auto franchiseLifetime sales of Wii will surpass the combined sales of the entire Playstation family of consoles by 12/31/2015 Wii hardware sales will surpass the total hardware sales of the PS2 by 12/31/2010 Wii will have 50% marketshare or more by the end of 2008 (I was wrong!!  It was a little over 48% only)Wii will surpass 45 Million in lifetime sales by the end of 2008 (I was wrong!!  Nintendo Financials showed it fell slightly short of 45 million shipped by end of 2008)Wii will surpass 80 Million in lifetime sales by the end of 2009 (I was wrong!! Wii didn't even get to 70 Million)

"""No, you don't drop before holidays you drop after"""

==> u drop price when :

1/ Xmas is coming
2/ Big games are coming (like GTA this april)
3/ u are in the big shit (like Sony before the 40gb)


""by April expect another 360 Price drop""

==> I believe too
but MS has a cheaper console and is not able to sell more Xbox360 this Xmas compared to the PS3 sales : this is not good.



Time to Work !

Well... No... They've been losing too much money on the Playstation 3. Only recently, they have been making money on the Playstation 2, and since the Playstation 3 may never become as popular as the Playstation 2, the chances are just too low.



No they've lost too much money. Even if they managed to somehow pull PS2 numbers they'd still be in the red. The PS2 only made Sony 1 Billion dollars in total profit. Its the prime reason Nintendo continued to bank huge profits despite low sales. Nintendo doesn't use a loss leader business model. In order to make a significant profit with the loss leader strategy, the product most overwhelming dominate its industry. The PS2 did, the PS3 has not.



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damn,

+1 for Darc Requiem

 EDIT :

Sony's Hirai eyes PS3 profit as costs decline

Mon Jan 7, 2008 5:02am EST

By Franklin Paul

LAS VEGAS (Reuters) - Sony Corp (6758.T: Quote, Profile, Research) gaming chief Kaz Hirai hopes to turn a profit on the PlayStation 3 console business in the entertainment conglomerate's next fiscal year, fuelled in part by falling costs for the parts used to make the device.

"We want to get to the positive side of the equation as quickly as possible," Hirai, who is chief executive of Sony Computer Entertainment, said late on Sunday on the sidelines of a news conference at the Consumer Electronics Show in Las Vegas.

"The next fiscal year starts in April and if we can try to achieve that in the next fiscal year that would be a great thing. We are going through the budgets right now. That (profitability) is not a definite commitment, but that is what I would like to try to shoot for."

His comments came after Sony announced stellar holiday sales for the PS3. The company said on Sunday it sold 1.2 million PlayStation 3 video game consoles in North America over the period, two-thirds what it sold in the rest of the year.

The Tokyo-based electronics and entertainment conglomerate currently loses money for each PS3 it sells.

Sales of the PS3 have lagged those of Microsoft Corp's (MSFT.O: Quote, Profile, Research) Xbox 360 and Nintendo Co Ltd's (7974.OS: Quote, Profile, Research) Wii consoles due to what analysts say is its lofty price and a dearth of must-have games.

Great games, which draw consumers to buy the console, matched with declining component prices will hopefully lead to profitability for the PS3 and the company's gaming division overall, Hirai said.

"Component costs are coming down, and the number of components ... we are seeing a reduction," he said. "The 40 gigabyte PlayStation 3 obviously has fewer components (than more powerful models), and uses less power, which means that components required to dissipate heat, for example, can be smaller, so there is some cost reduction there."

"So costs are coming down significantly," he added, noting that the decline is in line with what the company had expected.

(For more from the Consumer Electronics Show, please visit the MediaFile blog: blogs.reuters.com/mediafile/)

 

==> I suppose the important word is "hope" ...



Time to Work !

They probably won´t as their strategy needs huge sales and market domination to work.

And usually I wouldn´t even be bothered about that because Sony is big enough to offset those losses. There is a problem, though: Sir Howard Stringer. He literally cuts everything that doesn´t make money out of Sony´s program. I don´t think he will cut the Playstation brand but he could give them a hard time... Poor Kaz... (note: This post was pure fun and nonesense. No, I don´t think the Playstation will "die" I just like the thought of Mr. Hirai havin a hard time with his boss as I don´t like him.)



No! Everyone knows that the PS3's hardware is expensive and was initially sold at a fairly high loss; it is likely that their initial pricing strategy was designed around rapidly reducing the cost to manufacture a PS3 to a level where the loss was small (or they were potentially turning a profit off of each PS3), and then waiting 12 to 18 months (while reducing costs further) until the margin on each PS3 was large enough to reduce the price and only take a small loss (or turn a small profit).

From what we have seen, I believe that it is likely that Sony has passed the initial savings on the PS3 onto their consumer which means the PS3 continues to be sold at a fairly large loss. Realistically, for Sony to turn a profit this generation, over the next 18 to 24 the PS3 will have to remain (pretty much) the same price while Sony reduces manufacturing costs and can start selling the PS3 at a farily large profit; over this same timeframe it is likely that the XBox 360 will see a $100 to $150 reduction in price which will put massive pressure on the PS3 to lower its price.

In a lot of ways, the PS3 seems to be in a similar position to the XBox and will likely continue to cost Sony money through out the generation mainly because Sony will be forced to reduce the PS3's price before it can afford to.



No chance.

During the PS2 era, SCE made a net profit of $2.3 billion with a system that was totally dominating the market. The PS3 already lost SCE more than $3 billion and this system won't become dominate like the PS2 was.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

A Biased Review Reloaded / Open Your Eyes / Switch Gamers Club

libellule said:

damn,

+1 for Darc Requiem

EDIT :

Sony's Hirai eyes PS3 profit as costs decline

Mon Jan 7, 2008 5:02am EST

By Franklin Paul

LAS VEGAS (Reuters) - Sony Corp (6758.T: Quote, Profile, Research) gaming chief Kaz Hirai hopes to turn a profit on the PlayStation 3 console business in the entertainment conglomerate's next fiscal year, fuelled in part by falling costs for the parts used to make the device.

"We want to get to the positive side of the equation as quickly as possible," Hirai, who is chief executive of Sony Computer Entertainment, said late on Sunday on the sidelines of a news conference at the Consumer Electronics Show in Las Vegas.

"The next fiscal year starts in April and if we can try to achieve that in the next fiscal year that would be a great thing. We are going through the budgets right now. That (profitability) is not a definite commitment, but that is what I would like to try to shoot for."

His comments came after Sony announced stellar holiday sales for the PS3. The company said on Sunday it sold 1.2 million PlayStation 3 video game consoles in North America over the period, two-thirds what it sold in the rest of the year.

The Tokyo-based electronics and entertainment conglomerate currently loses money for each PS3 it sells.

Sales of the PS3 have lagged those of Microsoft Corp's (MSFT.O: Quote, Profile, Research) Xbox 360 and Nintendo Co Ltd's (7974.OS: Quote, Profile, Research) Wii consoles due to what analysts say is its lofty price and a dearth of must-have games.

Great games, which draw consumers to buy the console, matched with declining component prices will hopefully lead to profitability for the PS3 and the company's gaming division overall, Hirai said.

"Component costs are coming down, and the number of components ... we are seeing a reduction," he said. "The 40 gigabyte PlayStation 3 obviously has fewer components (than more powerful models), and uses less power, which means that components required to dissipate heat, for example, can be smaller, so there is some cost reduction there."

"So costs are coming down significantly," he added, noting that the decline is in line with what the company had expected.

(For more from the Consumer Electronics Show, please visit the MediaFile blog: blogs.reuters.com/mediafile/)

 

==> I suppose the important word is "hope" ...


 This thread is about net profit, not about when sony will stop losing money on PS3.  Even if they started making money already (which is not happening) they wouldn't even come close.  we're talking about 3 billion dollars here...



currently playing: Skyward Sword, Mario Sunshine, Xenoblade Chronicles X