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

"""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.

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.

damn,

+1 for Darc Requiem

 EDIT :

Sony's Hirai eyes PS3 profit as costs decline

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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" ...

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.

libellule said: damn, +1 for Darc Requiem EDIT : Sony's Hirai eyes PS3 profit as costs decline Mon Jan 7, 2008 5:02am EST Email | Print | Share | http://license.icopyright.net/3.5398?icx_id=2008-01-07T100222Z_01_WEN3264_RTRUKOC_0_US-SHOW-HIRAI.xml&icx2_id=USWEN326420080107&section=CMPTRS',%20580,%20635,%201,%20'purchasePopup')">Reprints | Single Page | Recommend (0) [-] Text [+] 1 of 1Full Size Related News Take-Two CEO: Video game mergers inevitable Video game industry has turned corner: EA Metal Gear Solid 4 last of the great exclusives? European car industry choking on emission rules Sony PS3 weekly U.S. sales double after price cut powered by Sphere 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...

Yes , they could ... I see them barking even with development cost late 09 , and get into green zone sometime in 11 ... still , software will be the big money pusher for them ...

I would have to say no. They will have incurred too many loses on the console. Remember the loses exceed hardware components. Development costs, marketing, exclusivity contracts, software support, and other support all go on the spread sheet. When Sony spends twenty million dollars advertising the PS3 that has to be billed to the division. When Sony buys exclusivity that must be billed to the division. Every software update Sony does was coded by employees that had to be paid. Basically there are a lot of hidden costs on top of the inferred hardware losses.

Even if Sony gets to positive monetary gain on the hardware some point late in the next fiscal year. They still have to offset all of these incurred losses. Which they will continue to incur as the hardware becomes profitable. They might have a fifty million dollar advertising tab to pay off. They might have spent thirty million dollars in buying exclusive content. They may have to pay upwards of ten million dollars in software development. All of those added costs would drag the profitability into the next fiscal year at the very least. So it will have taken them three years to stop bleeding money. Realistically thats half of a consoles life devoted to bleeding badly.

That is actually the sunny version. The way things can go right for Sony. The grim version is that Microsoft forces Sony to reduce prices again. Their game sales remain in a slump. The other formats lower price increases pressure on Sony's own. Their console begins to get squeezed out of the market. Almost all of it is out of Sony's hands. They have no control over Microsoft or Toshiba's pricing. They can't change the buying habits of their customers. Changing market impression of your product is hard. The longer they stay out on the fringes the less likely it is they will be noticed or considered later on.

Everything Sony supposes has to be based on current trends, but what if those sales start slipping in response to these factors. Either Sony bleeds a lot more money to stay in the race, or they have to accept that they are going to slide off the map. After all it cost them over two hundred dollars more per console last year to keep that from happening. There has to be a limit somewhere. Where is the point of no return I wonder. Either way the result is the same.

They either have to increase losses to stay in the race, or they stand firm and watch the market drift away from them. Sony just isn't going to have a choice in the end. They either end up selling more consoles at a major loss, or they sell fewer consoles at a smaller loss.