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

Sorrow880 said:
Once again though...it is hard to measure the true losses. If blu-ray is very successful in the future, that will be because of the ps3. However, that won't be included in the ps3's #'s. Also, how much does the ps3 help Sony's other departments? e.g. HD tv's, etc.?
As I said, it's the only reason I bought my Sony HD tv. W/O my ps3, I wouldn't have bothered going HD or even getting a Sony if I did (probably would have gotten a Samsung or Toshiba)

Regarding Blu-Ray, I'm a bit confused. Sometimes, Sony fanboys say that Blu-Ray is not only Sony's format, and that the numerous other interested companies from the Blu-Ray association will make its cost go down even without competition from HD-DVD. Then some other times, we hear people saying that Blu-Ray's royalties will make Sony recoup their massive losses with the PS3.

Which one is it, does Sony get a big share of Blu-Ray's royalties or don't they?

 



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Without knowing the the revenues and margins, it's difficult to say how much profit is being made and will be made from blu-ray and associated products. Nintendo has demonstrated that 23%+ profit margins are achievable in the VG sector. So even though the blu-ray products might generate more revenue, it is unclear whether the actual/potential profit is greater.



@NJ5

First off, I'm not a Sony fanboy.

I support all the consoles and love them all. Hell, I was up till 2:00AM playing 360 just last night. 

Secondly, both are true.  Blu-ray (if successful) will help Sony recoup losses & the prices will drop just like DVD prices dropped even though there was no format war.


But yes, Sony will make money off blu-ray if it is successful and they do have royalties.
In addition, other partners will make money off blu-ray too. And the price will go down. Technology prices always drop. You don't have to have 2 different formats for the price to go down. DVD is a prime example--the prices have dropped DRAMATICALLY even though it is the only format. I bought a dvd recorder for $30.00 just the other day...not many years ago you couldn't get one for less that $400! Technology advances and competition always causes electronics to drop in price over time.

I'd wager we'll see a $50-75 blu-ray player in a few years if it is the successful format.

Now Samsung, Philips, Sony, Funai, etc. will all be competing for blu-ray hardware sales. e.g. Funai just announced a sub $300 blu-ray player at CES (rumored to be around $250)...Well, that will force someone else to come out with a $200 blu-ray player to try to gain sales.

So--all are true...Sony will make money, their partners will make money, and the cost of blu-ray players will continue to decline (probably not as quickly, but will still decline).



Well, I now only have access to a PS3 & 360...Plan on buying a wii soon (lol, if I can ever find one available!) but will probably wait until some of the major RPG's come out like Dragon Quest & Tales, etc.

Anyhow, I'm so far behind in games to play that I'm not in a huge hurry (lol, haven't even gotten a chance to finish God of War II yet!) 

Sorrow880 said:

First off, I'm not a Sony fanboy.

I support all the consoles and love them all. Hell, I was up till 2:00AM playing 360 just last night.

Secondly, both are true. Blu-ray (if successful) will help Sony recoup losses & the prices will drop just like DVD prices dropped even though there was no format war.


But yes, Sony will make money off blu-ray if it is successful and they do have royalties.
In addition, other partners will make money off blu-ray too. And the price will go down. Technology prices always drop. You don't have to have 2 different formats for the price do go down. DVD is a prime example--the prices have dropped DRAMATICALLY even though it is the only format. I bought a dvd recorder for $30.00 just the other day...not long ago you couldn't get one for less that $400! Technology advances and competition always cause electronics to drop in price over time.

Now Samsung, Philips, Sony, Funai, etc. will all be competing for blu-ray hardware sales. e.g. Funai just announced a sub $300 blu-ray player at CES (rumored to be around $250)...Well, that will force someone else to come out with a $200 blu-ray player to try to gain sales.

So--all are true...Sony will make money, their partners will make money, and the cost of blu-ray players will continue to decline (probably not as quickly, but will still decline).


I didn't say you're a fanboy ;) Even though I quoted you, I was talking about the general comments I see regarding this issue.

What I really want is either a reliable source which tells us how much Sony gets from each Blu-Ray disc sold, or for people to stop saying stuff they don't know is true. It'd be great for Sony if they stood to get that money, but will they, or won't they?

 



My Mario Kart Wii friend code: 2707-1866-0957

NJ5 said:
Sorrow880 said:

First off, I'm not a Sony fanboy.

I support all the consoles and love them all. Hell, I was up till 2:00AM playing 360 just last night.

Secondly, both are true. Blu-ray (if successful) will help Sony recoup losses & the prices will drop just like DVD prices dropped even though there was no format war.


But yes, Sony will make money off blu-ray if it is successful and they do have royalties.
In addition, other partners will make money off blu-ray too. And the price will go down. Technology prices always drop. You don't have to have 2 different formats for the price do go down. DVD is a prime example--the prices have dropped DRAMATICALLY even though it is the only format. I bought a dvd recorder for $30.00 just the other day...not long ago you couldn't get one for less that $400! Technology advances and competition always cause electronics to drop in price over time.

Now Samsung, Philips, Sony, Funai, etc. will all be competing for blu-ray hardware sales. e.g. Funai just announced a sub $300 blu-ray player at CES (rumored to be around $250)...Well, that will force someone else to come out with a $200 blu-ray player to try to gain sales.

So--all are true...Sony will make money, their partners will make money, and the cost of blu-ray players will continue to decline (probably not as quickly, but will still decline).


I didn't say you're a fanboy ;) Even though I quoted you, I was talking about the general comments I see regarding this issue.

What I really want is either a reliable source which tells us how much Sony gets from each Blu-Ray disc sold, or for people to stop saying stuff they don't know is true. It'd be great for Sony if they stood to get that money, but will they, or won't they?

 

Lol, sorry, I'm use to people assuming I'm a Sony fanboy since I have a blu-ray player--gets old.

I don't know where a source is about how much Sony gets per disc, but I'll see what I can find over at the AVS forums (I frequent)...I know it has been press released that they receive royalties though.



Well, I now only have access to a PS3 & 360...Plan on buying a wii soon (lol, if I can ever find one available!) but will probably wait until some of the major RPG's come out like Dragon Quest & Tales, etc.

Anyhow, I'm so far behind in games to play that I'm not in a huge hurry (lol, haven't even gotten a chance to finish God of War II yet!) 

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Of course Sony can make the PS3 profitable, they are hardware manufacturers and know how to bring down the cost, it's all a matter of time, hell for all we know Sony could have already broken even with the PS3.



Troll_Monster said:
Of course Sony can make the PS3 profitable, they are hardware manufacturers and know how to bring down the cost, it's all a matter of time, hell for all we know Sony could have already broken even with the PS3.

Except you're ignoring the fact that Kaz Hirai just said yesterday that they were hopeful but non-commital about making a profit with the PS3 somtime in the NEXT fiscal year.



Troll_Monster said:
Of course Sony can make the PS3 profitable, they are hardware manufacturers and know how to bring down the cost, it's all a matter of time, hell for all we know Sony could have already broken even with the PS3.

First of all, no, they haven't broke even with the PS3 in terms of hardware costs, as you can see in this thread.

Second of all, this thread is about net profit, meaning whether Sony will have made money from the PS3 as a whole (including hardware, software, royalties from 3rd party software, marketing, R&D costs, moneyhats to 3rd parties, etc etc etc).

Add all the revenue (received money), subtract all the expenses, and you get the net profit. Will it be positive (profit), or negative (loss)? That's what this thread is about.

 



My Mario Kart Wii friend code: 2707-1866-0957

Sorrow880 said:
Once again though...it is hard to measure the true losses. If blu-ray is very successful in the future, that will be because of the ps3. However, that won't be included in the ps3's #'s. Also, how much does the ps3 help Sony's other departments? e.g. HD tv's, etc.?
As I said, it's the only reason I bought my Sony HD tv. W/O my ps3, I wouldn't have bothered going HD or even getting a Sony if I did (probably would have gotten a Samsung or Toshiba)

While you are right, this brings us into very tricky math that none of us will ever know the answer to for certain.

Remember that Blu-ray up to this point has also been a financial burden on Sony. There is no way their current sales are making up for R&D costs, advertising (who pays for the Blu-ray PS3 commercials... SCE or the Blu-ray division?), and a whole slew of other factors.

Considering that it's still far from certain that Blu-ray will actually be a success in the market (there's always the possibility that it will be the next LaserDisc) and how much Sony went in the hole to make the format viable, things are very much in the air.

If Blu-ray does succeed, it will certainly offset the losses on the PS3... But it could take years. Hard to tell, really. We just don't have enough information on the subject.




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Darc Requiem said:
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.

Darc Requiem.

A Requiem for Truth.

Cant say it any better than this.

Loss Leader in reality equals Loser, a Leader in Loss.

It's always a bad business model. At best it should always be used as a introductory or transitory phase to break into a business or to make things happen in your favor for the short term. 

John Lucas 



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