pezus said: osed125 said: pezus said: This could still mean that they'll be selling PS4 at a loss btw. Just that they don't expect to lose $400 on every PS4 like they did with PS3 . A $100 loss per PS4 and software that makes up for the initial loss is the way to go. $100 loss? That's insane, you will need to sell 14 third party games or 4 first party games per console to recover that money (based on this, for first party it will be $27 per game and $7 for third party games (platform royalties)). Although I don't know who gets the $7 from "Returns", most likely the publisher, which in that case it will be 3 first party games. Of course. They do seem to be planning a minor loss. The software will help make the loss less than $50 per system. Actually, based on this Sony would get $34 per first party game (Publisher+platform royalty) if we assume the other prices are constant. Two first party games per console would go a long way to minimise the loss down to basically nothing and then you add a few 3rd party games to get even closer to zero. Edit: And if that returns goes to Sony then they'd only really need 2 first party games per console and they'd lose less than $20.

It would make more sense to make a $50 loss. With one game Sony will only felt short by $16 which will be the highest percentage because most people only buy one game at launch. This is for first party games, if the game people get at launch is a third party game then Sony will fell short by $43, really big difference.

I personally think that if Sony's taking a $100 loss the console will be $400. If the loss is $50 it will be $450. The latter is the one that makes more sense imo.

Remove the £200 cost of the bluray drive, the £150 of the cell and you're left with a system which will probably cost 499-549.

The key word they used was "major loss".... Nothing about selling for profit.

So I still expect the system to be priced under $499(with a $50 loss) and only one SKU.

let's see, wii u is 299 at a loss wich means about 250 in cost being sold for about 230 to retailers. they add 30% for profit and sell for 299.

we can consider wii u gamepad to be about $30 more expensive than dualshock 4, but that difference is easily covered on ps4 hard drive alone. then we have the expensive RAM, CPU, GPU, bigger cooler, more plastic pieces and that camera that looks like ps eye. the cost could end up around 400 dollars or at least close.

That means even a $100 loss would mean a $400 system on stores. if they won't take a big loss ($50 or less) we'll see a 450+ price tag. i guess that was the estimate anyway .

i think the biggest problem is when the console is still expensive while selling at a loss, wich is exactly what happed last gen.

they will sell at a loss crazily it will probably be $50-$80 loss but i never understand why they don't sell to early adopters at even or profit as they will buy anyway

You're forgetting that the PS4 is a one chip design with cpu and gpu integrated, witch will make it even cheaper to produce. Also the first model of the PS3 hade PS2 chips for backwards compatibility wich made it even more expensive. The PS4 will cost $400 to $450 to produce from my expectations.

Loss leading as a strategy like all strategies has its own particular pros and cons. The increase in market penetration that is offered can actually generate greater profits. Then might be had by selling at a profit out of the gate, because it allows more consumers to own the product for longer. Meaning that they will not only buy more for the console, but they will more often then not be buying at full retail. There is simply a lot more profit to be made early in the lifespan of a console then near the tail end.

At the end of a consoles life discounting starts to take its toll. Those who buy at the end don't necessarily have to pay retail. They have a huge library of games to choose from that have been heavily discounted. Other companies have knocked off most of the choice accessories. A larger used game market also effectively knocks out a lot of potential sales. Anyway the real money in consoles doesn't come from the hardware. It comes from the licensing. Which is like a money printing machine.

That said I think Sony going anywhere near that strategy with their next console would be the height of stupidity. That isn't to say that I doubt in the least that Sony has more balls then brains. What I am saying is given the cash reserves of the other two, and the gleeful willingness of one in particular to drive down profit margins and increase losses. It would be financial suicide for Sony to not leave itself a healthy margin at the outset. To protect against the very real possibility of a price war.

It wouldn't be so bad if Sony had the composure to withstand the temptation to compete at full throttle. Something in them wont let them settle for just finishing the race rather then winning it. Think about it every time they get to a point where they can start to make back some of their losses. They double down by enacting another price cut, or jumping onto another bandwagon. Given what we know about the specs. I have almost no doubt that Sony is going to end up repeating the last generation, and running the company right into the ground along the way.

People said the same thing about the Vita....then Sony ended up price matching the 3DS.

Ps4 won't be expensive. Definitely won't be $599. 
I'd say $499 MAX for the model w/ game.

So... that potentially means that PS4 will be expensive. Forget about the $ 400 price tag.

Sony really think carefully about pricing this time.

That was indeed a very big surprise but how long did that price match last?  And how often do we hear people demanding a price cut?    That $250 only sounded great when the 3DS was also $250.