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Forums - Sony Discussion - PS5 is being sold at a loss (officially confirmed)

thismeintiel said:

This isn't exactly surprising. Sony has always done this. And why bring up Nintendo? Nintendo hasn't been pushing graphics for generations, now, so their products are cheaper to make. Even if they tried, no one's buying a $500 handheld. Well, not no one, but at lot fewer would.

Eh, they're pushing them on handheld, which is all they need (whether or not phones are more powerful). 

I wonder how the PS5 is being sold at loss. As in, is the hardware alone being sold at a loss even without retailer costs, or is it just the cost to build it that push it over. Because the PS4 actually would be sold at about a $19 profit if not for retailer costs, as well as other costs, that aren't based around the systems specs.

In the PS5's case, it's almost certainly both costs which are pushing it over it's MSRP, especially because the PS5 is actually fairly powerful relative to it's release window, whereas PS4 became outdated somewhat quickly. But, just saying, it's not always because "muh powerful system" that these systems sell at a loss. 



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Nice it's confirmed, but it's been the norm for a while.



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Obvious, I don't think any piece of PlayStation hardware ever was sold at a profit at launch.

As a whole, PS3 and PS Vita lost Sony money. I'm pretty sure PSP did long-term as well.



Lifetime Sales Predictions 

Switch: 144 million (was 73, then 96, then 113 million, then 125 million)

PS5: 105 million Xbox Series S/X: 60 million

PS4: 120 mil (was 100 then 130 million, then 122 million) Xbox One: 51 mil (was 50 then 55 mil)

3DS: 75.5 mil (was 73, then 77 million)

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siebensus4 said:

This isn't actually something unusual, because PS4 and especially PS3 were sold at a loss, too. On the other hand, Nintendo is making profit with every Switch being sold, right from the start.

I believe the PS4 Wasn't sold at a loss



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SKMBlake said:
siebensus4 said:

This isn't actually something unusual, because PS4 and especially PS3 were sold at a loss, too. On the other hand, Nintendo is making profit with every Switch being sold, right from the start.

I believe the PS4 Wasn't sold at a loss

Also it seems Sony was taking at most a $60 loss per unit at launch. https://www.eurogamer.net/articles/2013-09-20-sony-expects-to-recoup-playstation-4-hardware-loss-at-launch



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Leynos said:

Nintendo is usually the only one making a profit out of the gate. Even when they made hardware of equal or better power than their rivals.

Nintendo is the only one of the three who can't cross-finance selling at a loss with income from other divisions of the company, so selling a console at a loss is a huge financial risk for them. This is why the Wii U and 3DS, which both were sold at a loss (initially only the Wii U, but the early and strong price cut of the 3DS put it in that region, too), were so damaging for Nintendo's finances, and why they acknowledge that the Switch was really boom or bust for them due to this.

That being said, Nintendo could start lowering the price of the Switch by now. It's almost 4 entire years now without a pricecut...



Bofferbrauer2 said:

Nintendo is the only one of the three who can't cross-finance selling at a loss with income from other divisions of the company, so selling a console at a loss is a huge financial risk for them. This is why the Wii U and 3DS, which both were sold at a loss (initially only the Wii U, but the early and strong price cut of the 3DS put it in that region, too), were so damaging for Nintendo's finances, and why they acknowledge that the Switch was really boom or bust for them due to this.

That being said, Nintendo could start lowering the price of the Switch by now. It's almost 4 entire years now without a pricecut...

Huh?



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RolStoppable said:
Bofferbrauer2 said:

Nintendo is the only one of the three who can't cross-finance selling at a loss with income from other divisions of the company, so selling a console at a loss is a huge financial risk for them. This is why the Wii U and 3DS, which both were sold at a loss (initially only the Wii U, but the early and strong price cut of the 3DS put it in that region, too), were so damaging for Nintendo's finances, and why they acknowledge that the Switch was really boom or bust for them due to this.

That being said, Nintendo could start lowering the price of the Switch by now. It's almost 4 entire years now without a pricecut...

Huh?

There was an interview with Reggie where he claims that this was the case:

https://www.nintendolife.com/news/2021/01/reggie_admits_switch_was_a_make_or_break_product_for_nintendo_after_poor_performance_of_wii_u



Bofferbrauer2 said:
RolStoppable said:

Huh?

There was an interview with Reggie where he claims that this was the case:

https://www.nintendolife.com/news/2021/01/reggie_admits_switch_was_a_make_or_break_product_for_nintendo_after_poor_performance_of_wii_u

Oh right, I should have remembered that. We had a thread about his exaggerated claims here.

Reggie is not with Nintendo anymore and during the time he was with them, he wasn't involved in the financial planning. Beyond that, there's public access to Nintendo's sales numbers and financials, so why take Reggie's word for something when the facts aren't stashed away in a secret area.



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

A Biased Review Reloaded / Open Your Eyes / Switch Shipments

Sogreblute said:
SKMBlake said:

I believe the PS4 Wasn't sold at a loss

Also it seems Sony was taking at most a $60 loss per unit at launch. https://www.eurogamer.net/articles/2013-09-20-sony-expects-to-recoup-playstation-4-hardware-loss-at-launch

Yeah but there is "loss by adding extra costs" and there is "loss by the sole production cost exceding it retail price", and the second one is way worse.



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