Good thoughts, and yes its more of they're not looking to get 1st for now at least even though PR is still trying to boast that, but yeah it makes sense not to have a price cut as it would only put them more into the hole, I do foresee a 360 pricecut only because PS3 sales are a bit more then theirs, I would say maybe august/September. It's all up to 360 if they want to be 2nd they have got to strike now with the right moves, this is what I've always said would be PS3's year to step up or fall, if they can't get this year then I would say they may never gain that momentum again.

johnsobas said: you are absolutely batshit insane. Do you realize what it means to make a profit lifetime for the PS3? That means making up 3.6 billion dollars, and that doesn't even account for the PS2 and PSP profits that helped make that number small than it really is. The PS3 would have to make way more money than the PS2 in did in a much smaller period of time, good luck with that one.

Hmm.. let's engage our brains for a few seconds. Sony has given the PS3 a lifetime of ten years, and in about 2 years, it will have sold roughly 40 million PS3s. If every of those consoles buys two games only per year at a profit of $10 for the rest of its lifetime (5 years), that would be 5*40Mio*2*$10 = $4 billions profit...

Kasz216 said: Well good. If they keep losing money for a while longer the PS3 might of ended up a 10 year system because the board members would refuse to greenlight a PS4... or if they did, it would likely receive less development budget. If they're profitable from here on out I believe the PS4 will be better then if they lose more money to throw a few extra million onto the "sold" total.

I think you overestimate the budget for a PS4. The PS3 is a revolutionary product in the sense that it contains two components (three of you count RDRAM) which have never been used before - the cell processor and the blu-ray optics. Both required hight R&D and setup costs. Will there be a revolutionary PS4? I think it will more likely be an evolutionary step, not requiring new mass storage media(s) or a new processor type. The big question mark is the GPU which might be a renderchip or something new which would ultiamtely drive the development costs

 

Tuanniez said: I really hope that Sony can cut the cost of each PS3 fast. If they can sell the new model at the same price for a reasonable time, they can make some of their losses back before they make a price drop, and break even again maybe on every unit sold. Sony needs to stop bleeding money fast. Sony is losing alot of money, but I'm sure they'll be in constant profit in the second half of 09.

It is simply not true that Sony is losing a lot of money _now_ or has in the last quarter. Let's summarize the current state of the PS3: 

 1. The last quarter was negative because of remaining stock of "expensive" 60G/80G models. At the end of 2007, Sony still had several 100'000 "older" models to sell and those came with a tacked-on production penalty of around $200.

2. 40G Units in production _now_ cost about $350 (-10%..+5%) to manufacture. The cost of manufacturing is not likely to drop significantly in the next years, there is very limited room for improvement for a quality product (the prime suspect would be the graphics unit, a $15 chip that Sony apparently might have paid way too much for).

These units ship into three markets with different prices:

-Asia. The home market has always seen lower prices than the rest of the world (guess you have to impress in your home turf), current PS3s sell around $350 resulting in a considerable loss per unit sold.

-NA market sees prices around $400, resulting in a small loss or break-even point.

-In Europe/others units sell around $600, resulting in a small to a considerable profit depending on the individual taxing system in the countries.

The irony at the moment is that the very low sales in Asia makes the PS3 slightly profitable on the hardware level, as the heavy losses in Japan are easily offset by the profits in Europe (so Sony will hang onto the prices as long as they can get away with it).

My prediction is that - keeping prices as they are now - Sony will report a profitable gameing division already in the next quarterly report due to all three consoles being profitable for the first time. 

 

drkohler said: johnsobas said: you are absolutely batshit insane. Do you realize what it means to make a profit lifetime for the PS3? That means making up 3.6 billion dollars, and that doesn't even account for the PS2 and PSP profits that helped make that number small than it really is. The PS3 would have to make way more money than the PS2 in did in a much smaller period of time, good luck with that one. Hmm.. let's engage our brains for a few seconds. Sony has given the PS3 a lifetime of ten years, and in about 2 years, it will have sold roughly 40 million PS3s. If every of those consoles buys two games only per year at a profit of $10 for the rest of its lifetime (5 years), that would be 5*40Mio*2*$10 = $4 billions profit...

It doesn't exactly work like that, and explaining how it works would be unreadable on an internet forum.

 

Lets just say that in Sony's entire history, they have only broken a billion dollar profit once.

 

 

While I can see your point, it would be possible for the PS3 to break-even or make a small profit(Sony is banking on it), it is certainly gonna take some slow going and again, price drops shouldn't be on the table until manufacturing costs drop equiventally.

 

What this means is the sales surge players like Crazzy want, that will "propell the PS3 to dominance" supposedly, aren't gonna come from any price cuts unless Sony wants to drop that "overall profit of the playstation brand" number to zero.

Sony need to do what Microsoft has done, which is wait it out and not drop the price a lot. They both need to focus on profitability from here on out. They have enough developer support to continue selling lots of games, so why shouldn't they focus on making profits?

I dont see a drop for a long time. We have seen how quickly things can turn around e.g. The Rise of Wii, Ps3 40 gig introduction. Sony will ride the waves of there big titles, MGS4 Tekken 6 etc. As a company they know what they are doing and while they envy the Wii marketshare its tough luck. Financial security is far more important.

If there big Ps2 franchises were not on the way then maybe price cutting would be necessary. However, some of them are arriving and they will sell hardware nicely. This is a marathon and for now Sony have lost sight of the pacemaker and need to focus on what they are doing.

Sony will never throw in the towel. They are like the energizer bunny. They won't quit till someone drops a bomb on them.

 

It is obvious Sony are losing alot of money right now. They were eating so much money last year with having to drop PS3 price for it to acually sell and boy were they losing alot of money despite thier claims

But in the long run they hope to be making it back.(obviously)

 

@zen

Is that 2 billion profit for Nintendo what you expect them to make this year?

I overall agree.

Just remember Sony PS3 is selling good (ok let's forget NPD May ...) outside Japan and believe they will still provide special offer (bundle) for the end of the year or even a little price drop (50$ at max).

Neverthless, A 100$ price drop seems impossible.

I think you wont see a 75 cent drop on PS3 this year. Let alone $50.

Unless they are willing to lose even more money, but it wouldn't suprise me.