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Forums - Sony Discussion - PS3 a faster money sink than the Xbox? I can see why no price cuts soon.

*bleu-ocelot* on 20 June 2008
NJ5 said:

Let's just say that during the PS3 era, Sony's game division has already lost more money than they made during the whole PS2 era. That alone will tell you how likely it is for them to make their money back. Not even a PS2-like success would make the PS3 profitable at this point.

 

Another 5 years of profitbility for the PS3 will make up those numbers,along with the PS4 at a profitable,appealing $399.99 pricepoint.

 



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TheBigFatJ on 20 June 2008
NJ5 said:
dallas said:
So Sony has had some losses w/ the PS3? Big deal, the addition of the Blu-ray drive has allowed Sony to get some fat coin from the Blu-ray related business. Bd is already selling at 10% of the physical media market in america so that means that for every 9 dvds sold, there is one Blu-ray movie sold. That is a pretty big thing if you ask me.

Source please? I have never seen this 10% figure before. I did see something like "5-10% out of the sales of the top-selling Blu-Ray movies", which is very different.

 

 

http://www.nxtbook.com/nxtbooks/questex/hom042008/#/2

If you look here, you'll see 5% for one week in April, but that's only comparing the top-20 of DVD and top-20 of BD.  That's obviously HUGELY favorable to BD and especially on non-launch weeks were thousands of DVDs are selling about equally well.



NJ5 on 20 June 2008
*bleu-ocelot* said:
NJ5 said:

Let's just say that during the PS3 era, Sony's game division has already lost more money than they made during the whole PS2 era. That alone will tell you how likely it is for them to make their money back. Not even a PS2-like success would make the PS3 profitable at this point.

 

Another 5 years of profitbility for the PS3 will make up those numbers,along with the PS4 at a profitable,appealing $399.99 pricepoint.

 

"Another" 5 years? There hasn't even been a single profitable year yet. There was a profitable holiday quarter which was most likely due to software sales volume and the help of PS2/PSP.

Regarding the PS4, that's another story entirely, and one we can't even begin to analyze yet ;)

 



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Kasz216 on 20 June 2008
leo-j said:
Kaz never said that they will start making a profit by end of 09, he said that by the end of this year the ps3 will start making a profit.

 

No. he said by the end of the year he expects the PS3 to be breaking even per unit.  For some reason a lot of people took it as "by then all the losses will be erased and we'll be making money on the generation."



slimeattack on 20 June 2008

I don't think the 360 will see a price cut either this year. They have just broken even, and they can't afford any losses.



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Kasz216 on 20 June 2008
rocketpig said:
Million said:
Well microsoft didn't win a format war with their console neither does the console encourage the sales of their other products i.e PSP , HDTV's

PSPs don't count. That product is also part of the games division.

As for Blu-ray, the PS3 has definitely helped that gain traction. Time will tell how it all pans out for Sony.

HDTVs, I'm not so sure about. I think those would be selling anyway. It's possible that the PS3 has marginally helped sales but given consumer trends, I think it would have happened anyway.

Still, $3.4b is a lot of money. It's going to be very difficult for Sony to get that back from the PS3 itself.

Anyway, both Sony and MS had their heads jammed pretty far up their asses when they started this generation. I don't see how either of them ever expected to turn a profit.

 

Yeah... nearly 50% of PS3 users use the Blu-ray function to watch a movie at least once a month according to NPD. Which I believe makes PS3 more popular then every other Blu-ray player combined as far as systems used to watch blu-rays on.

Still... the Blu-ray market isn't catching on nearly as fast as expected... it might never beat out DVD.

The HDTV thing seems backwords.  I guess free PS3's were given away with HDTVs so maybe?

 



rocketpig on 20 June 2008
slimeattack said:
I don't think the 360 will see a price cut either this year. They have just broken even, and they can't afford any losses.

A lot depends on how quickly MS gets 65nm chips (Jasper or whatever it's called) into 360s. If they do it in the next three months, a price cut is likely IMO.

MS can't keep the 360 at this price forever. They've gone 30 months with one $50 price cut in America.




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Kasz216 on 20 June 2008
rocketpig said:
slimeattack said:
I don't think the 360 will see a price cut either this year. They have just broken even, and they can't afford any losses.

A lot depends on how quickly MS gets 65nm chips (Jasper or whatever it's called) into 360s. If they do it in the next three months, a price cut is likely IMO.

MS can't keep the 360 at this price forever. They've gone 30 months with one $50 price cut in America.

 

I don't know they might... it seems that once they saw Sony wasn't going to win this generation they went into "Prevent D" mode and just worried about profits instead of sales.

To me I think their priority list goes.

1) Sony not winning (Or anyone trying to make a living room hub insead of a game console.)

2) Profitability

3) Console Race



Kasz216 on 20 June 2008
starcraft said:
dallas said:
So Sony has had some losses w/ the PS3? Big deal, the addition of the Blu-ray drive has allowed Sony to get some fat coin from the Blu-ray related business. Bd is already selling at 10% of the physical media market in america so that means that for every 9 dvds sold, there is one Blu-ray movie sold. That is a pretty big thing if you ask me.

Blu-Ray revenues have to be split between the dozens of members of the Blu-Ray forums.

Also, Blu-Ray itself would have cost billions to develop, a cost that wouldn't be reflected in the game division losses.

Add to that the fact that the moment the Blu-Ray market gains any traction piracy will ramp up exponentially in a way DVD never faced early on, and the threat of downloads, and you have the very real possibility Blu-Ray succeeding wont have been worth the sacrifice of the gaming division for Sony.

 

Though Sony does get the biggest chunk of that... 30% is a decent amount of that change... well once Blu-ray starts rolling.

I'm wondering where Dallas gets 10% of the physical media market though. That seems way off from everything i've read.

They were projecting 15 million total Blu-ray movies sold this year when things were looking good before Blu-ray hit it's big stall... vs something like a billion worth of DVD sales. (They ship like 1.7 billion DVDs a year.)

If it weren't for PS3's though... Blu-ray would already be a flopped format. It and HD-DVD both would of went the way of the Laserdisc already.

The biggest problem is that nobody is buying the cheap blu-ray players.  They are all buying the HD ones.  Which suggsests that the only people buying into blu-ray are still the very early adopters.  The tech nuts and movie nuts.

Them and the people who own PS3s.



drkohler on 20 June 2008
starcraft said:

For more information on why I'm right and your wrong, hit the link:

http://www.vgchartz.com/forum/post.php?id=886560

This link of yours points to a (badly researched) article from early May that quotes from data from last fiscal year. Almost to the end of last fiscal year, Sony sold the rest of first generation PS3s and the remainder of 2nd generation PS3s, as well as 3rd generation PS3 (40G units). We can estimate the loss for a 1st generation PS3 to be around $400 and around $200 for 2nd generation PS3s and considerably lower for 40G units. This results in rather heavy losses at the end of last fiscal year. Manufacturing costs for latest generation of 40G PS3 in production now can be estimated to around $350 (+10%/-5%). As the PS3 currently sells at over $600 in Europe/Oceania, an the PS3 sells best in those regions, it could very well be that already now, the PS3 manufacturing is roughly dept free. So it could very well be that PS3 production is profitable from this new fiscal quarter on, maybe even significantly when increased software sales are taken into account.