To the people saying 10 year plan, understand this: Sony always used that as a for of smack talk and hype. The PS2 is lasting for a very long time (7 or 8 years) so Sony believed that the same would be true of the PS3 becuase "lol we're Sony". Now that the PS3 isn't preforming like the PS2 it's not very likely it will live past year 5 or 6. Sony keeps saying it rather then say they were wrong.

Sony could support the system for 10 yrs but no one is that dumb. Much like the Cube, Xbox and N64, sales will level off at about year 5 or 6, maybe earlier. They can keep making games for it, but most people will have moved on, and like many games made towards the end of the console's life, they wont sell well. Look at the gamecube for example. It's best selling games were within the first three years:Mario Sunshine, Super Smash bros Melee and Mario Kart Double Dash.

Let's look at it another way.

First thing is first, we are basing this assumption off the possibility that by 2010. BluRay will have generated 30 billion in revenue.

30 billion x 10 percent licensing.

3 billion x .25 (assumed Sony's BOD cut) = 750 million.

So there we have it. Sony would get 750 million based off of BluRay licensing alone.... but the BluRay royalties (as you said earlier) is not enough to cover the process of research, promotion and transitions it took to implement the format to almost everyone of their products. Which brings me to this.

As of 2007 Sony accounted for 20% of the BluRay market share and will in all likely hood increase.

Sony says they plan to get 50% market share, we all know that's nigh impossible. I'll go with a honest 32% market share because they're banking on the format more than anyone else. So if we count 30% from the 30 billion dollars of revenue as Sony's market share, we'd be getting 9 billion dollars of revenue. I'm not sure how much profit is in that 9billion, but I'm guessing that the PS3 costs would be worth it given the potential profits they can get from BluRay in general. Also, none of this includes PS3 game royalties, PS2, and PSP sales. Sony expects 1 trillion yen of total sales with items implemented with BluRay tech by march 2009.

Didn't you have a problem with my quote:

"The reason companies like Sony push formats like Blu-Ray has nothing to do with the money they make (directly) from Blu-Ray. The reason they push it is because a new format provides a need for new hardware (like Televisions and surround sound systems), and encourages people to re-buy the same movies they already own ..." 

Now, being that most Blu-Ray hardware that is sold is the PS3 then it is unlikely that the sales of Blu-Ray hardware will help much towards making the PS3 profitable. This means that the sales of movies and related hardware are the primary factors for Sony to be profitable off of Blu-Ray; since its fair to assume that they only make slightly more money off of selling new movies on Blu-Ray compared to selling the same movies on DVD it would be fair to say that the most profit is generated off of selling old movies that people (may) already own.

Basically, WHAT I SAID INITIALLY WAS TRUE and you objected because it was not amazingly optimistic about the value of Blu-Ray. The interesting thing is that these profits would have been generated by Sony regardless of which HD format became popular so it was moronic for them to push Blu-Ray so hard.

You're wasting your time, HappySquirrel. The vast majority of the people in this thread have never even read a financial report... They are not really discussing company financials at all. They are simply posting what they WANT to see happen (and that includes a lot of anti-Sony posters as well as pro-Sony ones). Unfortunately, that describes most debate on the Internet. There are only a handful of people on this website that actually run projections to come up with sales number predictions. Most people just state whatever they would like to see come true.

I've never seen much evidence that Sony will make windfall profits from Blu-ray sales either. But it's impossible to tell that to most people. It's not even worth the time trying.

The thread is titled "Perry: "Sony has no chance of making money on the PS3"" and somehow, M$ haterz have attempted to turn it into how M$ is going down...some of you people are REALLY just F%$%king clueless...

M$ makes more profit in one quarter than Sony makes in a year, so there is NO competition. M$ had reduced it's cash balance because of dividends and other acquisitions, not because it was losing money. If shifted from a growth company to a blue chip, where dividends became the source of why you hold the company. Do some research and acutally TRY to get a freaking clue before posting absolute rubbish. AS far as competition...it's great as it motivates you...check out what competition for Intel did for processors, and it's competitor in AMD...lol.

Sony, on the other hand, PUBLICLY stated that blew-ray was central to the companies strategy for growth, and the format is failing to take root as fast as they had hoped/ DVD is going to get another tech boost in the next couple of years to make it more viable and Sony will continue to loose money. You have a game maker Executive making statements on PS3, vice raving fanboys who don't even know how to find M$ balancesheet...yeah..who's more reliable here...lol.

seeing as how you insulted a lot of people there heruamon, you certainly aren't the reliable one.

bbsin.... why do you think the Blu-ray liscense is steeper? Everything i've heard suggests it's a lot less then DVDs and that's a reason companies are pushing HD sales... becuase the DVD lobby had movie companies and DVD manufactuers over a barrel when it came to liscenses.

The Blu-ray royalty rates are thought to be a lot smaller over the lifespan.  Even if you attribute the whole blu-ray to PS3. (including all the costs invovled with the blu-ray victory mind you if your including all the profits.)  It's not likely to make back money anytime soon unless it breks the PC barrier.

http://news.cnet.com/8301-10784_3-9874317-7.html?tag=nefd.lede

i rate this like a 3  out of ten stop being so negative and there is already one just like this

I believe the royalties are steeper because the technology is far more advanced than DVD. There are many codecs, security and BD-live that the format's business model wouldn't be practical to the BODs if it weren't that high. After all, it's those 18 companies that put in all those resources for promotion, features and research, do you think they would do so much if their cuts were less than that of DVD? As a matter of fact, I think BluRay would have defeated HDDVD much faster if it weren't for the licensing fees being so high, it could be another reason why the technology itself is still pretty expensive. Also, the top members of the BDA are either providers of technology, promoters or top movie studios. BluRay essentially already had all the pieces on the top to succeed, lowering the licensing to get more supporters that were already going to join doesn't make any sense, to me atleast.

The way the entire HDDVD v BluRay war panned out made it seem like the BDA snuffed out HDDVD and forced every other company to chose it as the only option. At that point it would either be join BDA and earn some/little money or don't join BDA and get nothing.