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Forums - Sony - PS3 making more money on games than they lose on hardware.

disolitude on 28 August 2008
theprof00 said:

the op does not mention 360.

I think what the point is, if there is one, is that sony might be making better margin than 360?

or maybe 360 spends too much money on the games that come out for it?

i dunno, it seems silly. my original response to the op would be, "nice, it seems they at least know what direction they are supposed to be going in. "

 

That reply work works if you agree with the op. I don't agree that sony is making enough money off PS3 games to cover PS3 cost...PS2 and PSP are the lifesaver here.



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Zuhyc on 28 August 2008
disolitude said:
theprof00 said:
why did this turn into a ps3 vs 360 thread.
who cares guys!?!
the ps3 is doing better this month than last month, and last month than the month before, and the month before. give it up!

Please read clearly about points being argued. The op states that Sony is pulling enough money from PS3's games to justify PS3 loss.

The argument is that Microsoft sells less hardware at no loss and more games yet they still struggle to pull a profit...

Therefore the continuation of that argument is that PS2 and psp software and hardware sales help sony be profitable, not PS3 software sales.

 

If you read the interview correctly you can see he names hardware and software, without mentioning the PS3. This helps prove your point.



Yakuzaice on 28 August 2008
disolitude said:
Yakuzaice said:

Last 12 months or 2007?  Because your list doesn't fit in either.  Warhawk came out in August 2007.  And you still left out titles such as Singstar and Buzz.  Not to mention some games don't even have Others numbers.

 

 

 If games are missing others numbers then they are missing them for both MS and Sony. Also I doubt Buzz and Singstar are 4 million sellers to make a huge difference on that comparison.

Neverthless I understand that my lsit may not be accurate...I jsut listed the games I could remember. If anyone feels like adding, be my guest.

Every game you listed for MS has others numbers.  For Sony Lair, HSG5, and Folklore are missing others numbers.  Siren is only Japanese retail numbers. MLB 08 and NBA 08 were only released in the US.  Between Singstar, Buzz (only released in others so far), Warhawk (no online sales), and Eye of Judgement (no others numbers) that is another 1.15 million.  If you were going to include NBA 08 and Siren, I don't see why you would overlook another million more sales.

You also missed VP: Party Animals, Scene It, and Kingdom Under Fire for MS



Zuhyc on 28 August 2008

How can anyone believe that Sony makes a profit on the PS3 while they only make $50 million with PSP and PS2 profits! Unless things have taken a huge turn in only 2 month, but that's impossible.



tuoyo on 28 August 2008

The crucial thing to bear in mind is he is referring to the state of things today. If we say for example they lose $50 on each console sold and they sell 10million a year that means they have lost $500million. They have however made more than $500million in the year from software sales (knowing Sony executives I won't be suprised if he is including software sales of PS2 and PSP).

But what Sony fans that are getting excited about this need to realise is that it does not factor in the R&D costs or the losses from last year when the console was much more expensive to produce. That money will never be made back this gen but unfortunately too many Sony fans are too divorced from reality to realise that.



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drkohler on 28 August 2008
Jo21 said:

he mean they make software on hardware even if they sell the software at even they would still get money

sony game division being loosing money on hardware but making more on software that they loose.

@disolitude: they made profit was last quarter and they not only have one console.

Can you rephrase your sentences in a language that I (and probably others) could understand? French, German, Italian.. even English would be ok with me. I have no clue what your random assembly of vowels and consonants above try to say.

 

And for all the others that seem to have a problem with "corporate speak" of Mr Stringer, here is what he said:

1. Nintendo sells its Wii above manufacturing costs, therefore already profiting from hardware. He said nothing about Wii software.

2. The PS3 console is proftable when one considers the loss on hardware manufacturing and the gain in software manufacturing and sales. He said nothing about PS2or PSP.

 



TWRoO on 28 August 2008

I think Zuhyc has it right (and from the other thread too)

It's pretty obvious he wasn't referring to PS3 business only.... because if he was then it also means the PS2 business and the PSP business is doing absolutely horribly. (less than $50mil profit last quarter between them)



Consdidering the PS2 was making yearly profits of almost $1 billion before the PSP came out, and I believe it has had 1 price cut since then?.... it must at worst still be making them about the same kind of profit per year (likely more)

---

The guy was obviously refferring to the PS division as a whole.

So:

PS2 SW profit + PSP SW profit + PS3 SW profit/loss?
is slightly more than-
PS2 HW profit + PSP HW profit + PS3 HW loss

The PS3 HW loss is enough to mean that PS2/P profit is wiped out, and then some.

while the combined SW totals are enough to wipe out the "and then some" to make them profitable again.

So from this I think it's safe to assume PS3 software might actually be taking a loss, or PS3 HW loss is more significant than we thought. It's one or the other that's for sure.



koffieboon on 28 August 2008

@TWRoO: I doubt PS2 is still making them as much money as a few years ago since both software and hardware sales are going down. I guess the hardware drop might be compensated by a higher profit margin per unit sold, but the software part isn't going to be compensated in the same way. But of course it is still profitable and the main reason they're still making profit.



TWRoO on 28 August 2008
koffieboon said:
@TWRoO: I doubt PS2 is still making them as much money as a few years ago since both software and hardware sales are going down. I guess the hardware drop might be compensated by a higher profit margin per unit sold, but the software part isn't going to be compensated in the same way. But of course it is still profitable and the main reason they're still making profit.

While that is true... I am pretty sure the PS2 business on it's own is making more than $50million per quarter.... which is the main thing that nulls and voids the views of the OP that Stringer was only referring to PS3.

 



Jandre002 on 28 August 2008

You all really think that Sony doesn't make money on the PS3 when you balance out the cost they are losing per console (remember the new SKU) vs the amount they are making off of PSN and disc based software sales?

I think you all are wrong on that. I'd say Sony is losing at most like $15-20 per console sold. I think now, at the $399 price point and with the newer 80gb model that the PS3 as a business alone is making money. Maybe not very much money (under 50 million), but making money nonetheless.