Grampy said:
You are right no one is immune from the pain, but comparativly speaking, Nintendo is so much better positioned to weather the storm you cannot help feeling that if conditions ever get bad enough to seriously hurt Nintendo, Sony will already be history.
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That paints a very bad financial position for Sony. Those ratios and numbers look very bad for Sony in comparison to its two main competitors.
Why do people keep saying the gaming division is going to take hits >_>? As far as I know they're software brings in more money than they spend. And didn't sources say that they're just about at the breakeven point on the PS3? The money lost is not going to come back by axing area's of the gaming division. The losses on hardware are now a write off, all they can do now is keep what's profitable, and as I mentioned before, the gaming division brings in more money than they spend.
They have how many employees in they're gaming division? I could have sworn someone mentioned roughly 4,000. So yeah, that's a great idea, axe some of the 4k employees that make money out of your 180k and see where that takes you, I'm sure it ends somewhere around shit's creek >_>; The thought of them putting a huge stress on the gaming division simply because they're angry that it lost money on hardware (which lets face it, isn't the software teams fault in the least) is preposterous! They want to put a big focus on software from here on out because I dunno (uhuhurhuurhrhrurhhrur) it makes money >_>
From 0 to KICKASS in .stupid seconds.
| ChronotriggerJM said: Why do people keep saying the gaming division is going to take hits >_>? As far as I know they're software brings in more money than they spend. And didn't sources say that they're just about at the breakeven point on the PS3? The money lost is not going to come back by axing area's of the gaming division. The losses on hardware are now a write off, all they can do now is keep what's profitable, and as I mentioned before, the gaming division brings in more money than they spend. They have how many employees in they're gaming division? I could have sworn someone mentioned roughly 4,000. So yeah, that's a great idea, axe some of the 4k employees that make money out of your 180k and see where that takes you, I'm sure it ends somewhere around shit's creek >_>; The thought of them putting a huge stress on the gaming division simply because they're angry that it lost money on hardware (which lets face it, isn't the software teams fault in the least) is preposterous! They want to put a big focus on software from here on out because I dunno (uhuhurhuurhrhrurhhrur) it makes money >_> |
Sony PlayStation 3 Still Loses Money for the Company.
The PlayStation 3 Costs $448 to Build – Teardown Analysis
[12/23/2008 01:05 PM]
by Anton Shilov
Despite of earlier reports that Sony Computer Entertainment Inc. managed to halve production cost of the PlayStation 3 video game console already in 2007, according to a recent teardown analysis, the console still costs $448 to build, thus, being money losing machine for Sony. Still, it is considerably lower cost than initially.
Back in 2006 Sony PlayStation 3 20GB and PlayStation 3 60GB video game consoles cost $805.85 and $840.35 to manufacture, respectively. At that time Sony sold its consoles for $499 and $599 and lost $306.85 and $241.25 on 20GB and 60GB versions hardware alone, respectively. This year the PS3 40GB costs $448.73 to build amid official pricing of $399 in the USA, hence, Sony loses “only” $49.73 per unit.
But the reduction of the cost came at a price: the currently available PlayStation 3 40GB is not compatible with PlayStation 2 games since Sony removed appropriate components from the console when it launched it early this year. The move was heavily criticized by PlayStation fans, but it did allow Sony to tangibly boost sales of the game machine because it helped to lower the price.
The removal of legacy as well as further optimization of the design allowed SCEI to dramatically reduce the amount of components: the original PlayStation 3 60GB featured 4048 different parts, whereas the PlayStation 3 40GB sports 2820 parts, according to iSuppli company's teardown results published by BusinessWeek web-site.
The most expensive component of Sony PlayStation 3, Nvidia’s Reality Synthesizer (RSX) chip, now costs Sony about $58, down from $129 two years ago. Another important chip inside the video game console, the Cell processor, costs $46, which is also about two times less than $89 initially. The reduction of the pricing should be associated with higher yields as well as thinner manufacturing technology. Initially the Blu-ray optical disc drive cost Sony $125, its current price remains unknown.
Teardown estimates do not usually include additional costs for elements including the controller, cables, packaging, freight as well as profit for resellers, such as Amazon.
It is ordinary for game console makers to lose money on hardware, and make up for the loss via video game-title sales. Still, the size of Sony’s loss per unit is still a pity, even for the video-game console business. It is expected that Sony may reach the break-even point with the PS3 in 2009.
http://www.xbitlabs.com/news/multimedia/display/20081223130548_Sony_PlayStation_3_Still_Loses_Money_for_the_Company.html
| numonex said: Sony PlayStation 3 Still Loses Money for the Company. The PlayStation 3 Costs $448 to Build – Teardown Analysis [12/23/2008 01:05 PM] Despite of earlier reports that Sony Computer Entertainment Inc. managed to halve production cost of the PlayStation 3 video game console already in 2007, according to a recent teardown analysis, the console still costs $448 to build, thus, being money losing machine for Sony. Still, it is considerably lower cost than initially. Back in 2006 Sony PlayStation 3 20GB and PlayStation 3 60GB video game consoles cost $805.85 and $840.35 to manufacture, respectively. At that time Sony sold its consoles for $499 and $599 and lost $306.85 and $241.25 on 20GB and 60GB versions hardware alone, respectively. This year the PS3 40GB costs $448.73 to build amid official pricing of $399 in the USA, hence, Sony loses “only” $49.73 per unit. But the reduction of the cost came at a price: the currently available PlayStation 3 40GB is not compatible with PlayStation 2 games since Sony removed appropriate components from the console when it launched it early this year. The move was heavily criticized by PlayStation fans, but it did allow Sony to tangibly boost sales of the game machine because it helped to lower the price. The removal of legacy as well as further optimization of the design allowed SCEI to dramatically reduce the amount of components: the original PlayStation 3 60GB featured 4048 different parts, whereas the PlayStation 3 40GB sports 2820 parts, according to iSuppli company's teardown results published by BusinessWeek web-site. The most expensive component of Sony PlayStation 3, Nvidia’s Reality Synthesizer (RSX) chip, now costs Sony about $58, down from $129 two years ago. Another important chip inside the video game console, the Cell processor, costs $46, which is also about two times less than $89 initially. The reduction of the pricing should be associated with higher yields as well as thinner manufacturing technology. Initially the Blu-ray optical disc drive cost Sony $125, its current price remains unknown. Teardown estimates do not usually include additional costs for elements including the controller, cables, packaging, freight as well as profit for resellers, such as Amazon. It is ordinary for game console makers to lose money on hardware, and make up for the loss via video game-title sales. Still, the size of Sony’s loss per unit is still a pity, even for the video-game console business. It is expected that Sony may reach the break-even point with the PS3 in 2009. http://www.xbitlabs.com/news/multimedia/display/20081223130548_Sony_PlayStation_3_Still_Loses_Money_for_the_Company.html
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Ok, so what this is saying, is that the console is near the break even point... and the software division still makes money on it's games? Or did I miss something? The money lost is gone, it's not coming back by axing some of it's 4k employees making software >_>;; The hardware designer for the PS3 is going to get fired I'm sure :P But it's software division should be a okay.
From 0 to KICKASS in .stupid seconds.
DMeisterJ said:
If you're a Sony fan you've been fastened since "Five Hundred and Ninety-nine dollars". I'm ready to take my seat belt off. |
/bravo
Not for the sentiment really, just a well delivered post in general =P
9.9/10 - Only could have been better if I had said it first =P
 |
| To Each Man, Responsibility |
goddog said:
apple
IBM
|
walmart
mcdonalds
..you know... companies who have ceo's who care more about the company and the people whob work for it than jsut themselves
*cough* Ford, new york times *cough*
hello how are you.
goddog said:
I didnt realize that sony had more employees than MS |
I find the size of their payroll surprising and hard to explain but I found approx, the same number at several sources. This is what I see is thei bubbest problem. Nintendo's comparativly tiny payroll gives them extraordinary flexibility. It is entirely possible that they could even leverage the situation to leverage more favorable parts and assembly contracts from others.
Grampy said:
I find the size of their payroll surprising and hard to explain but I found approx, the same number at several sources. This is what I see is thei bubbest problem. Nintendo's comparativly tiny payroll gives them extraordinary flexibility. It is entirely possible that they could even leverage the situation to leverage more favorable parts and assembly contracts from others.
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Sony needs to start cutting costs and those 161000 employees must be panicking about their jobs. How many jobs will Sony cut in 2009?
People need to remember that the $3.5billion loss is for the gaming division as a whole. It includes the profit PSP and PS2 made those years. The PS3 also didn't start costing money the day is was launched. Previous years there are also R+D costs. It would be a pretty fair estimate to say the PS3 has lost at least $5billion over it's lifetime and made very very little of that back.
My guess is next generation sony will be a software only maker (Or I guess a chance the PS4 will be a budget console, after all where is the money for R+D going to come from?). Which would surely be the best situation for everyone. 1 innovative console, 1 graphical powerhouse, sony games would still get made, it would help sony out finanically in a massive way.
@Zim, and having Microsoft make that console will be a tragedy for us all >_> Thanks but no thanks. The technology that made the PS3 was made to scale really well. Sony will most likely release another console that uses existing technology, just more of it. It will be budget(ish), be plenty powerful, and will most likely never be sold at a loss.
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