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Forums - Sales Discussion - Is PS3 profitable?

PalmiNio on 31 January 2009
786_ali said:
yes it is profitable if you include the software... Sony has said that themselves

Yeah and companies never lie or twist number

 

Blind fool

 

The comment made buy Sony can be all software sales combined not only PS3.



Predictions for 2009:

360: 39-42 PS3: 31-34 Wii: 67-70

Future projection

Wii will hit 100 million before christmas 2010 (made december 2008)

NDS Family will have sold and shipped more then PS2 at the end of 2009 (made january 2009)

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Demotruk on 31 January 2009

For operating profit, it is fair. For a return on an investment, no. In that sense, of course the PS3 is unprofitable. Extremely unprofitable.



A game I'm developing with some friends:

www.xnagg.com/zombieasteroids/publish.htm

It is largely a technical exercise but feedback is appreciated.

TWRoO on 31 January 2009

No it is not... not even including software.

@786_ali... Sony stated a couple of months back that they HOPE the PS3 business (HW+SW) can be profitable in Europe by the end of this fiscal year.

Which means it will be roughly break-even around March if they are lucky, but only in Europe.



scottie on 31 January 2009

Not even close

We know according to the most recent isuppli estimates that Sony loses at least $150 on each unit of hardware

$448 on parts costs + assembly costs + shipping costs + $50 to go to the retailers + ongoing R and D to improve the system + testing costs for these improvements. And that's not even considering costs associated with advertising or with repairing PS3's under waranty

We know that in the Christmas quarter, they made a small profit on the combination of 6 factors
PS3 hardware losses
PS3 software/accessories profit
PS2 hardware profit
PS2 software/accessories profit
PSP hardware profit
PSP software/accessories profit



PalmiNio on 31 January 2009
scottie said:
Not even close

We know according to the most recent isuppli estimates that Sony loses at least $150 on each unit of hardware

$448 on parts costs + assembly costs + shipping costs + $50 to go to the retailers + ongoing R and D to improve the system + testing costs for these improvements. And that's not even considering costs associated with advertising or with repairing PS3's under waranty

We know that in the Christmas quarter, they made a small profit on the combination of 6 factors
PS3 hardware losses
PS3 software/accessories profit
PS2 hardware profit
PS2 software/accessories profit
PSP hardware profit
PSP software/accessories profit

 

Exactly, it is that simple.

If PS3 SW/HW was combined profitable that would mean that SW/HW from PS2 and PSP more or less made no money.

 

Exa



Predictions for 2009:

360: 39-42 PS3: 31-34 Wii: 67-70

Future projection

Wii will hit 100 million before christmas 2010 (made december 2008)

NDS Family will have sold and shipped more then PS2 at the end of 2009 (made january 2009)

Around the Network
papflesje on 31 January 2009

@ scottie: I'm pretty sure that the PS3 isn't profitable, so I won't challenge that comment made by anyone, but you going by the isupply estimates is just a big no no. Seeing how they were blatantly off with their previous guesstimates, I'm not holding any relevancy to their "new" claims about the PS3.



scottie on 31 January 2009

@ papflesje - This is true, the isuppli numbers are dubious.

Do you however accept that Sony makes profit on the 5 other things I mention, and thus because they only made a tiny profit during the xmas quarter they are losing as much on the PS3 as they are making on the PSP/2



papflesje on 31 January 2009

@ scottie: Well, I think they said that (and I think people here have checked that against old numbers from last year and such) PS2 / PSP serves to offset PS3 losses.

So when PS2 and PSP perform badly, the PS3 basically has to perform badly too because otherwise losses are even higher I thought.

To conclude: yeah, PS3 hardware + ad campaigns (however small and lousy) = PS2 + PSP + PS3 software (and online revenue too, unless that is part of a different department?)



misterd on 31 January 2009
frybread said:

I just remember this old interview,

----------------
You have spent three billion dollars on the Playstation 3, disregarding research and development. Can you ever get your money back?

Stringer: Not for as long as I live (laughs). It will certainly take some time. The traditional business model for the Playstation envisaged us making a loss with the hardware in the early years until the production costs had decreased to a point that enabled us to break even. In the meantime, we earn money with the games. We are currently at the stage in which we need to get a grip on the production costs. That takes time. We are already making more money with the games than we are losing with the hardware.

http://www.welt.de/english-news/article2358382/Future-of-Sony-Ericsson-uncertain.html
-------------

That's also the quote cited above about how it's earning more on software than losing on HW.  Question: Is it fair to disregard R&D? Did Sony spend a lot on developing PS3?

And that's why it' important to define profit.

Sony may be making a profit off the PS3 now on a month-by-month basis, but it isn't even close to recouping the losses it suffered over the console's lifetime.

 



Lolcislaw on 31 January 2009

No it's not, producing PS3's still costs more, plus there are many more costs that people are forgeting about like storage, shipping , advertising. Plus remember that Sony bundles any big release with their console which also does cost . Therefore even if Sony further reduces costs of manufacturing they still might not be able to break even. Especially after the possible pricecut.

 

Software is profitable, Hardware is not.