Strategyking92 said:
Well, I don't think sonys long term strategy was "have our console lose billions of dollars and be in third place". Though they did get the blu-ray part out of it, but it still hasn't really overtaken dvd yet, and won't for a couple (or more) years. You could also add the lackluster support for HD-DVD to begin with for blu-ray winning.
By entering competition 14 months later they knew they'd be behind the Xbox for a long time. Maybe the Wii came as a surprise, but it does not compete in the same media hub market. As for the money: they knew exactly how much it did cost each console and how much they had to sell it for, so they knew how much they were going to lose. The PS3 will break even after the move to the 45nm chips that will happen most probably in July. These chip fabrication roadmaps are usually planned years in advance.
That early strategy went out the window with the 40GB PS3 and the removal of backwards compatibility. They did not seriously consider the possibility that they would cut the price $200 and recenter the main SKU at $400 or 1/3rd lower in price when they did. (The 20GB was never released in many markets and it was never the main SKU as it was deliberately withheld in short supply) So in short they sold fewer consoles than they expected to and they lost more money on those early units than they expected to.
Microsoft does break even on the pro, and makes a small profit on the elite, while their only losses on selling consoles are with the arcade, which are small.
This basically means that they are making money with the overpriced HDD add-on, but most of the boost in sales since last August came from the lowered priced Arcade. Sony probably makes money from the controllers, remotes and other accessories too.
All add-ons are overpriced, and it the case of the HDD add-on it makes sense for a technically illiterate population.
This goes on while sony constantly loses money on every ps3, and they can't even afford a price cut! But I see you italicized calculated so what I typed is probably useless.
As I said, there's no reason why they should not know back in 2005 what the costs would be.
Componenets like D-Ram are a commodity, and as much of their business is centred in Japan those costs rose when the Yen took a hike.
Can't comment about the console gap, but I think there is a 2 million+ difference from launch now?
Indeed there's, because the 360 sales accelerated since last price cut, that moved it into a comfort zone price-wise. The PS3 is still overtracking it and has still to have the equivalent price cut. As I said, that will only happen after the move to 45nm, so between summer and holiday season, I guess.
After that, we'll see what happens of the gap, but even if it were to never close, what difference exactly does it make to Sony? Money will come from software, and software sales are going well. At this point the PS3 has to be treated on equal grounds by developers, and that's all the marketshare they needed while selling at a loss.
For example take the Gamecube: it was dead last in sales by a much worse amount and still turned a nice profit for Nintendo in the end. The worst thing the GC caused was to push Nintendo on the side of the playfield, and that's not happening for Sony with the PS3.
The Xbox 360 and PS3 have both had a 33% price cut, at least in the U.S. (300 Core - 200 Arcade) 35% in the U.K for the Xbox 360 Arcade. The problem with the comparative graph is that theres an assumption that the Xbox 360 will stop selling one year before the PS3. If you cannot make that assumption then its foolish to use it. Furthermore Nintendos own 1st party are immensely more profitable than Sony's, especially now as Sony seems hell-bent on producing some of the most expensive games this generation.
But to the main point, why I think that sony fanboys saying everything'll be alright in the future is becasue they have been saying it ever since 2005, and they never learn! That guy was just a textbook example. But no, this was not just it either. I guess it's just the total hypocracy of some of them that I have constantly seen since I've joined this site. Usually it's worse than gamespot.
Well, fanboys will be fanboys. But the poster to which you responded moved the "future" keyword into business terms, and that was a worthy point.
If one keeps looking to the future, then the day to become accountable is also forced into the future as well. Xbox 360's and the PS3s business plan even more so were terrible. They both failed, and no justification can explain away how much Sony lost in their Playstation business and the brand.
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