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Forums - Sony Discussion - How are Sony losing so much money on gaming?

8888brocoli123 said:
Sony is losing way more than $50 per ps3 sold. With the recent price cut, Im sure that the losses are a little more than $100 per ps3. Just look at the latest financial report (Q2 2009 I think), the ps3 division ( including other products) loss more than 600 million dollars. Nobody now if their first party games did recover the production cost, Uncharted could have sold 2 millions copies, but we dont know if the game was profitable.

With a $20 million budget it's almost certainly made millions in profit already.



 

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BoneyBoy said:
@icyedge - Sony is nowhere near making money on the ps3 bro.

In their earnings report last quarter sony said hardware is NOT profitable and they lose 10-20% of the retail cost. The psp and ps2 are profitable. The ps3 losses are eating up all their profits.

Sony does not expect their games division as a whole to be profitable until 2011.

http://kotaku.com/5408318/sony-outlines-gaming-turnaround-sees-ps3-profitability-in-2011

What I said wasnt a point of view, it was a CEO statement.



Icyedge said:
BoneyBoy said:
@icyedge - Sony is nowhere near making money on the ps3 bro.

In their earnings report last quarter sony said hardware is NOT profitable and they lose 10-20% of the retail cost. The psp and ps2 are profitable. The ps3 losses are eating up all their profits.

Sony does not expect their games division as a whole to be profitable until 2011.

http://kotaku.com/5408318/sony-outlines-gaming-turnaround-sees-ps3-profitability-in-2011

What I said wasnt a point of view, it was a CEO statement.

Link? Please...



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder

heruamon said:
Icyedge said:
BoneyBoy said:
@icyedge - Sony is nowhere near making money on the ps3 bro.

In their earnings report last quarter sony said hardware is NOT profitable and they lose 10-20% of the retail cost. The psp and ps2 are profitable. The ps3 losses are eating up all their profits.

Sony does not expect their games division as a whole to be profitable until 2011.

http://kotaku.com/5408318/sony-outlines-gaming-turnaround-sees-ps3-profitability-in-2011

What I said wasnt a point of view, it was a CEO statement.

Link? Please...

LOL, are you joking or what. I posted links just a few post ago.



Icyedge said:
heruamon said:
Icyedge said:
BoneyBoy said:
@icyedge - Sony is nowhere near making money on the ps3 bro.

In their earnings report last quarter sony said hardware is NOT profitable and they lose 10-20% of the retail cost. The psp and ps2 are profitable. The ps3 losses are eating up all their profits.

Sony does not expect their games division as a whole to be profitable until 2011.

http://kotaku.com/5408318/sony-outlines-gaming-turnaround-sees-ps3-profitability-in-2011

What I said wasnt a point of view, it was a CEO statement.

Link? Please...

LOL, are you joking or what. I posted links just a few post ago.

LOL..you're joking right...the link provided nothing saying PS3 was profitable. 



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder

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heruamon said:
Icyedge said:
heruamon said:
Icyedge said:
BoneyBoy said:
@icyedge - Sony is nowhere near making money on the ps3 bro.

In their earnings report last quarter sony said hardware is NOT profitable and they lose 10-20% of the retail cost. The psp and ps2 are profitable. The ps3 losses are eating up all their profits.

Sony does not expect their games division as a whole to be profitable until 2011.

http://kotaku.com/5408318/sony-outlines-gaming-turnaround-sees-ps3-profitability-in-2011

What I said wasnt a point of view, it was a CEO statement.

Link? Please...

LOL, are you joking or what. I posted links just a few post ago.

LOL..you're joking right...the link provided nothing saying PS3 was profitable. 

 

The links state that a CEO said that they were able to cut cost by 70% of what they were originally after releasing the slim PS3. If cost was 800$ at first 70% off would mean 250$. Anyway I was reporting, click on my link to go to wikipedia ps3 page. Go at the last point called manufacturing cost, its written and theres also reference to 3 different articles stating the exact same thing I just said.  I was reporting this information, and like I said before actual cost has never been reveiled so its not sure that this is the exact numbers. Next time please read complete article before arguing.

http://en.wikipedia.org/wiki/PlayStation_3

http://gamersyndrome.com/ps3/ps3-cheaper-make/

http://www.1up.com/do/newsStory?cId=3175396

http://kotaku.com/5327066/sony-ps3-manufacturing-costs-down-70-percent



^ It depends from what point he was measuring. Its a useless metric as the cost per PS3 as an average or per unit is different for the 1st, 50th or 500,000th one that rolled off the line.



Tease.

@ Icyedge

There is no argument...since you haven't posted any links to answer the question asked, which was that the PS3 is profitable.  The CEO never made any such statement, so next please READ new sources, before you try to correct me. 

-       Howard Stringer is the CEO and Chairman of Sony, and he man who made those statements in your links is Nobuyuki Oneda, and he is the CFO. 

-       It’s interesting that Kaz Harai, who is the Head of the Networks Division, which Playstation falls under seems to think otherwise, and talked about how the Playstation ecosystem was breaking even, even if on the hardware side, it wasn’t there yet.  Of course, that was also his division posted a $654 billion loss.

-       Also, in May 2010, the before mentioned CFO said PS3 was still costing 10% more to produce, than its sales price…which at the time was $399.  3 months later, they had supposedly shaved this down for you to believe it cost them only $250 to make, which is entirely possible, I guess. http://www.andriasang.com/e/blog/2009/05/15/sony_ps3_profitability/

-       This site also has an article pointing outlining how Sony each Slim cost Sony $100 in losses, and they hope to lower the production cost thru volume.  Maybe that is why Sony placed such a huge order, but that doesn’t erase the fact of the cost as of now.  http://www.andriasang.com/e/blog/2009/08/20/ps3_losses/

So, once again, please show me a link where the CEO…errr…any Sony executive is saying that the PS3 is breaking even.  The console was cost Sony BEFORE the price, and that’s not going to change for a while.  The 360 will get another price cut next year, and Sony will have a choice of trying to get to breakeven or further financial losses to keep pace…somehow, I think M$ will be smiling either way.



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder

Who cares if they loose money on the console itself ? The business model was always to earn money on software and peripherals, not on the console itself.

Kaz Hiraï stated multiple times that the playstation business (as a whole) was profitable... I doubt it's different now that the PS3 sells hundreds of thousands every week...



http://www.zdnetasia.com/news/business/0,39044229,62054061,00.htm

Per this link, sony has not seen a loss in over 14 years before 2009. So all those saying how 

they are going bankrupt and losing money made over 2 console cycles must have never taken the 

time to read up on the company itself. They have invested tons of money into R&D in the

PS3, they did not do this as the last 'hoorah', they did it because they have the cash to do

so. They are an electronics giant that has invested in everything from insurance, the movie 

industry, education, and recently most large sporting events. They are far from 'broke' they

can stand to loss a little money now to reap greater gains later.

http://www.sonyfh.co.jp/en/company_e/about_us.html

Instead of making false claims about a company that you may not care for, you could have

taken that energy to learn more about the company instead of throwing more FUD.