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Forums - Sony Discussion - iSuppli: Sony not loosing too much money with the PS3 these days

gamelover2000 on 12 December 2009
ClaudeLv250 said:
letsdance said:
ClaudeLv250 said:
iSuppli, iSuppli....

Aren't these the people that had Wii and 360 selling negative units? I know this name is familiar because I'm pretty sure it led to the posting of that one pic with the idiot in the party hat drawing a wacky graph.


They never posted anything about sales.

I just found it (love the new search feature): http://www.vgchartz.com/forum/thread.php?id=17412

Here's their little gem:

According to iSuppli, the Wii will reach 30.2 million installed units in 2008, up from 18 million in 2007, thereby placing it ahead of the 25.7 million users the firm projects for Xbox 360 in 2008, and the 20.3 million for the PlayStation 3.

However, iSuppli's projections show the PlayStation 3 ultimately having the largest worldwide install base in 2011, exceeding that of the other two next-gen consoles. According to the firm, the PS3 will see 38.4 million users in 2011, growing significantly from a total of 10.3 million in 2007.

Overall, iSuppli says the percentage of the installed base will distribute quite evenly by 2011. The firm says the PlayStation 3 in 2011 will account for 35.4 percent of the installed base (38.4 million), while the Wii will take 34.8 percent (37.7 million) and the Xbox 360 will be at 29.8 percent (32.3 million).

Now I remember why these people aren't credible. They constantly daydream of an alternate reality where Sony is much better off and then proceed to prophecize it without any real rhyme or reason. No one can tell them otherwise, not even reality, so when their predictions ultimately don't come true, they either alter them accordingly for the near future for find something else to spin in Sony's favor. They're like a subsidary of the SDF.

Even so, that thread spawn such classics as these:

These still make me say ROFFLE!

ROFL at the graph with the Wii xD



Currently playing: MAG, Heavy Rain, Infamous

 

Getting Plat trophies for: Heavy Rain, Infamous, RE5,  Burnout and GOW collection once I get it.

 

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slowmo on 12 December 2009
riecsou said:
let us take it like that:
They loose $36 dollars for every PS3 sold.
They make $12 dollars for every game sold (this is just my supposition, I mean if a game sells at $60, sony should make at least %20 percent of that money).
Meaning if a PS3 owner has exactly 3 games (and there are people who have way more), they are not loosing any money and for every new game that PS owner buy, they are making $12.


What about every console sold with no games, consoles bought as replacements for laser and YLOD faults, consoles that are sold at a cut price to companies for free gifts.  There is also the small matter that not all games make the same amount of money as they have to recoup development costs if they're first party before they make any actual profit, also Sony would get less cut for third party games, which given most of the huge selling titles on the format are, offsets this too.   Finally every game bundled will cost Sony money too hence cutting profits.  Is PSN actually self funding? 

Ultimately in the future what you say is true, Sony should make money back on almost every console sold but short term they lose money to make it back at a later date.   



NJ5 on 12 December 2009
riecsou said:
let us take it like that:
They loose $36 dollars for every PS3 sold.
They make $12 dollars for every game sold (this is just my supposition, I mean if a game sells at $60, sony should make at least %20 percent of that money).
Meaning if a PS3 owner has exactly 3 games (and there are people who have way more), they are not loosing any money and for every new game that PS owner buy, they are making $12.

No. It means that they are making a gross profit, but not a net profit (i.e. profit after taxes, paying employee salaries and lots of other expenses).

 



My Mario Kart Wii friend code: 2707-1866-0957

riecsou on 12 December 2009
NJ5 said:
riecsou said:
let us take it like that:
They loose $36 dollars for every PS3 sold.
They make $12 dollars for every game sold (this is just my supposition, I mean if a game sells at $60, sony should make at least %20 percent of that money).
Meaning if a PS3 owner has exactly 3 games (and there are people who have way more), they are not loosing any money and for every new game that PS owner buy, they are making $12.

No. It means that they are making a gross profit, but not a net profit (i.e. profit after taxes, paying employee salaries and lots of other expenses).

 

Don't the "taxes, paying employee salaries and lots of other expenses" part of the $336 price?



NJ5 on 12 December 2009
riecsou said:
NJ5 said:
riecsou said:
let us take it like that:
They loose $36 dollars for every PS3 sold.
They make $12 dollars for every game sold (this is just my supposition, I mean if a game sells at $60, sony should make at least %20 percent of that money).
Meaning if a PS3 owner has exactly 3 games (and there are people who have way more), they are not loosing any money and for every new game that PS owner buy, they are making $12.

No. It means that they are making a gross profit, but not a net profit (i.e. profit after taxes, paying employee salaries and lots of other expenses).

 

Don't the "taxes, paying employee salaries and lots of other expenses" part of the $336 price?

No, at most those $336 include the taxes on the materials used to make the PS3, and the salaries of the manufacturing employees. But Sony employs lots of developers, sales people, etc. And they pay taxes on other stuff, blah blah.

 



My Mario Kart Wii friend code: 2707-1866-0957

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drkohler on 12 December 2009
FinalEvangelion said:
outlawauron said:

Most retailers may at most $4 or $5 off of hardware.

That's about right.  About $3-5 from what I remember working retail.  They only sell the console to attract customers to buy thinks like controllers, accessories, and HDMI cables (which retailers make massive profit).

Shipping costs probably me it closer to $50 per console.  At this point, they are probably spending more in promotion and marketing.

ok.. full stop here. Let's leave guesses out and talk some common sense:

1. Once again USA =/= TheWorld. Consoles in Europe/Everywhere but NA sell as standard electronic consumer goods in the lower/middle price cathegory. Shop margins vary from country to country but you can take an average of 20% in this cathegory as a good estimate (of course shop margins are company secrets and you won't get an answer if you ask). This margin might be considerably higher in Japan as this is (was?) a higher-price country.

2. Shipping costs are almost irrelevant in the equation. A standard shipping container currently costs around $5000 to ship from China to somewhere else. Look up the size of a standard container in the internet and calculate how many 1000s of consoles you can fit into a container. Sony (as a regular mass exporter of electronic goods) probably owns (some of) the containers and some container ships so their costs per container may even be significantly lower.

3. I checked the isupply price breakdown and I like it much better than their first one (which was almost complete and utter bullshit as far as mass manufacturing costs are concerned). They got most of the stuff right (although estimating numbers into the cent range is nonsense). The things that are off are the price of the harddisk (a single platter hd costs around $25 when ordered correctly) and the price of the blu-ray drive is only half of their quote (since they say they don't include royalties in their breakdown. Much of blu-ray drive costs is royalties - some of which Sony might not have to pay).

4. Promotion, marketing and software personnel costs obviously do not go into a manufacturing price breakdowm, so we can say that the current manufacturing costs are around $300-$310 for a PS3 console (an unknown variable is the NVdida chip which is rumoured to have been way,way overpriced but that contract had ended this year and Sony hopefully has a better contract now).

5. How much money does Sony lose per PS3 sold? - that is a very difficult question which depends on the sales area. Marketing, personnel costs, promotional stuff, intercompany costs (you do know that Sony USA/Europe technically buys all the consoles from Sony Japan, don't you?), currency fluctuations turn the equation basically into a coin toss. My guess is that Sony loses heavily in Japan, a little in NA and almost nothing in Europe.



Tallgeese101 on 12 December 2009

People are mad if they think that if it costs $337 for Sony to manufacture and retailing in shops at $300 they are losing only $37 per console.
Transportation
Retailer margin (5-10%?)
Tax

I would say somewhere between $75-$100 direct cost to Sony.



riecsou on 12 December 2009
NJ5 said:
riecsou said:
NJ5 said:


N.Genckel on 12 December 2009

lol, that's great.



Check out my DS site.

DaBuddahN on 12 December 2009

I believe a huge chunk of money is lost in the PSN. Maintaining that for free cannot be easy. Didn't they have an article not too long ago that they networked division lost about 5 billion dollars? That's a lot of money!