PS3 Made Sony Lose $3 Billion

Discussion in 'Video Games and Technology' started by ViperDragon, Jun 26, 2008.

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  1. ViperDragon

    ViperDragon Well-Known Member

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    http://www.efluxmedia.com/news_PS3_Made_Sony_Lose_3_Billion_19509.html

    Forbes reports that Play Station 3 has cost Sony an incredible $3 billion, mainly because of the company’s pricing strategy for the product.

    As PS3 hit the market, Sony wanted to recover some of the market share that Microsoft’s Xbox 360 had gained, mainly due to its launch a year before PS3’s. Sony thought that by selling its consoles at a price that would be a little less that their actual cost, it might gain more market share and it would be able to use it to make profit for the company from exclusive gaming titles and sales of its patented Blu-Ray DVD.

    What is more, after enough units would have been sold, production cost would have dropped, and Sony would have ceased to sell PS3s at a loss.

    Even though the last predicament has come true, the unexpected success of Nintedo’s Wii console has interfered with Sony’s strategy. The company has seen its expectation of game title market domination be blown to smithereens as Wii came out with more and more exclusive titles, and its console sales soared.

    Even though the PS3 console seems to have gotten a few very good exclusive titles recently, and has shown signs of recovery during the past months, it is still a long way to go until Sony will be making a decent profit out of it.

    The Forbes report concluded: “Even if the platform is ultimately successful, it may take longer than expected to recoup the investment, resulting in a negative impact on Sony's profitability.”
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    Ouch...
     
  2. Red leader

    Red leader Nom Nom Nom

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    Not suprised, I've personally got an XBOX360 and Wii, I owned PS1 and PS2 and found them to be a really mediocre gaming platform with a stack of very middle of the road titles populated with some real gems, it was arrogant of sony to think they had the market sown up like they did, it smells of Sega pre 1990, cheers for the article :) 
     
  3. gil

    gil Godmaster

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    I could be totally wrong, but I read somewhere that it was the Playstation that made Sony money, and all their other stuff like TVs or CD players made Sony lose money, but since the Playstation made so much money, Sony made money in the end. Now that the PS3 is making Sony lose money, Is Sony fucked? Or are they actually making money with the other stuff to offset the PS3.
     
  4. Max-prime

    Max-prime Supreme-Commander

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    We knew when it came out that it was being sold for a lose.
     
  5. yodafett

    yodafett Well-Known Member

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    With as much stuff as Sony has fingers into, I can not begin to believe that the PS1 and 2 were their only profit generators. They back movies and TV shows, not to mention selling them on DVDs. I'd belive that the PS line was one of their BIGGEST money makers, but never their ONLY...
     
  6. Mixmaster

    Mixmaster logh ghot SIS yoD TFW2005 Supporter

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    I find it hard to believe that the success of the Wii was unexpected. The Wii sells for a fraction of the cost of the 360 and the PS3, and was deliberately aimed at a more casual gamer.
     
  7. BigPrime3000

    BigPrime3000 Well-Known Member

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    Aren't most consoles sold at cost or even slightly under cost in the first place? They had to be selling them at a massive loss. Still no company likes to look at a $3 Billion loss just to keep their name in the competition.
     
  8. Primus

    Primus Beware, the modelers. Veteran

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    Game consoles are almost always sold for a loss when they first come out. They are subsidized by the royalties that the companies get from software sales.
     
  9. Poho

    Poho That's MISTER Poho to you

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    that's what happens when you make a shitty system that is barely an improvement on its predecessor, and try to squeeze a computer and a blu ray player into it. no wonder they're losing money, bluray players alone cost roughly the same as the PS3 itself.
     
  10. McBradders

    McBradders James Franco Club! Moderator

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    You know what's really shitty? Uninformed troll posts like this!

    Microsoft says "Hay thar!"
     
    Last edited: Jun 26, 2008
  11. Ziero

    Ziero TFW2005 Supporter

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    Xbox was sold at a loss when it first came out as well, that fact isn't what hurt Sony. It's the fact that they haven't gotten enough exclusives and are just now starting to catch on. Because the 360 came out first, it had no next gen competition, and when the PS3 was finally released the 360 started to finally pump out it's big name exclusives to make the PS3 struggle. Combined with the Wii's popularity, which is mainly all about in house exclusives anyway, the PS3 never had a chance to really take off.

    This is exactly what Microsoft wanted to happen, by getting such a massive headstart with their system, despite the absurd QC issues(30% launch fail rate compared to 1% on Wii and PS3 launches) Microsoft was able to corner the market on Next Gen systems and make sony play catch up. Combined with constant bumbling on Sony's part and Nintendo going "Screw you guys, I'm goin this way", circumventing the entire situation, Sony ended up getting left in the dust. Hopefully though, this "10 year plan" of Sony's pays off in the end.
     
  12. Liege Prime

    Liege Prime Well-Known Member

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    This isn't too surprising on the systems, since they usually don't rely on that for their main profit. I'd like to know how much the actual cost of one of Sony or Nintendo's $50-$60 controllers, since they seem to me to be rediculously priced, but I could be wrong.
     
  13. General Magnus

    General Magnus Da Custodes of the Emprah

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    Oh boy.. now X-Box fanboys are not gonna be quiet...

    (I have nothing against the XBox, it´s just some fanboys that piss me off)
     
  14. McBradders

    McBradders James Franco Club! Moderator

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    Good lord, really? Really?
     
  15. General Magnus

    General Magnus Da Custodes of the Emprah

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    I hope I did not insult you.lol

    Like I said I have nothing against the Xbox-360 or their owners(heck i was about to buy one had not my parents got me a PS3 for Christmas).

    It´s just some fanboys, that piss everyone off.
     
  16. Beastbot X

    Beastbot X The Toad Knows.

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    Hardly surprising, though a big shame from my POV. I just got a PS3 a few weeks ago as a college graduation present, and I friggin LOVE the thing. And I can't stand playing on a Wii, and the Xbox doesn't have my fav series like Ratchet & Clank.

    I hope there'll still be a PS4 eventually...
     
  17. McBradders

    McBradders James Franco Club! Moderator

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    And this is better how, exactly?
     
  18. RabidYak

    RabidYak Go Ninja Go Ninja Go

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    It was worth every penny. $3 billion is arserag compared to what they will be raking in from BR royalties in a couple of years, which would have been a fair bit tougther to secure without the PS3's contribution.
     
  19. General Magnus

    General Magnus Da Custodes of the Emprah

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    Then I´m sorry. I apologize if I sounded like a troll or anything.
     
  20. Galaxy Convoy

    Galaxy Convoy Well-Known Member

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    I have zero pity for Sony about this. I don't know how the hell they really expected to sell a video game console for $600 a pop. Add in a game or two, extra accessories, whatever, and that cost probably reached upwards of $700-800. $400, the former cost of a 360 and PS3 now,was and still is pushing it. Of course it doesn't help that the PS3 is just now starting to get those games that make you want the console they're on.

    When the PS3's original price was announced the first thing that popped into my mind was, "Oh great, another 3DO". I didn't think any of the Big 3 would ever be stupid enough to pull something like that. Sony proved me wrong.
     
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