Sony loses billions

[RoboticOperatingBuddy]

http://videogames.yahoo.com/feature/sony-has-lost-over-3-billion-on-the-ps3/1223467

 

[Darkslash]

http://videogames.yahoo.com/feature/sony-has-lost-over-3-billion-on-the-ps3/1223467

trying to use blu ray to their advantage has really back fired now lol. It was like 200$ a loss for a Ps3 and then their electronics aren't doing so well either. Though this part made me smile

Sony fanboys should take heart, however. Losing money on hardware is relatively common in the video game biz, as companies routinely lower prices to sell more units and thus stimulate software sales.

What does Nintendo make of a Wii like 75$ us? and still no price drop? Hmm looks like they are doing some thing right

 

[SkylerOcon]

A PS3 costs a little over 1,000 bucks to make. I assure you, Sony's doing the right thing.

 

[Jam Stunna]

Nintendo makes nowhere near $75 per Wii. It's more like $8.

And yeah, it may be common for videogame hardware to lose money, but $3.1 billion is a huge number in less than two years. For comparison's sake, the Xbox lost Microsoft $4 billion in four years (source: http://www.joystiq.com/2005/09/26/forbes-xbox-lost-microsoft-4-billion-and-counting/)

 

[SkylerOcon]

That's really weird. If Sony and Microsoft why don't they just drop out (and before anybody says 'zomg nintendo fanboy' I don't want them to drop out) of the console race?

 

[JonBeBonanza]

I have a dvr and today i was recording.. i think it was Americas Best Dance Crew so i could watch it later, and i fast forwarded through alot of PS3 commercials and thought to myself, "they're still the only ones making commercials, it mustn't be selling well" and then lo and behold on the front of my yahoo. "SONY LOSES BILLIONS". Sucks.

 

[Mini Mic]

Pfft they'll make it all back in software sales, give them a few years.

 

[Crimson King]

Doesn't really affect me, or them, that much. They are a multi-faceted entity unlike Nintendo who pretty much focuses solely on Video Games. Sony has been in consoles since what, 97? They aren't going to drop out any time soon, and probably have numerous ways of recouping loses. Also, they announced an even cheaper PS3 (to make) coming out in the fall with the nicer, smaller, cooler, cheaper 65nm chips.

Microsoft has the same benefit as Sony, in that video games are not their primary method of making money. Also, take into consideration that the PSP has been dominating the Japanese market for the last couple of months and this doesn't affect their business that much.

All in all, meh. I have MGS4, GTA4, and Little Big Planet will be out soon. As long as I can get Resistance 2 and maybe Infamous before they close shop, I really couldn't care less.

 

[derek.haines]

"Also, take into consideration that the PSP has been dominating the Japanese market for the last couple of months."

Dominating is a bit of a strong word. It's been beating the DS by a few thousand units every month on the strength of a single title, and still lags behind by almost 10 Million overall units. The PSP is becoming such a ghost town over here that most gaming editors and analysts are looking forward to the next iteration of the system already.

"Pfft they'll make it all back in software sales, give them a few years."

That's the whole logic right there. This is why first-party game development exists, because it sells games and it helps recoup console losses. Plus, they get money from licensing games that show up on the system by themselves. A few years might be ambitious though, as it was said Microsoft has yet to make any money at all in the console video game market, even though they hold a very respectable share of it.

 

[Crimson King]

Analysts and Game Editors rarely know what people actually want. The PSP has been outselling both the Wii and DS since April and that is all based on one title. If the PSP ever had any more big names like that, it'll be a landslide.

And even if they aren't making the money, I'm at least content with my PS3 purchase. The Wii has been a solid disappointment except for Boom Blox. Every other game I own for it has either been too easy, too short, or just not fun for me at all. It may be the best selling console on the market, but when the majority of the games are "Wii [something]" and it's usually just a bundle of tech demos that they call mini-games, that's not too fun to me.

 

[Red Exodus]

What does Nintendo make of a Wii like 75$ us? and still no price drop? Hmm looks like they are doing some thing right

Well since they're using last gen hardware it's not going to cost them much. All they really did was add motion sensing. I can see big graphical and engine differences with the PS3 [MGS4 is beautiful] and 360 [it's not showing as much but it's a big leap from xbox to 360]. Sony is also working on PSN and MS is always working on XBL so they are spending money on more than just the console itself. Wii's online is terribly barebones for most games and they're selling games they made and sold more than a decade ago. Apart from motion sensing [I understand it was a big risk] Nintendo basically took no risks so even if they did fail this gen they would not as lost as much money as Sony or MS.

 

[Jam Stunna]

That's really weird. If Sony and Microsoft why don't they just drop out (and before anybody says 'zomg nintendo fanboy' I don't want them to drop out) of the console race?

Well, Microsoft's strategy from the very beginning was only to grab market share with the Xbox, not make a profit with it. They weren't expecting to start making money until a few years into the 360's lifespan (I think they stated their goal was to make the 360 profitable by 2009). Even though they lost money, Microsoft's business model was successful because they wanted market share over profit. They jumped into the market and beat Nintendo in the same generation.

Sony, on the other hand, had a pretty bad business model this time around. They're last in market share, despite drastically underpricing their system. Here's a post on another forum that does a pretty good job of explaining Sony's business model for SCE over the last fiscal year:

http://www.ocremix.org/forums/showpost.php?p=420635&postcount=26

Pfft they'll make it all back in software sales, give them a few years.

Even Sony themselves aren't sure if they can make back their initial R&D costs.

 

[SkylerOcon]

So Sony is trying to expand the PS2 market which is pretty much non-existant right now? That's kinda stupid.

 

[Spire]

I say Sony and Microsoft conform to motion sensor controls! That'll just be so.... innovative.

 

[Plazma]

holy moly that is a lot of money

 

[antimatter]

this was just the pick-me-up I needed. Sucks for Sony fanboys, though.