Sony Losing Almost $250 Per Console

[Tony Hoyle]

I don't know what the law is in America but in Europe it's illegal to sell goods below cost price, it's called dumping and is anti-competitive behaviour.

No one ever loses money on a console it's all a load of bullshit to make the ignorant think they are getting a bargin.

No it isn't. It's called a Loss Leader and is not only legal it's very common.
Predatory pricing - Selling at an artificially low price with the intent of driving a competitor out of the market is illegal. Maybe you were thinking of that? Sony aren't even close to being accused of that...

Dumping is something totally different - it's the act of selling at a lower price in a foreign market than the local market, thus damaging the local market. That is illegal also.

 

[Epicenter]

Do you think sony exec's have turned to one another yet and said something along the lines of "oooooohhhhh Fuck" ?

um, no? The ps3 is pwning the market. I almost pulled my arm out of the socket racing the mob to the store.

They'll be pulling in a profit very soon.

So if you take $250 loss to make each console and sell 400,000 of them, you make money? No, that means you lost $100,000,000. The only money Sony can make is by charging developers licensing fees and for SDKs. I've always hated this practice because it almost uniformly ensures only developers with overflowing pockets (I'm looking at you EA) can afford to produce games for the system, so their shovelware floods the market-- while the smaller studios with all the good ideas are kept out of the market. They generally end up going to other consoles (e.g. Nintendo's, and formerly, Sega's) which is the biggest thing keeping me away from the PS series and XBox/360.

Nintendo had the right idea, making systems like the Wii and DS that cost very little to make, produce an immediate profit, are easy to develop for, and mimic the hardware of their predecessors, keeping SDK costs down so developing games for the systems is easy and cheap. I can't care how many fucking polygons a PS3 can push if all I can play for it are boring sequels and sports games.

At any rate, no one's been able to answer this for me yet .. why is anyone buying a PS3 NOW? There is pretty much nothing to play for it. I saw the rack of PS3 games yesterday, mostly boring things no one is interested in, and they cost ~6500-7500 yen (something like $60-70.) I've heard all the claims (ZOMG, you can play Final Fantasy 67 and Metal Gear Solid 23).. but that's .. some day. You know, when they come out. Which they haven't. The people buying the machine are clearly buying it to plug in and watch it hum and produce heat, or to sell it on ebay for $10,000 to someone else who will watch it hum and produce heat. A bonus feature might be jerking off while watching your PS3 hum and produce heat. In a few months when some actual games are out, why not buy a system THEN? When they are in large supply and easy to get.

 

[daclassicgamingmaster]

So if you take $250 loss to make each console and sell 400,000 of them, you make money? No, that means you lost $100,000,000.

Flawed logic. As time goes on, prices for parts become easier to get, become cheaper, and production becomes more efficient. Sorry, redo your math.

 

[Epicenter]

That won't be 'soon' as you've said. It'll be quite a long time especially with such a huge loss per unit. IIRC, Microsoft just started breaking even on the XBox around when 360 came out. The PS3 will probably stop losing Sony money in a year and a half or so. Maybe longer. By the time the XBox came out, its hardware was not even close to cutting-edge. The PS3's hardware is still quite expensive. And they're still cutting corners. I'm counting the days til we hear about our first failed Blu-Ray drive...

 

[daclassicgamingmaster]

That won't be 'soon' as you've said. It'll be quite a long time especially with such a huge loss per unit. IIRC, Microsoft just started breaking even on the XBox around when 360 came out. The PS3 will probably stop losing Sony money in a year and a half or so. Maybe longer. By the time the XBox came out, its hardware was not even close to cutting-edge. The PS3's hardware is still quite expensive. And they're still cutting corners. I'm counting the days til we hear about our first failed Blu-Ray drive...

You can't possibly slap a number of years up off the yop of your head. You don't know how much more efficient production will become, how quick it will become efficient, how cheap they can get hardware, etc. I know you like being right all the time, but this is something you'll never be able to calculate.

 

[Epicenter]

I can calculate it won't be 'soon'. Your initial statement was that because there were big crowds for the PS3, Sony would turn a profit on it soon. They won't. Software, sure. It's marked up as hell with all of Sony's little fees. Hardware, that'll take a long while. But the hardware's not where Sony is expecting to make money, and it likely won't happen til close to when the PS3 is retired.

 

[daclassicgamingmaster]

Whatever you say epicenter. You're right, how's that sound? Give yourself a nice big pat on the back now.

Oh, and here's an answer to your question:

People LIKE the titles that have come out now. Is that so difficult to fathom? They want the hardware, and they like the games out now.

There's an answer.

 

[Epicenter]

I'd like to know what games these are people are so wild about. Because so far I haven't heard anyone say what they want to play on the PS3 except 'Final Fantasy ____' and 'MGS ____' etc. Not a single title that is available now. The launch lineup is very weak. Like the PS2 before it, where there was virtually nothing to play, yet people were outside in arctic temperatures waiting for them just like now.

 

[daclassicgamingmaster]

Resistance: FoM is supposed to be rather good. Racing fans like Ridge Racer 7. What can you do? If people like what's out now, good for them.


Edit: Great review for it as well here

 

[darkman]

I'd like to know what games these are people are so wild about. Because so far I haven't heard anyone say what they want to play on the PS3 except 'Final Fantasy ____' and 'MGS ____' etc. Not a single title that is available now. The launch lineup is very weak. Like the PS2 before it, where there was virtually nothing to play, yet people were outside in arctic temperatures waiting for them just like now.

I agree with you Epicenter. The launch lineup IS very weak. There is really no must have game out there right now. I feel what's really driving the sells right now is the Seasonal Hype. After that subsides they had better have some games for the next batch of PS3s. $600.00 is a lot to throw down on a game system. I was looking at demos at a local store today running on the system and they had some real impressive graphics. But the games they were showing were not available yet. The graphics were really glitchy, broke up at times and it had 3 second freezing. The outside casing looked nice. One of those games made me want to play, if I was looking at the in game play graphics and not a movie, that was "Lair." Another one was "Heavenly Sword." But everything I saw could be done on the PS2, except for the Graphics.

 

[Exophase]

Remember, PS3 isn't just a gaming console, it's also a Linux machine that you can actually run things on. I think if anyone can relate with that it should be these boards. I don't know exactly what they have for it but I do know someone who has already installed Linux on her PS3 so I assume she's doing something with it.

It's expensive, yes, but I can vaguely understand buying one now if you want to use it like a PC, especially if your actual PC isn't that great.

 

[DaveC]

At any rate, no one's been able to answer this for me yet .. why is anyone buying a PS3 NOW? There is pretty much nothing to play for it.

It is Sony, hype. "the most powerful console ever" rhetoric. They had a basketball game on it in a kiosk that basically looked the same as a basketball game that came out on the 360 8 months ago. It looked no better really. But these guys came and were creaming all over it. "wow it looks real, the PS3 really is so powerful". "It really is the best ever""it blows everything away". Why wouldn't these guys say "yeah it looks good but i saw the same game on the 360 last year" I guess it is all perception, Since Xbox doesn't have the fanboiz of the Playstation series it is like it don't count until it comes to Playstation. When it was done on the 360 just as good it was like it never existed, real strange.

 

[Epicenter]

Remember, PS3 isn't just a gaming console, it's also a Linux machine that you can actually run things on. I think if anyone can relate with that it should be these boards. I don't know exactly what they have for it but I do know someone who has already installed Linux on her PS3 so I assume she's doing something with it.

It's expensive, yes, but I can vaguely understand buying one now if you want to use it like a PC, especially if your actual PC isn't that great.

It doesn't run Linux(you'd need to install it yourself, with a lot of money out of pocket and hassle on your part) and rest assured Sony doesn't want you running any unsigned code on it, just like the PSP. Personally I would not be caught dead trying to use a PS3 like a computer, same for a 360. Even basic tasks like surfing the web require an expensive HDTV and huge font size, or sitting very close to the screen, to be half-comfortable. Once you buy an HDTV you could already have built 2 high-end PCs with monitors. Most of the things a PC does are not comfortable sitting on your couch, and I'm surprised the industry hype-masters who scream about consoles replacing PCs every 4 years have not yet realized this.

 

[darkman]

You can build a good Linux box for less than $400.00 and it would run any of the Distros out there with no problem. I wouldn't even try to use something like the PS3 for that. You would not be able to use the systems full potential without the proprietary drivers.
According to the PS3 wiki Linux is not on board the unit. It was originally planned but Sony didn't do it. They said that they will give instuction on how to install on their site. Only one Linux distro right now has been mentioned as compatible and that is Yellow Dog Linux 5.0. It should be made available in two weeks for $50.00.

 

[Exophase]

Okay well my friend installed Fedora 5 on her PS3, the day it was released, and she didn't pay anything for it so that proves both Epicenter and darkman wrong. And I never said that it came on board, actually in my post I said you had to install it, but so what? You have to install Linux on a computer you'd build yourself too, oh no.

Just because someone is offering a PS3 Linux distribution for $50 doesn't mean there aren't others and it doesn't mean they all cost money. You can buy distributions for PC too, doesn't mean you can't get them for free. A Wikipedia article isn't necessarily an exhaustive source of information, it was just listing an example.

A $400 computer might be suitable as a Linux box but a PS3 will ALSO be a top of the line gaming platform if you don't already like the games. I'm saying there's incentive to get it now because it's not JUST a next gen gaming machine.

And obviously if it can run Linux out of the box it is not following the same unsigned code protection scheme PSP is...

And what is this about having to use an expensive HDTV? You can use an HDMI->DVI cable and hook up an ordinary LCD monitor. You can use it EXACTLY like you would any other computer, why is this so hard to understand?

 

[clarky2o2o]

for those that missed it "click" latest episode was all about the PS3. youj can watch it online at. bbc.

when the ps2/psp where launched the bbc was the most biased show you could watch...not much has changed.


next week is about the wii.

 

[Knuckles500]

Sony should've bought the consoles from themselves and sell them on eBay at 5K so they could get their money's worth. :rolleyes:

 

[daclassicgamingmaster]

Sony should've bought the consoles from themselves and sell them on eBay at 5K so they could get their money's worth. :rolleyes:

qft

 

[clarky2o2o]

Sony should've bought the consoles from themselves and sell them on eBay at 5K so they could get their money's worth. :rolleyes:

I woudlnt be suprised if they offered you the "head of marketing" descision on the spot

 

[Epicenter]

One news network over here had a bunch of kids play the 360, Wii and PS3 side by side .. They showed excitement about the PS3 at first, but it waned and soon they started complaining about it. The general consensus by the majority of the kids was that they enjoyed the Wii more, followed by the 360, then the PS3.