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PlayStation Losses Since PS3 Launch Near $5 Billion - Report
Sony’s games division has reportedly suffered almost $5 billion in losses since the company launched the PS3 in November 2006.
According to VG247, figures from Sony’s investor relations website show that total PlayStation division losses since the console’s release stand at $4.7 billion.
The report points out that the figure includes losses incurred by Sony’s VAIO business over the past two quarters. VAIO has been grouped with the PlayStation unit under the company’s Networked Products & Services division since the beginning of the platform holder’s current financial year a little over six months ago.
In comparison, the site claims that Microsoft’s Xbox division suffered losses of $4.2 billion in the four business years following the original Xbox’s November 2001 launch.
Earlier this week as part of its second quarter financial results, Sony said that its Networked Products & Services division had recorded a drop in sales and increased losses on a year-on-year basis. Declines within its games business were attributed primarily to “the impact of the appreciation of the yen as well as a decrease in unit sales of PlayStation 2 hardware and software”.
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Copyright 2006 - 2009 Future Publishing Limited, Beauford Court 30 Monmouth Street Bath, UK BA1 2BW
England and Wales company registration number 2008885
The only people who seem to be getting it right are nintendo. Normally Sony would start to make profit during the middle of the gen I bet their investors hoping that's the case this gen.
God damn, this web site sucks nowadays.
Why does everyone think that Sony's Network Products and Services is limited to just the PlayStation division?
Such a shame about the trolling below. Time for some proper moderation, Edge online?
These are worrying figures to me, because they paint the Sony (and Microsoft) console divisions as loss making enterprises chasing what might be a mythical pot of gold - it bears the hallmarks of the dot com boom where the bubble eventually burst.
I'd be interested to know whether Sony actually expects to eventually turn a profit on the PS3. Is it just expected at this part of the cycle? Or are these losses simply an unavoidable cost of grabbing market share while the gaming market expands? Don't suppose the answers will come easily or quickly.
Yep, clearly its time to ban comments. With the 'genius' remarks we have seen of late, this place is destined for IGN and Gamespot land. Well done guys!
This site has been a haven for fucking idiots since it remodelled, particularly in any article with any one platform as its focus - this thread is no better or worse than any of the other cunt-ridden cess-holes that pass for debate on these subjects.
It's the Internet, moron!
Thanks for calling me a moron PGTips. I guess you were just showing us you are included in the "haven for fucking idiots"!
I've largely enjoyed reading people's comments on the remodelled site. It's just the silly or abusive ones that need moderating. I also think it's fine to discuss the relative merits of different platforms with passion, and obviously you need a thick skin to enter public discussions on the internet. But some of the comments here don't even attempt to pass for debate.
It'd also be nice to ban that picture of the fat nintendo guy which seems to get posted 8 times in each thread. Maybe just remove the option of posting pictures at all, seeing as they're usually just fanboy abuse..
Wow, you've got a cheek.
@Wall_E
Your _DF comments just get funnier and funnier. Keep up the good work!
Dubs, how does it feel to care about a firm (the same goes for MS&NCL) that don't give a shit you. lol
You're boring me. Why must you be so boring?
Dubs, yer as bright as a blackout. lol
Oh, the wit.
@Dubs
Oh dear, SDF material.
Microsoft's overall Xbox losses (original and 360) are in the neighborhood of $10 billion.
But Edge doesn't dare write that story. Shameless, really.
Though there is a big difference in the overall financial position of the 2 companies. Microsoft as a whole has a market capital almost 10 times that of Sony, so proportionally $10bn v $5bn will hurt Sony a lot more than it will Microsoft. I also note you lumped the Xbox products togther but still took just the one Playstation branded product.
That's because the PS2 actually made money.
Another noteworthy fact is that the money lost on the Xbox front has been largely incurred from start up costs of a new business. Any business starting up in a new market has predictable losses in the first few years and they're built into the business plan.
What makes Sony being in the red news, is that in the previous iteration they were the undisputed and uncontested leader in the market, they went from that, to sizable losses the last two years. Nothing to do with games, but it clearly points out some seriously bad finacial/marketing decisions have been made with the PS3.
right so it would be more logical and accurate to compare the PS1 to Xbox, but hey we don't wanna do that cause Sony made 378,478 million yen in profit on the PS1 compared to the $4B in losses MS incurred on the Xbox
No doubt the PS1 kicked the Xbox's ass when you look at profits, but it's a bit hard to compare completely since it was a different time, with different challenges. I'm sure it certainly helped that what the PS1 was born out of what was going to be a Nintendo CD-ROM console/add on, and it was probably an invaluable experience for those Sony employees involved to work with Nintendo.
Really, I believe there wouldn't have been a Xbox 360 if Halo didn't exist. The Xbox may have incurred huge losses, but it was successful enough to survive (which can't be said for a lot of bombs like the 3DO, and Jaguar, not even Sega could stick with console even with the loads of critically acclaimed games on the Dreamcast).
Sony's success with the PS1 and PS2, are precisely why the PS3 doing so poorly financially is news. Many mistakes were made on a business level, and I'm sure the PS division being in the red was the last thing that was expected internally at Sony.
I find it hard to imagine that even spendthrift Microsoft planned for the Xbox to be a cash sinkhole for this many years on end. When according to their "business" "plan" do they start recouping that $10 billion?
I never said MS accounted for all the losses (which you keep tossing around this $10 billion figure, which doesn't seem to be linked to any reported hard facts) in their initial business plan. But you can be sure they assess what is happening each year and decide if things or still worthwhile.
Your problem is you're thinking just the video games business, consoles to MS are more like content delivery platforms, games are just the main hook currently. They're looking way into the future and doing what they feel they need to do to have a foothold when the business ripens.
You can't even look past your fanyboyism to admit MS has a profit driven reason they've taken the losses with the Xbox and kept going with it. As a corporation its primary function is to make money in the end, period.
My so-called 'fanboyism' doesn't prevent me from understanding that Microsoft is 'profit driven' and I've no doubt that Microsoft would like for the Xbox people to be making them money; it's just that they really seem to suck at it (along with the rest of E&D—have you heard of the catastrophes called Zune and Windows Mobile?).
You make them sound like some master strategists plotting moves way ahead of everybody else, but I don't imagine anyone who thinks Xbox's 'primary function is to make money' takes so charitable a view.
Come on, DubsTF - every company (that's not structured specifically as a non-profit) is "profit driven". That's the point of their existence and goes for Sony and Nintendo just as much as Microsoft. While Zune is not a resounding success, it did secure the second place position in the portable player space faster than any other entrant and continues to expand it's market share.
I think everyone is missing Microsoft's long-term strategy. They are positioning Zune Marketplace and Live! as services independent of any physical device. That's why they migrated from one hardware to another and are now linking together.
Bill Gates spoke about this concept nearly 20 years ago and technology is finally getting to the point where you can see it start to happen. MS is getting consumer's heads wrapped around the concept that you're paying for a subscription service - not a piece of hardware that is sold at a low margin (or loss) every few years.
They want to sell you on Zune Marketplace (for movies/tv shows/music/music videos) and Live! (as the community/games service that ties it all together). While both Nintendo and Sony were late to understand even the basic concepts of online, MS is moving to a point where the hardware doesn't matter (I wouldn't be surprised if they eventually license out hardware to multiple hardware manufacturers labeled as Zune/Live! compatible).
That's why there's a charge for Live! and the subscription service on Zune. MS doesn't want to sell low profit hardware - it wants to sell an online service you can take with you anywhere and transfer to any licensed device.
I've heard of the Zune and to say that it was a 'catastrophe' is a pretty big over statement, how can you make that statement when it was never released outside of the US. Sure it went head-to-head with the ipod and flopped. If it went global and flopped then it is considered as a 'catastrophe' for them. All companies are profit driven, to single out MS beacuse they are so blatant about it, yet ignoring companies like Sony gives the impression you are a fanboy (am not saying you are).
When it comes to fanboys, most reasonable people are not so charitable in views.