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Sony To Sell PS3 Slim At A Loss
Despite shaving 70 per cent off PS3 production costs since the system launched in November 2006, Sony will continue to make a loss on each unit sold following the introduction of the PS3 Slim, according to SCE boss Kaz Hirai.
“If you're just talking about the hardware alone, the quick answer is yes,” Hirai said. “That makes good headlines, but I don't actually know that that's the true nature of the business that we're all in, whether it's PlayStation, Xbox or the Wii. I think the better indicator is to look at the business as a whole platform, to ask: are you profitable in terms of the hardware, software and peripherals. And the answer to that question is yes on a gross profit level since the last fiscal year,” he told Times Online.
Elsewhere in the interview, Hirai confirmed that Sony is on track to launch its PS3 motion controller next spring.
“We are slating it for spring of next year. One of the things is that we just don't want to put out the controller. We need great software that supports the controller at launch. It's something that we've been working on for the longest time.”
The executive also moved to assure owners of existing PSP systems that the company isn’t planning to abandon physical media products, despite the upcoming PSP Go’s lack of a UMD drive and reliance on download-only titles.
“We're in over 100 countries and there are areas where consumers still don't have access to the type of broadband that we have. The death of physical media is a very nice conclusion, that seems to be nice to say, but it’s not something we're going to see soon. We are committed to the PSP 3000 and the UMD business. A lot of people like to speculate that we're getting out of that business, but nothing could be further from the truth. We're not going to deprive consumers in all those other countries.”
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I think Part of the problem with this tactic where they lose money on Hardware and presumably make the profits on the software is that their software just isn't as strong as it was. I think the other two consoles have stolen some of what made the PS2 what it was.
For Example if you are one of the casual gamers from the PS2 era well now you have an entire console aimed around your tastes. My sister had a PS2 for this very reason and now has a Wii and unlike the core is very happy with her purchase. In her mind a combo of platform titles like Mario Galaxy and Zelda with more casual titles like Wii sports, Carnival games and Rock Band are enough for her, heck she even has Res Evil 4 and likes it. In other words she's not coming back to Sony for her gaming as a social thirty something the cost for the console and games even at a reduction far outweighs her need.
Then you factor in Microsoft stealing Remedy who produced Max Payne that sold 5 million copies on the PS2. Not to mention grabbing multiplats for GTA 4 and Resident Evil 5.
What I also find odd is how Sony guys are banking on Uncharted 2 and Gods of war 3 to save them. This doesn't add up as Gods of war sold 3 million units on a system of vastly more users and gods of war 2 sold 2 million or so units. Add to this that we've already had one outing for Uncharted on this system and it sold between 2-3million copies. That is not me saying those sales are bad but hardly the 12 million units GTA: San Andreas sold on the PS2.
Regardless the arguement, my heart truly bleeds for the Multi-Billion dollar company that miss calculated the consumer market with horrible pricing and sub-par marketing in an attempt to persuade customers into believing that they have a great product. People, did not the market respond to Sony's efforts by NOT making them number 1 in the market?
You're arguing CRAP that doesn't matter. Doesn't matter what MS or Nintendo did. The CUSTOMERS have spoken with their dollars on all fronts, now Sony MUST get their act in order. Facts and figures mean nothing right now...
You do know that the PS3 has generally outsold the 360 when you look at the numbers in terms of points in the respective lifecycles?
PS3 sales are at 23 Million worldwide, while the 360 is standing at 30 million. That's not bad going for a system that was more expensive than any other console on the market (before the price cut).
Also, i don't believe for a minute that all those 30 million 360's were bought, brand new, by different demographics, it's more likely to be the same consumer buying replacement units.
When you're looking at things from a game industry perspective, 30 million to 23 million is a misleading stat, the sales numbers for 3rd party games released on both consoles is a more accurate indicator of how things are going.
And the third party sales in most cases are not even close let alone the PS3 version selling 77% of the 360 version's sales numbers. 77% being 23/30, aka the number of PS3s compared to the number of 360s represented as a percentage, and if all was equal, software sales should roughly maintain that ratio, if all those customers are roughly the same. If the 23 million all represent unique PS3 owners and the 30 million don't represent purely unique owners, then the PS3 is in even worse trouble, 360 owners certainly are not buying more than one copy of every game.
I think what the difference in software sales, overlaid with the hardware sales tells us is that there's a significant number of PS3 owner's who are only using it as a Blu Ray player, and that people who own both, are more likely to buy the 360 version of a third party game when there's a choice. As well, it's safe to assume most people with 360s buy it primarily for gaming.
Hardware sales wise, the PS3 hardware will most likely have to out sell the 360 significantly to compete with the 360's game sales, which we all should know is where the $$ is (especially for Sony and MS who utilize the model of taking a loss on the hardware sales) .
You do know that EA make more profit from PS3 games than 360.
http://www.mcvuk.com/news/35278/PS3-outperforms-Xbox-360-for-EA
What you're saying is not true for wordwide statistics!
Also, i don't believe for a minute that all those 30 million 360's were bought, brand new, by different demographics, it's more likely to be the same consumer buying replacement units.
I agree, MS have the "put out now, fix later" mentality that software developers have and that mentality didn't serve them well with Hardware.
Also, it's not as if RROD was the 360's only problem, the system was riddled with ambiguities since launch. It's documented all to well here:
http://en.wikipedia.org/wiki/Xbox_360_technical_problems
http://www.1up.com/do/newsStory?cId=3160603
From the article above:
"The list of problems is almost comically large: three red lights of death, two with disc read errors, two dead on arrival, several with random audio and video-related issues and one that actually exploded."
Fuck that for a carry-on.
MS are a bunch of cowboys!
Could have been true if Microsoft hadn't put the 3 year retroactive warranty to any replacement consumers might have had with the 360. No one in their right mind will pass on a chance to get their money back for having replaced or repaired their console.
That's why I got my under-warranty refund when my second xbox died. It's why I now own a PS3. Its why I will glare sceptically at any future Microsoft console and shake my head in disbelief at those who pay up for a new one when their current one dies after one year, fails again after 6 months following repair and gets more air miles than the sucker that can no longer afford a holiday because they know it's time to cough up again.
I really hope that the class actions bite MS hard, but to be honest, some sort of give back to restore consumer faith before the next generation would probably be on the cards anyway.
If the next generation of consoles between Sony and MS is a 50/50 choice in terms of hardware to the consumer - who would sink their money in to the potential MS merry-go-round?
I suppose this is why MS is so happy with this generation to last another 4 years - with any 'replacement' bought 360 getting a price hike (arcade bundle), let the good times roll. The figures look good on the board, but I'm sure as hell they are exploiting customer loyalty and how much they invest in peripherals and games.
They are making less sense every day. Tom Ivan - Hats Offs to you for being able to keep your notes straight. Following Sony these days must be testament to organization
- We didn't lower our price due to sales
- We reduced manufacturing costs 70%
- We are now profitable
- We are still not profitable
- Blu-Ray is the future
- The Playstation is finally moving beyond discs
- We have the old PSP because people love UMD
- We have the new PSP because people don't love UMD
- We don't believe in netbooks, the Viao P is not a netbook
- We designed the Viao W because we believe in netbooks
I can't keep up. Do they even talk to each other? They sound like they're drowning in a sea of their own desperation, & I don't even know why. It's in third place, but its been successful...generally speaking. Is this the first time they haven't been able to crush the competition? Sony seems really dazed right now.
I think this is why Howard Stringer is so mad all the time. Japan is going to have to face facts that their strategies and the way they do business must change.
Only a numbnuts would think none of the hardware companies reduced costs
The 360 hardware isn't profitable, previous incarantion of the PS hardware were initially unprofitable. Everyone except Nintendo sells their hardware for nothing basically or at a loss. That doesn't mean they're not making a profit over all. Which is his point.
Not even retailers make money on hardware (360 or PS3) which is why digital only sales will never work unless hardware prices increase to make it worth selling the stuff. This is also why retailers like selling used games because software profits aren't always that great, especially now that so many games are similar and most sell shit amounts.
It's fine if you want to be a fanboy but you absolutely fail at attacking your "enemy"
When did I say other companies don't reduce costs?
Do you have a link?
EDIT: Not really on topic, but there is another option for digital downloads. We only see it from a consumer perspective - same game/no box. Realistically, the current model involves the total removal of retail. They have enormous leverage selling hardware; so they must be integrated into the equation whether it's efficient or not.
If MS/Sony/Nintendo made their systems "portals" linking users to a retailer's download site, you don't change the business. Collect license fees as usual, let retailers collect a piece of the game sales. They would still happily sell consoles, and we could finally go digital.
Attacking your enemy? Is that what every post is to you? A newly drawn line in the battlefield of gaming? I don't know if you should be so quick to point the fanboy finger
They could always go the way of Dell and sell their consoles online. However obviously retailers are still a massive necessity and that's not going to change any time soon.
Like MS are doing any better...
I don't understand?
Are you referring to back & forth responses? I don't remember them making any statements like this. They don't have competing portables, they don't make a netbook, & they've always said discs were becoming obsolete - a response to a lack of Blu-Ray, but at least statements are unified.
They've even fully admitted to the RRoD issue! I can appreciate your trying to form a "human-chain" to block bad publicity, but comments that conflict daily are very hard to ignore.