According to some number-crunching by the Guardian, Sony might actually be losing more money per PlayStation 3 sold than its figures show.
A look at Sony's recently-announced financials show a significantly improved condition for the company's PlayStation business year over year. Sony's game division lost $1.2 billion on the year - last year, though, that number was over $2 billion.
So the company's clearly closing an internal gap. Its own figures, however, seem to show $130 lost on each PS3 it ships. The Guardian, however, points to the profitability of the PSP and continuing strength of the PlayStation 2 to paint a different picture. From its article:
"On Sony's own figures, the games division made a loss of $130 for each PlayStation 3 shipped. Let's assume that it's making pots of money on the PSP and the PlayStation 2: the PS2 is now hugely profitable and still sells more games than anything else. These two platforms could easily have made a profit of $1.2bn in the year. In that case, the total PS3 loss would have been $2.4bn shared between 9.24m PS3 consoles, or $260 per PS3 — including any attached Sony games."
i am a bit surprised about that , I know MS and Nintendo are making a profit on their system (small one for MS), but to still pay that kind of money for an install base... If sony makes 10$ per game sold... they need (i use 130$) 13 game per console to break even... if the gardian is right they need 26 games per console !!!????!!!
i guess it doesn't really matter just as long they get dominant market share. the ps3 isn't just focused on gaming, it's got the bluray. with bluray having won the next gen video format, more and more people are gonna get the ps3 since it's the cheapest out there. with ps3 slowly getting larger stakes in the market, developers will come out with more and better games, and eventually sony will make up for its losses. true 13 or 26 games per console is a large number, but bluray movies surely gotta come into consideration too. if the gaming division is losing money, sony might still be profitable as a whole
I bought a PS3 for the BLu Ray so they won in my book. Too bad they are so behind in number of good games and online play or that PS3 would get more use
"Blog maths, lol. Nowhere near $260 lost per console, not even close. IIRC they are pretty much breaking even on each PS3 sold after some cost cutting for production they did last year."
lol , read it again , Sony themself said they lose 130$ per console...The Gardian think its alot more , but even if they are wrong Sony lose atleast 130$ per console... so they need to sale atleast 13 games per console to break even. Its the first time i hear about a game console loosing so much money after 2 year on the market. I have a fealing Sony expected people to buy the PS3 at 699$ alot longer, they missed juge the market.
Blue Ray hasnt caught on yet they got around 2% of the movie sale market, DVD is still dominating.
Sheesh, I *have* a big TV, and I'm not super-interested in getting a PS3/BR player for some time yet. I wouldn't turn one down if it were free, of course, but I can live without one.
For now ;-)
If nothing else, I need to upgrade my sound system way before I get a BR player...
I hear you Ted. Just to clarify what I meant, as the TV gets smaller, the visual advantages of HD diminish. To the point where, if you have a solid upcoverting DVD player, there really is little point in putting out all the extra money, when you know the prices will have to come down at some point.
i agree that the gardian must be wrong, that not the issue Redeye, 130$ per console is.... 13 game per console to break even is.
I just think that Sony hoped to sale the PS3 for 699$ longer, they over estimated there brand value.
At the end of this gen , Sony might sale more console then even Nintendo.... But Nintendo will make alot more money, i hope that next gen , that all 3 manufacturer dont release Wii like console.
we are having a very calm and rational disscusion redeye , i am really enjoying it.
Your right about the fact they dont need 13 game per console to break even , you make a very valid point .
but sony lost 1.2 billion last year in is gaming division (2.2 billion the year before , but thats more normal), blue ray doesnt sale well yet and the attach rate for game per console is very low right now , close to 3 to 1. Sony bleeding alot of money right now , and the more PS3 they sale the harder it will be to climb back up. I have a fealing Sony wont make a profit on the PS3 but they will prepare the ground for the PS4, a little bit like MS did with the original XBOX .
I feel they will be alot more humble when they announce the PS4, and I , has a fan of games, will be pleased that they are. Maybe next time less 4D gaming and the generation dosnt start until we do , and all game are going to be 1080P at 120 FPS , but more realistic info and show real in game graphics.
But i am afraid both compagnie (MS and Sony) will go the Nintendo way next time, Nintendo is printing money like crazy right now.
Nintendo made two money printing machine : DS and Wii , good for them.
I was reading in a financial report that MS repaid their investment of the original console and is making alot of money with the 360 because of the crazy attachement rate. So even if they finish last the 360 is already a financial success for MS.
But because of the developemnent cost , and the low attachement rate i dont think Sony will make a profit this gen... but you never know both Sony and MS said they want a very long Gen. MS said 7 years and Sony said 10.
I think it might be up to Nintendo how long this gen goes, not MS and Sony. Since Nintendo has been profiting since day 1 of the Wii, and are now of course making money hand over fist, they can come out with an HD console whenever they feel like it, which would probably force MS and Sony to get their next systems out as well -- even if Nintendo follows this gen's model of using last gen's technology (i.e., if their next system is about on a level with 360 and PS3), the 360 and PS3 will give the impression of being old and obsolete anyway.
I think the PS3 is Sony simply trying to make the best out of a bad situation. They thought they could win the market and they can't...they won't. Even if they end up drawing even with the 360, the next run around they will lose out. I don't think the people at Sony are dumb, my guess is they know this and they will only make another console if they think they can push some technology that will make them money in the long run like bluray.
I wouldn't be suprised if this is the last console they make.