PS3 Loss Down to Just Eighteen Bucks

[katsabas]

Oooh...2011.
Hell I'd buy a PS3 if I wasn't so ridiculously bad with joystick aim.

Got 'I Chose The Impossible' in Bioshock on the PS3. If you are a good FPS player in general, you will not have a really big problem.

18$? Wow. In less than a quarter? Crikey, they are really getting back on their feet. Can't wait for more competition, cause that's where video games shine.

 

[Jared]

Well, I suppose Sony will be happy with that at least. Means they are slowly clawing it all back

 

[wasalp]

I don't really see how it helps, I purchased my 360 a year ago because it was far far cheaper then a PS3, and other then a tiny amount of games that look interesting that are only out on the PS3 I have no incentive to spend more money on another console, I think a lot of people would feel similarly.

Don't call me a fanboy, if the PS3 had been cheaper and had the games I wanted when I made my purchase I'd of likely got that, but it was much more expensive, and now that it's down in price, I've already got my 360, got a ton of games, and everything I want is coming out on the 360 as well, so why would I buy another console?

this article was not trying to sell you the console

 

[008Zulu_v1legacy]

Hows the power draw on the new refined version compared to console 1.0?

 

[Swaki]

will they outsource more? or how will they lower the loss of the other ps3s? and where does an Asian company outsource to?.

businesses tend to confuse me, but yay for sony, the ps3 really is a nice machine (or i know the slim is at least).

 

[Treblaine]

Hmm, figures like loss of $37 "Per console" and the with no hardware revision I has gone down to "$18 per console" does beg the question of how much it actually cost "per console". I mean the console itself is mostly a pile of plastic, silicone and a trace amount of other metals, there is the time taken to make each one but that is mostly automated.

I think it is pretty poor economics to get too worked up about cost "per console" and seems to me like a fallacy.

I mean there are costs... and then there is revenue. You can't just divide the cost by the number of consoles to get the cost per console, it doesn't work like that.

What the "cost" is is buying or renting the machines that MANUFACTURE the PS3s and hire or employ the technical experts to get the job done. Then there is a labyrinth of other costs like warranty, legal, future R&D (playstation 4 won't come out of nowhere), distribution, PR, marketing, networking, production studios.

I think we should just forget about the idea of cost per console... it just has too many abstractions to have any relevance.

The only question that matters is "is Sony making enough money to cover their costs" and that comes from ALL sources, games and movie studios even. Because if they make a loss for too long and show no sign of ever making a profit, THAT is when we should care as that is the point either prices go up... or the company goes the way of Sega and their Dreamcast (not the case here) but that is the point where gamers should care.

We need to keep an eye on the general health of a company, not just obsess about the one aspect that we gamers are most interested in, the console, which is the most important, yes, but so many other invisible components are linked to that.

 

[sidereal_day]

Hmm, figures like loss of $37 "Per console" and the with no hardware revision I has gone down to "$18 per console" does beg the question of how much it actually cost "per console". I mean the console itself is mostly a pile of plastic, silicone and a trace amount of other metals, there is the time taken to make each one but that is mostly automated.

I think it is pretty poor economics to get too worked up about cost "per console" and seems to me like a fallacy.

I mean there are costs... and then there is revenue. You can't just divide the cost by the number of consoles to get the cost per console, it doesn't work like that.

Yes it does. That is exactly how it works. It's called Average Cost (AC) and it is as important to microeconomics as TC (what you are proposing Sony go by).

 

[Frank_Sinatra_]

HA. Hahahahahahahahahahaha!
With any luck this bit of info will kill this stupid argument in the incredibly stupid console wars.
A guy can dream yes?

 

[orangeapples]

this is crazy. i cant believe all this time we were complaining about how much Sony was selling there ps3 for. Cant believe that they were giving us a deal.

I think one of the early jokes about the PS3 was "Microsoft's new strategy for taking down the PS3 after finding out that Sony was making them at a $120 loss is to buy all of the PS3s"

 

[Pendragon9]

Sounds good on this end.

If they catch up there will be quite a good competition in the console market. And of course that means better games.

 

[MelasZepheos_v1legacy]

Had a I realised Sony released a console they were actually making a loss on, I would have spent much more time making fun of them.

Yes it's reasonably impressive that they've managed to cut just how much money they're losing on this thing, but really, releasing something you're making a loss on? I'm not a business whiz but that doesn't sound like the best strategy.

 

[mokes310]

I'm curious...Sony says they have sold something like 33mil units: Where have the majority of these consoles been purchased? I would have thought that it was something like 3:2 Japan:USA. Does anyone have any ideas on where I could get those sorts of figures?

 

[Ciler]

Had a I realised Sony released a console they were actually making a loss on, I would have spent much more time making fun of them.

Yes it's reasonably impressive that they've managed to cut just how much money they're losing on this thing, but really, releasing something you're making a loss on? I'm not a business whiz but that doesn't sound like the best strategy.

It's more of a long-term strategy.

http://en.wikipedia.org/wiki/Loss_leader

They earn money from the games that are sold for PS3. Also, by planting a Blu-Ray player in 33.5 million homes they're getting royalties off of every Blu-Ray disc purchased by those customers. They most likely would also profit off of extra controllers and other Sony accessories.

 

[tkioz]

I don't really see how it helps, I purchased my 360 a year ago because it was far far cheaper then a PS3, and other then a tiny amount of games that look interesting that are only out on the PS3 I have no incentive to spend more money on another console, I think a lot of people would feel similarly.

Don't call me a fanboy, if the PS3 had been cheaper and had the games I wanted when I made my purchase I'd of likely got that, but it was much more expensive, and now that it's down in price, I've already got my 360, got a ton of games, and everything I want is coming out on the 360 as well, so why would I buy another console?

this article was not trying to sell you the console

well... duh... I was simply pointing out that making loosing less money on each console wont be enough to get over the hurdle they set up by pricing themselves right out of the market, the thing was more expensive then some cars I've owned when it first came out.

 

[Crazy_Bird]

The fact that they are losing money on each console sold at all is roflcopters.

It is actually a normal praxis in the gaming industry. Sell the consoles with a loss and get the money back through games and licences. A clever case of subsidies.

You just make substantial higher earnings once you lower the price and "repaid" most of the development and production cost.

 

[CrystalShadow]

Well that's decent I suppose. Halving your loss on sales in less than three months is pretty impressive.

Just have to hope people keep buying PS3s in the future.

You know what's more impressive? Selling a product that's profitable to begin with.

I think that rarely happens in the electronics industry actually, few components like TVs and whatnot sell at a gain nowadays. Isn't the 360 still selling at somewhat of a loss, or has it jumped over that now?

I get what you're suggesting here, but selling a product at a loss only makes sense if you can recoup the costs indirectly...
Game consoles can do that because of the games, but electronics in general would have a bit more difficulty.

That isn't to say the margins are likely to be very high, but there's little chance a TV is being sold at a loss, because there's no way of recovering that loss...

 

[Soxafloppin]

Good stuff, I hope the market gets as competitive as possible.

 

[sidereal_day]

Most games these days are cross platform, so I don't know how much better games will get due to increased competition between Sony and Microsoft. I don't think they'll bid up big games to get the exclusive rights to them -- it's an open secret that there is some implicit collusion between Microsoft and Sony to generally not do that. Maybe in-house games by the two companies will get better, but that's not a hugely significant part of video games as a whole.