Though Sony's
overall bottom line is back in black, what held it back from an even bigger celebration cake was its core electronics brand, and no stranger to that sector is the PlayStation group. Both
Joystiq and
The Wall Street Journal took a more careful look at the numbers, and there's a few points worth noting. PS2 sales took a year-over-year dip, down from 2.5 million to 2.1 million. PSP took a larger hit, down to 4.2 million from 5.1 million. The
PS3, however, is a mix of good and bad news. The good news: 6.5 million in unit sales, up from the 4.5 million prior. That said, it turns out Sony has yet to pull its home console away from "loss leader" status --
WSJ reports the company is still losing "about six cents for every dollar of PS3 hardware sales," i.e. if Sony were to sell the consoles to retailers for $300, it'd technically be taking a hit of $18 each time. That's nowhere near the estimates when the PS3 first launch, and additionally Sony's CFO Nobuyuki Oneda is promising a 15 percent reduction cost by March 2011, which should go a long way. Lets' not forget the company still makes money on Blu-rays and software sales, but in the meantime, hang tight little buddy, you're
this close to being profitable all by your lonesome.
Update: An error in fiscal sales figures that has been subsequently remedied.
posted February 5th 2010 7:14PM
How does this compare with the Xbox 360 and Wii? I refuse to pass scathing judgement until I find out how the competition is faring in comparison...
@Alasdair:
Well the Wii has always made money from the beginning. Not sure about the 360. I don't think the PS3 has moved 47.6 million units, however. I've heard more around 30 million units from every place other than this article.
@Alasdair
I'm pretty sure the 360 was losing a LOT of money per console. The idea is that they make it up through game sales and Live.
@Alasdair
Well...
The Xbox Breaks alot, and the PS3 costs alot, and doesn't have the same selection of games...
The Wii... its kinda like a cross dresser.. it doesn't quite fit in.. but does kinda work in alot of situations.
Oh you mean costing..
I seem to recall Microsoft stating that they had started to make a profit. Of course they haven't had to make nearly as many price cuts to stay competitive.
*Or rather, they haven't had to cut their prices as much.
@Alasdair
Wii has always been profitable. I think it's always made something on the order of $100 per console sold.
The 360 started making a profit a couple of years ago, in 2007 I think, but not as much as the Wii.
@nicholiservia
Well, this reminds me of the common refrain for the 360. You may not want wireless controllers of a hard drive or a wifi adaptor, but you can buy that stuff extra.
You might not want a PS2 along with your PS3 (of course you do, the PS2 rocks), but you can buy a PS2 cheap cheap cheap to sit next to your PS3. I don't pretend this is ideal Sony made me expect this functionality. But if you are really willing to pay $400 for a PS2+ PS3... well, you're in luck, that's how much that costs.
@nicholiservia
I disagree that this proves Sony is making a bad decision.
they stratified. They were selling a ton of PS2s while selling a ton of PS3s, and guess what, both systems are very profitable. Even if the PS3 is a lossleader, its earlier than optimal launch won a format war that is worth tens of billions, has sold tons of digital content, and has sold a bunch of games.
It's not perfect. MS had a better idea of what the market wanted, I suppose, but the PS3 + PS2 as separate consoles wasn't the worst idea I ever heard of. It's just a really really competitive market these days.
@nicholiservia At this point and with the current selection of games, i don't care about BC anymore, yes there are some good old games but with the current selection + the titles releasing this year who has TIME to play old games that you finished 2 or 3 times already
@nicholiservia The whole world doesn't have a per capita like Norway, Singapore, or the US to afford a PS3.
PS2s are cheaper to make with a large market of used games, it feeds a lower market.
@nicholiservia
You have no idea how Sony makes their money. They're not stupid, they're a huge corporation that's been in business a long time. They sell playstation consoles to gain market share, not to make direct profit. Once they have market share, then they make profit by licensing Blu-ray, selling development kits to third party developers, certifying games made by third party developers, etc. Sony makes a huge amount of money non-consumers. They don't support ps2 emulation on the ps3 because the ps2 still sells! It's cheap to make and it's a revenue stream for them! Plus it gives them bragging rights about the longevity of their consoles. They would shoot themselves in the foot by killing that off.
@magus21
the wii at launch actually had a profit of $18
@Alasdair
The Xbox Division had a $1.9 billion operating loss for Fiscal 2007. Microsoft subsequently moved the Xbox Division inside the “Entertainment and Devices” division which includes the Windows Mobile Phone. So now no data is available on Xbox 360 revenue. So we don’t know whether the XBOX 360 is making money or losing money.
@gamedude360
Yeah, thought a $100 profit at launch was a bit too much, the margins & profits in the electronics game are tiny - thanks to all of the retailers scrapping to get those dollars from us, and squeezing the manafacturer
@Alasdair
The original Xbox lost money on every console sold.. The 360 has turned a profit on hardware since day 1.
I can thank my Sony for paying for a portion of my Blu-ray drive!
@Alasdair The consoles are not where the money is made... The money is made with the video games sold. From what I understand, it's not uncommon for companies like Microsoft and Sony to take a hit on there consoles because, they make up for it with the games that they sell.
@BluntNStunt
Not true. The XBOX 360 lost money every year revenue was reported until Microsoft stopped reporting revenue. Please check your facts before guessing. The bottom line is that no one (except Microsoft) knows whether the XBOX 360 is currently making money or losing money. It is that simple.
@Alasdair
Who the hell cares about the sales, Wii is for non-gamers, and PS3 has better exclusives than Xbox, that's enough reason for me to buy it.
"worth noting"
"we're noting"
@zomg0t
that would work
"where noting"
@1q2w3e4r All are valid, but the correct answer would be "worth" noting. That's -10 off my final grade. Drat.
worth nothing
Worthless something?
@1q2w3e4r a friend of mine wants one of these.
"The good news: 47.6 million in unit sales"
Wait I don't think Sony sold that many ps3's yet.
@nicks2slick
http://www.scei.co.jp/corporate/data/bizdataps3_sale_e.html
56.2 doesn't look right either.
@Vman
That chart says 33.5 as of the last quarter reported. You added in the last block in each row, which is the total of the others.
@Vman lol. good one.
When they sell their games at $60 a pop, I am sure this more than makes up for it.
@GenericMessage The game publishes get a lot from that. Its obvious games are too expensive. they cost less than movies to make, and make more profit...
@BUNT2
If games were too expensive, people wouldn't be paying $60 for them. So what that they are more profitable? Obviously some things are more profitable than others. It's not like Sony can complain that N has a more profitable system or anything.
Business should sell their product for what it's worth. And it's worth the most the market is willing to pay for it. Shocking to me, but that's $60. I only buy really special games for $60, but I do it.
You WANT game devs and tech companies to make huge profits. that's what brings in lots of talented people to make more awesome stuff.
Do you mean 47.6 million in sales total since launch? or is that a mis-print?
I am sure they didn't do 47.6 million units for the year or that would be a lot more that 17% increase over last years sales. If it is 47.6 million total has it now passed the Xbox 360 in total sales?
That would be a huge win for Sony coming from behind with a one year sales handicap to overcome.
@dennisheadley Apologies to you (and every other reader / commenter here), I misread the figures. It should never have gone to publication like that. I assure you, the long arm of the law has already invented new technology to pop out of the screen and slap me silly.
the only reason i'm leaning toward buying a PS3 is for god of war 3. i was a huge playstation and PS2 fan, but wasn't to impressed with the PS3.
@haan
Give it another chance. the PS3 really does have a lot to offer that you can't get elsewhere. God of War 3 will be great, the remastered old crap is actually really great, and there are some really good exclusives now. No one thinks Sony handled the PS3 perfectly at the start but the nuts, but they have truly turned this ship around. It's a really good item to add to your entertainment center, even if you're a die-hard Halo fan.
@(Unverified) I was really close to buying a PS3 but I bought a nexus one instead. Never was a huge halo fan, I just liked the way the online experience was set up on 360. And the controller felt more comfortable in my hands
if they are losing $18 with every PS3 sold, i fail to see how '47.6 million in unit sales' is good news.
@NoOrdinaryMSFT
Their not, $18 would be if Sony sold it for the whole $300 retail. Typically electronics is sold at double, double. So the unit cost of a PS3 to Sony is probably about $75, so they sell it to retailers at $150 who sell it to you for $300. So sony are taking a hit of $4-$5.
When you take into account the cost of game licensing the overall package makes a profit. Just
Finally, all top games consoles make a loss for (usually) 2 years to get market penetration and the fact that manufacturing cost will reduce over time.
That's what killed Sega, they calculated they needed another million or so untits in the market with the Dreamcast to break even and got cold feet.
@Jimbob
The Internal USA vs Japan company debacle over making the Saturn is what killed Sega.
@Jimbob
JIMBOB, good grief man, Sony does not sell PS3s to retailers for $150 each. Are you kidding me? Retailers barely make any profit on consoles. I thought this was well known. No offense buddy, but it's simply the case that Best Buy or Amazon only make a couple of bucks on that PS3 or Wii. They count on accessories and games for profit.
@(Unverified)
Good point, it's almost like selling Apple hardware
@NoOrdinaryMSFT Well, maybe, just maybe, more consoles sold translates into more games sales, which means more profit?
@(Unverified)
Yeah I guess it's been a while since I was in retail (-: That was certainly the formula used in the late 80's early 90's. !
@(Unverified)
Some retailers don't even turn a profit, they make losses on hardware sales. That's why some retailers won't sell the PSP Go, since it's a waste of shelf space and money to them. I certainly don't look at EB Games the same here in New Zealand ever since they thumbed their noses at my favourite portable console.
The 47 million is of total sales and it figures that include the holiday season sales (mostly mid December to mid Jan)
Yes another reason to drop that price .... i need to get a new one because i sold my old one. Drop the price for the 250gig to $200 and its a go
@chosenone1 Perhaps you misunderstood. No, this is not another reason for a price drop
Also, congrats/thanks for Sony producing the only system worth more than what we pay for.