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
@chosenone1 Do you not understand the concept of money? If you are already losing money, why would you sell your pruduct for less?
@scots79
On that logic, why sell it at all?
Same as Microsoft, they make money through other revenue streams, and Sony probably makes more money from Ps3 Prevalence than Microsoft ever did when they were loosing money on each console.
I'm going to back him up.. Drop the price, people will buy it, and some of the developers doing decent games might actually move to the platform.
(NB: I'm not saying all Ps3 games are crap, some are awesome, some are more awesome than some xbox games.. there just isin't much of a selection in comparason.. which makes me sad as I did love my little PS2)
@geekthree
On top of that, Sony made Blu-ray a winner
@geekthree
I'd say you're wrong there - I have both consoles and I think the PS3 certainly has more worthwhile exclusives.
@geekthree
I think you havn't checked out the libraries in a while now. The PS3 has as many awesome exclusives or maybe even more than the 360 right now.
It's like selling cheap pretzels in Roller Coaster Tycoon. Everybody gets thirsty and you sell them expensive drinks!
@DanMan
These "pretzels" are not cheap at all. These "pretzels" still have a price range that deters those from buying it. The expensive "drinks" takes many people many months to conjure.
Basically I don't think this analogy really fit. While people do get thirsty, they aren't forced to buy the expensive drinks. Buying a console limits you to what the console itself can play. So in that case, you're forced.
@DanMan Kramer: "These pretzels are making me thirsty!"
@bths2643
Not forced to buy the expensive drink? Have you ever been in an amusement park? Not a reasonably priced beverage in the place, and maybe four water fountains in the whole park. If you're lucky. I guess you can suffer from dehydration on a hot summer day instead after eating your cheap pretzel, but that's your prerogative.
@bths2643 I don't see what the problem is with the price of the ps3, it's twice the machine of an x-box, and the wii is barely in the same market,@ $220! Come on people, it only does every thing!
@DanMan I prefer selling cheap drinks and charging for entrance to the bathroom
to the people who commented above, I think it's 47 million in total world wide sales.
What I wonder is when the PS3 eventually ends up in the land of profitability, how long is it going to be there before this generation of hardware is over? I think we're already in Year 5 of this console generation, and with the advent of new technologies I fail to see how within the next two to three years we aren't looking at PS4 as Sony moves on from this respectable yet ultimately underwhelming iteration of their flagship product.
The US Air Force must really piss Sony off. They buy their consoles, never buy accessories, and probably run them into the ground and have them replaced under warranty.
What's funny is that this all could have been avoided if they left out the Blu-Ray. They would have released much earlier than they did, at a lower price, and not bollocksed everything up with the other hardware manufacturers by undercutting their prices to move their game console. It's a good thing Sony makes movies, TVs, and other consumer electronics... not many companies could have survived a mistake of this magnitude.
But Sony had invested interest in blu-ray becoming the next format. So even if they lost money, they made it in blu-ray
@Smurf Speak for your self there blue buddy! Some of us are glad to have such a capable console at an affordable price. Nothing comes close to the value of the ps3. Big ups to Sony! Can't wait for ps4!( well....let me get through uncharted2 and boarderlands, then I'm good to go!)
hahaha loss leader...
@hchilibowl
oxymorons are hilarious!
I have both, the PS3 and 360, never cared to get a Wii. But, the truth is, the PS3 has a lot more features, like built in Blu Ray player, WiFi, and the playstation network accounts are all free. Which is pretty awesome. However, when it comes to games, and just the online community, 360 does dominate , without a question. All my friends play there, and if it wasn't for LIVE, I wouldn't really care about video games.
I don't play much, but when I do, I like to play with people, instead of playing by myself.
I just wish that the 360 had at least half of the features that PS3 comes with.
I waited for the price drop and the newer slim model to by one and I love it. The games are great, but it does so much more.
I thought I had read though that the slim was actually profitable for Sony because of the cost cutting.
@therealjustin
Don't think that these estimates are balls on accurate. With the different currency valuations and fluctuations, as well as about a billion other factors, it's just not the case that this is some hard fact.
All it means is that the PS3 is very close to break even. Probably a little ahead or a little behind, and if you buy one game, or a couple of movies, a sure win. That's a much better situation than earlier.
It's stunning how far the Playstation brand has fallen from the good old days, though. I guess these are hard learned lessons.
PS3 we all still love you...even tho youve been a screw up since you were born...you just had to come out with KZ2 and uncharted and save yourself a place in my heart
wheres the highest ranked comments?
So the way I understand it from all the comments is this,\
I bought my PS3 slim for $300. Sony lost $18 from that. However, as anyone would do, I bought a game when I bought the PS3.
I know Sony makes a profit with the game, but is it known how much money exactly would Sony make on, say, a $60 1st party game?
@Rick Goodman
If I'm not mistaken, Sony makes a $10 royalty on each game sold, so they make it up pretty easily, considering the stuff they sell on PS Home and all of the accessories
They make up for the loss in sales of accessories, such as controllers.
Well, I don't think Sony has lost much money on me. I bought an original fat PS3 back in '08 with 4 new games and 3 additional controllers, along with $20 in credit to the PS Store. Then got a slim 120GB shortly after they released, along with RE5, and some used games (no profit there).
What I don't get is there are quite a few people whining about backwards compatibility, but those people also may have a spare PS2 laying around... It's kind of irritating to read this over and over on any board or post having to do anything with PS3. Quit bitching and go play your PS2, if you sold yours, go and buy a used one, there's nothing wrong with being a cheap ass. Backwards compatibility is not needed, since the market is still saturated with PS2s.
It is hard to track exactly how much sony as a whole is making but as far as their games division go i doubt they can make much. They were making a lost since day one 2006 and if they do make a profit now, they are not selling at a rate to make up for all that. To make games cost millions of dollars now and they have to sell a good amount. They say atleast 500000 to make a profit. They do make money off of royalties tho. Then there is psn which is a money hole. Then there are the peripherals which make money too. There are ups and downs but overall i think everything is down.
yay yay! Ps3 all the way baby! Who cares if it's making a profit. It's the most complete console out there... Maybe that's it's major flaw. To mutch to early. I mean look at it's competetors. They have good things about them such as the wii controls n the xbox lower price tag lol. But they dnt match the awsome blue ray capabilities the hmmm shit. I haven't bought one yet but I'm sure it packs a bigger boom for every shot then the other fu's. Profits well come. Patience young ones. Patience.
They may lose $18 for each console sold, but I think they make $20 for every controller they sell.
@Silent K
don't forget the extra sony branded cables.
Don't forget the PlayStation 3 also pushed Blu-Ray acceptance. I believe they receive royalties for every Blu-Ray capable device and disc out there.
But if they'd die shrink the RSX chip to 45 nm, it could just be the trick.
The Cell Broadband Engine die shrink to 32 nm has been canceled though.
2 cents... 10 cents.. $18, who cares?
All of these companies are still earning pounds/euros/dollars etc faster than you can hammer out your half baked business 'theories' on what you consider to be the correct profit/loss amendments each would require to 'magically' make the aforementioned manufacturers more profitable...
Quick! Apply for a job! Use your post as a reference..
@MrH Somethings are commonsense.
I can't beleive people still complain about BC, get real, that would be like me complaining apple didn't put a floppy drive in my iMac for me to play crystal quest. The ps2 was great but I have moved on. Plus, how fo you have time to play these old titles? I have a wife, school, and sometimes work to attend to so I barely have time to play as it is(I still haven't beaten MW2 which I've had for two months) so if you have that much time to play video games you need another hobby or a girlfriend. Also the blu-Ray alone is worth buying the ps3, but that's another topic.
Why sell the PS3 at all? Sony isn't a good company. The only reason I would screw up my life enough to go wast $300 dollars on a PS3 was to play Kingdom Hearts. And that isn't worth it, in my book. I don't like Sony.
I feel pretty bad for Sony, knowing that they have released the best (or one of the best, to avoid fanboy wars) video game console this generation, and now they aren't even profiting.
Does Sony really think the customers would stop buying PS3 and go to Xbox360 just because it's $18 cheaper? Sony is overestimating the competition and underestimating their brand name.
at this point, no one wants a pos3.
@(Unverified) At this point, you can be cast into oblivion.
Nerds bickering over if Sony makes profit or not! If they didn't make profit they wouldn't be selling PS3 at all.
Market share is always more important than making profit, can always worry about making money later, unless you're a startup or something.