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343 Comments
- truspector, on 06/27/2008, -9/+234MS and Sony have both lost a fortune on their current gen systems. MS, starting a year earlier, is beginning to see profitability and has for the past three quarters. Sony cut their losses in half between FY1 and FY2 so I would expect them to be profitable come FY3. The bottom line is we NEED both of these companies to survive in the market. If MS hadn't come along the PSN would not be half what it is today, in-game XMB would be launching with the PS4, MS would have ***** on everyone that got the RROD, we would have never seen open video formats on the 360, etc, etc, etc. Bury me as deep as you can, but if you can pull your head out of your respective companies ass for one minute to read this comment you will know it is the truth.
- LR2_, on 06/27/2008, -4/+174You can't forget that the PS3 helped Sony win the Blu-ray vs. HD-DVD war. Their $3.31 Billion investment wasn't set aside solely for the console wars.
...In comparison, I wonder how much money the HD-DVD camp lost. - CollapseControl, on 06/27/2008, -45/+171Apparently Sony thought that the whole PS2 user base would buy the PS3 no matter what the price or what games were released with it. Man, were they wrong and took a hit for it.
- kingdomdude, on 06/27/2008, -19/+130Dang.
The tagline for this story is spot on; "Mario and Master Chief seen hi-fiving." - jacksons98, on 06/28/2008, -30/+130As a PS3 owner I say Thank you Sony. PS3 is by far the coolest toy I've bought for myself in a long time.
- phaxian, on 06/27/2008, -8/+96figured something was up when ps3 was the same price as a stand-alone blu-ray player. meh.
- roxya, on 06/27/2008, -16/+82Considering they were selling it at a loss, if every PS2 owner bought it they'd have lost even more.
Logic for the fail :( - iamjero, on 06/28/2008, -5/+52Other side of the coin:
In 2005, The xbox division posted losses of 4 Billion in 4 years.
http://www.joystiq.com/2005/09/26/forbes-xbox-lost ...
As early as 2007, The Xbox division also posted losses of 1.7 Billion.
http://digg.com/gaming_news/Xbox_Division_Posts_1_ ...
So, there is a trend. Selling hardware does not make money ( in most cases. Look at ms software division. They are rolling in the cash )
Hopefully someone will post some NEWS, and soon. - YouRookies, on 06/27/2008, -16/+60You rookies, with the money they made from PSX and PS2, they're still in the profit zone. Also, $3 billion was worth the investment on Blu-Ray. They're set until digital downloads.
- worminater, on 06/28/2008, -6/+39Nintendo has *never* sold a console at a loss.
- inactive, on 06/28/2008, -2/+33Hey *****, look up. Thats his point flying way the ***** over your head.
- whiledo, on 03/25/2009, -2/+33The fools, they priced it too LOW. If they had just priced it at a billion dollars a piece, they would have only needed to sell three to be in the black!
- bigbadgoat, on 06/28/2008, -3/+32and they were taking a loss on launch day too.
- rpeterclark, on 06/27/2008, -4/+32Maybe in the very long term, Sony themselves don't sound to optimistic about recouping the $3.3 billion.
- inactive, on 06/28/2008, -7/+32The RRoD thing must have KILLED MS in profits. I love the ***** out of my 360 and think its the best of the 3 by far, but I have had to have it repaired 3 times so far. It was all at MSes cost too.
Props to MS for at least standing behind their product and extending the service for 3 years. That had to cost them a ton. - geekchic, on 06/27/2008, -28/+47Most companies lose money when they lauch a major new product as they seek to gain market share as fast as possible. Sony is no different in this regard. and those losses will turn into profits in the long term.
Look at telecoms operators, for all our complaining about quality and prices - most of them are still repaying the debt they acrued as they built out their networks. - inactive, on 06/28/2008, -11/+30Doesn't seem to be happening so far. No one is buying blu-ray movies, and there aren't very many hit games on PS3. I still boycott Sony since the root kit debacle, and I have to say I'm glad they are losing their asses.
- LostnTransition, on 06/28/2008, -5/+23You missed his point apparently. They wouldn't have stood behind their product if the Wii and the PS3 hadn't been released. They were forced to extend because they knew people weren't going to spend another few hundred dollars on a console that would die a month after the warranty expired. If not for the other consoles and I quote:"MS would have ***** on everyone that got the RROD."
- WhereAmI, on 06/28/2008, -1/+18He means PLAYSTATION/PSOne. It was called that before the PSX you are referring to came out.
- dysonlu, on 06/28/2008, -4/+21Can anyone spell "long-term strategy"?
- Krystof82, on 06/28/2008, -14/+31Worth EVERY penny. Not just a gaming machine, it's a entertainment center.
- Matt2k, on 06/28/2008, -2/+17And a Geforce 8 performs at about 570gflops according to wikipedia. And I bought one of those recently for $200.
So while I love my PS3, this is really nothing record setting or revolutionary
I have a modest home PC system and it plays games at a much higher resolution and quality
On the other hand, all my PS3 games run, more or less, consistently well, as every developer knows the exact configuration they're working with. As a result, my console games generally run smoother, with less tweaking. Albeit at a much lower resolution
Flops is not a great benchmark for general computing - rpeterclark, on 06/27/2008, -7/+21They reported a $1.9 billion loss in 2007: http://www.gamedaily.com/articles/features/xbox-di ...
The Xbox division is turning a good profit these days, but not sure how long it will take for them to recoup the initial loss: http://www.joystiq.com/2008/01/24/the-xbox-turns-a ... - burnedtubes, on 06/28/2008, -2/+16It must be obvious day at Camp Stupid!
- justz00t, on 06/28/2008, -3/+17Yeah bad for you and other PC gamers only..
- kingdomdude, on 06/28/2008, -3/+17the rumor is 800 bucks.
http://www.engadget.com/2006/02/18/playstation-3-c ...
http://laptoplogic.com/news/detail.php?id=1698 - inactive, on 06/28/2008, -2/+15Back before the current generation launched, EGM had a several page spread talking to the heads of the US branch of the big 3 game companies. When asked about the $599 price of the PS3, the head of Sony said that he didn't believe price would be an issue, because they were Playstation, and everyone that owned a PS2 would buy a PS3 regardless of the price. I think that is the cocky attitude 1randomguyO8 was referring to.
- ThinkBox, on 06/28/2008, -3/+16Yeah, Blu Ray does well, but its hard to prove that is just because of the PS3 - you cant make a format successful because a $500 Gadget also uses it.
Blu Ray needs to sell itself to be popular, if you are losing to DVD really badly, that means you entered the market before it was really there.
And even though they are the only show in town, of all the rich people I know, most of them are not aware Blu Ray exists (moms and dads, real product pushers).
When a premium product has been out this long and the high end buys barely know you are around, you changing need to start your business model.
Lastly, even if it was making TONS of money and winning a lot of customers, that cannot support all the money you are losing in the gaming industry.
Company stockholders control the company. If Sony cant show a big link between the PS3 and Blu Ray, or get some great games out soon, they are going to really lose their market share in a big way.
Let me try to clear this up a little --
PS3 helps sell Blu Ray.
But PS3s still arent selling as well.
So PS3 gives Blu Ray a tiny push in a format war that few people are participating in.
PS3 share of the market is no very good. (PS2 doubles its sale month over month, even after a big title like GTA4)
"NPD analyst Anita Frazier said the success of Grand Theft Auto IV is not translating into big hardware sales for either the PlayStation3 or the Xbox 360 games consoles"
So the PS3 was sacrificed by Sony to win in a format war that isnt catching on. And by time the next generation of consoles comes out, and they cost $500-$1000 people will remember which games they had the most fun playing, not that it played $30 movies.
.. and that CANT be good for the PS4 and the future of Sony. - inactive, on 06/28/2008, -4/+17Sooo? if people didnt buy the system = lose money(because of initial R&D costs)
And if Millions of people DO buy the system = Also lose money?
logic fail - TiMMY8765, on 06/28/2008, -5/+17winning the format war made it all worth it
- inactive, on 06/28/2008, -0/+12Loss yes, but not nearly as big of one.
- SpeedSteamBoat, on 06/28/2008, -0/+11Actually, production costs are dropping so eventually it will make money. That can only happen if people continue to buy the system.
- robmmiller, on 06/28/2008, -7/+18First off, I own both the 360 and PS. Once I received the PS3, it's been used non-stop for movies and games. I haven't had one problem with it and enjoy it immensely. I rarely touch the 360 now... and no, I'm not a fanboy. I just found the PS3 to do more for me than the 360 for general media.
- inactive, on 06/28/2008, -4/+14Sony and MS are in two very different places.
The PS division of Sony was by far one of their most profitable, they counted on that to make them money. I am not saying Sony is in trouble or anything, but they cant shrug off the PS3 not doing well.
MS on the other hand is making gobs of money in other areas, and never relied on their gaming division for a big chunk of their profits. And even though they lost money at first, they are doing MUCH better this generation than they did in the last one, even leading in some areas.
In the end both companies will be fine for a while to come, but the loss is something Sony is going to feel more. - GregFD3S, on 06/28/2008, -0/+10How much does one of these PS3 units cost Sony to make?
- LostnTransition, on 06/28/2008, -2/+12No.
- Gorrondonuts, on 06/28/2008, -0/+10Don't you just love it when people try to digg you down for asking a question that shows no real bias. I mean downloadable content was supposed to be the selling point for the 360 version, which most people thought gave it a clear advantage, but the effect hasn't been as large as I thought it would be. So Terra2imports, was it for the bluray or are you just following the natural progression of things and going from a ps2 to a ps3
- inactive, on 06/28/2008, -6/+16Sony didn't win the format war due to the PS3. They won it due to paying off Hollywood studios to back their format. They will need to recoup that loss also before they show a profit. Blu-ray sales are still flat because of the price of the disks. People are still buying DVD instead, so I guess it actually won the format war.
- Cyrus042, on 06/28/2008, -0/+9Well PS3 and 360 both share the ability to stream media from a PC. However, I believe the PS3 has broader sharing compatibility since any DLNA program will work. In addition, I believe it also has better DivX support too. In general it has a lot of bells and whistles that just simply make it a better media center. It's quieter, the upscaling is better on regular DVDs and while you discount Blu-Ray it's really what completes the package.
I have to say though, when you ask "Other than Blu Ray..." you're trivializing the most important function of it as a Media Center.
Plus those who have a PSP can connect wirelessly from any hotspot and stream media from the PS3 and also their PC too if they've set up media sharing. (and some games) That's pretty impressive. And let's not forget either, it's a hell of a lot more reliable and the harddrive is non-proprietary. Plus you can install Linux as an OS and a bluetooth wireless keyboard / mouse set up and use other apps.
Is that a more reasonable explanation? - inactive, on 06/27/2008, -1/+10From a purely business perspective, they don't have to. One of the tax advantages that big businesses have is their tax load. You can apply your division losses against your total corporate tax load and then the loss dissappears in a poof of paperwork, When it is a company that makes 20-30 billion a year profit. they can sustain a lot of losses for a lot of years before it affects their bottom line. There is a time limit though, but you get to reset the clock if you ever show a profit. I expect that is Microsofts strategy the rest of this generation, show a billion proft or so every quarter, then they will lose s couple of billion dollars again going into the next-get.
- phorty40, on 06/28/2008, -1/+10Thats exactly it , they thought all their 3rd party developers would fall over themselves to be in line on the PS3 bandwagon since the ps2 did so well and it just didnt happen.
Its business , MS has a lot of money and gained an enormous foothold in the next gen market a good year before the ps3 released and than re-released and so on.
its no ones fault except for Sony's and their arrogance in not planning on "what if they dont back us again" and thinking that it would be a privalege for developers to work for the ps3. - sugarazor, on 06/28/2008, -0/+9I was thinking that GTA4 would probably be the biggest selling game on the console. MGS4 might be the biggest exclusive, but GTA4 will probably still sell more.
But if anything is going to get me to throw down $500 on a PS3, it will certainly be Little Big Planet. - ddb320, on 06/28/2008, -0/+8Anyone know... did PS2 start as with a loss like this then come around?
- MrFettuccine, on 06/28/2008, -1/+9He probably got it for free online play maybe? I mean that was one reason I got a PS3. That and I got an awesome deal and I like the few exclusives that are left a lot. I mean, the online isn't great like the 360's but it satisfies me enough especially since it is free.
- LethalGeek, on 06/28/2008, -4/+12and yet the machine is completely limited by the GPU's ability to do it's job. Sounds like those expensive new CPUs belong more in academia than in a game console
- inactive, on 06/28/2008, -15/+23Yeah I hated that cocky, arrogant attitude they had all along.
- cyrix, on 06/28/2008, -2/+10I can't believe I'm seeing this. You of all people showing some support for the PS3? I feel like I should be afraid right now for some reason.
- cyrix, on 06/28/2008, -10/+17True, but what they lost on actual hardware costs they will more than make up for exponentially in blu ray and software licenses.
- mal1964, on 06/28/2008, -5/+12Sony Is different they owned the market share. The market was waiting and set out their best platter, Sony just over-priced the meal.
- zybez, on 06/28/2008, -2/+9i use the ps3 as a computer. and im glad sony lost money over it- because it just passed the savings onto me!
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