Sony claims PS3 losses = $3.3+ Billion

railven

Actually this is really starting to hurt the gaming industry, not as much as piracy of course...well alleged.

What I've seen happening more often in the games stores I frequent, people are buying the used copies (of which the industry doesn't see a dime) because of multiple incentives stores such as EB/GS are offering. For example:

1-week rental, you can buy a used game, and return it for a full refund within a week. Of course this isn't a solid benefit, but it is there as long as the consumers don't abuse it - and because once the consumer is aware of it they will abuse it, EB/GS don't openly mention it. But ask them next time you are there.

10% of used games if you are an EDGE member plus bonuses (even more money for the store the industry doesn't see a dime of.)

I've even fallen victim for it. With my Edge membership I saved 10% of used games, if I bought 3 I'd get another 10% of and I had a coupon from Game Informer) for an additional 5% off. That's 25% off 3 used games that are already between $10-20 cheaper than them new. And of all that, the industry doesn't see a dime.

The_Omega_Man

Eh? How's that again?

Quote:

Originally Posted by LordGamer And don't forget our little friend... Blu-ray. I'm sure Sony doesn't mind taking a hardware loss now, against the profit potential they have with Blu-ray.

Mr Chairman speaking to the questionably distinguished, Board of Directors,

"We are projecting a 3.3 Billion dollar loss on the PU3 product line for the last 2 years or so,"

A concerned Board Member speaks out in an audibly concerned tone, "What the hell difference does it make? We have basically mortgaged the company for this thing and Blu-Nay, on the promise of the long term future profitability, which we are guaranteed to see!" "RIGHT Mr. Chairman?" he says in a partially sarcastic but non-rhetorical tone.

"The Chairman instantly speed dials the heads of the BDF, and each one in succession, goes directly into a voice mail ring-tone message, which says "Blu-Ray, it's Beyond High definition! Just Wait for it!" Hesitantly, the Chairman slowly turns back to the Board member asking the question and replies with: "The PU3 and Blu-Nay are the same thing and we Own Both, and we Own the HDM market!" He then bellows out an incredibly sinister laugh. Then he raises his arms in the air, and with his head back as if making an offering to the Gods, shouts, "Blu-Nay, it's Beyond High definition! Just Wait for it!"

The Board members, all of which, understandably, are completely in shock by the Chairman's boisterous display, sit in a collective stunned silence. Finally, an assistant in the back of the room slowly begins a involuntarily contagious clapping, all Board members begin following suit, one at a time, except one. "Sir, I need and answer to my question NOW, please." The uncelebratory board member, asks sternly and with firm directness.

The Chairman, still in his homage to the Gods pose, slowly resumes a normal and solemn posture, his face now showing a very serious expression. After all the other board members realise that the moment of world domination euphoria, has abruptly come and gone, slowly stop clapping and change their focus to the inquisitive board member. Then slowly and in unison, as if well choreographed, they all pan back to the now visibly stiff Chairman, as they all await the answer to the question.

After an long an uncomfortable pause, The Chairman, scans the faces in the room one by on until he reaches the now visibly irritated board member. And in one, hopefully pain minimizing, swiftly spoken blurb, he motionlessly states , "We, as a company and as the Board of Directors are screwed, if the PU3 and Blu-Nay don't make a killing in their respective markets this coming X-mas! More importantly, however, you Sir, are screwed right now! Any MORE questions?"

Quote:

Originally Posted by LordGamer Furthermore, consoles have life even when their predecessor arrives. Once "PS4" hit the shelves (and yes, there will be a PS4),

Hopeful and presumptuous at best! I would tend to think that they have to have a significant market for the PS3 and recoup their losses, before they attempt to market a PS3 replacement and a potentially market confusing product. Timing is everything. If the PS3 tanks relative to the Sony actuaries and marketing expectations, some hard choice will need to be made at Sony.

Quote:

Originally Posted by LordGamer there will continue to be hardware and software sales for the PS3. This is when profits really kick in.

If there is a sustainable market for it, sure. If not, it goes in the closet or garage with the Nintendo 64 and the un used HD DVD player(s).

I would prefer let the Sony actuarial's and product finance department teams, determine just how "Fine," the PS3 is doing right now!

BTW how exactly do you "Make Pleny of Money," in a corporation, when you are posting losses in the same specific business division?

Quote:

Originally Posted by LordGamer Edit... And I don't want to, nor do I feel we need to for obvious reasons go into it; considering Blu-ray is the only major HD disc format available, it probably shouldn't be refered to as a "fiasco."

LMFAO Would "Fluke" be a better term!?!

Edit: Any resemblance to any person or persons living or dead within the previous text, is merely coincendental and in no way is this intended to be a reprint of any actual or real life situations!.. Except in situations where it would be really, really funny!
(Copyright Pending - The_Omega_Man 2008)

venomxr8

Who has agreed with that statement? your multiple personalities?

crazyal

I'm not sure why anyone could think the 360 came out too soon. It was a race and for all M$ knew Sony was going to release the PS3 a year before they did. Loosing a year is huge. Whether or not it has issues is secondary to having a ful year headstart.

The PS2 selling so well is not such a great sign for the PS3. Did the PS sell better than the PS2 for two years after the PS2 came out? Did M$ keep selling the Xbox once the 360 came out? It seams to me that people are sending a sign that they don't need or want the PS3 or are willing to wait until the price drops or the list of games grows.

railven

Releasing the Xbox360 when they did in the end cost them about $2 billion in repairs. Sure, they gained a lot of market share, but they still haven't recouped their losses.

And the PS didn't outsell the PS2 2 years in, but the PS2 isn't outselling the PS3 2 years in either. It was some time last year that the PS3 started to outsell the PS2.

It is odd, that you say the end, the PS3 started to outsell the Xbox360 globally late 2007. That was with still a limited software library. If what you said is true, it could be said more of the Xbox360 since its sales since 2007 have dropped, last strong blip was Halo 3.

crazyal

The only reason the PS3 is outselling the 360 is the anti M$ sentament outside the America's, mainly the market in Japan. This is the PS3 saving grace when it comes to numbers sold. That one year head start has given the 360 a 6 million player lead here in the states that the PS3 hasn't put much of a dent in.

How many of those people who bought a 360 before the PS3 came out would have chosen differently if they had a choice (other than waiting a year)? Plus M$ is now one year ahead of Sony when the next gen comes out and will also enjoy the "first to maket status".

From everything I've read March of this year was the point that the PS3 started outselling the PS2. Since then I haven't seen sales numbers for the PS2 so I can't say how it's selling.

So what do you think, if the 360 came out about the same week and year as the Wii and the PS3 how would it be doing right now?

LordGamer

Quote:

Originally Posted by The_Omega_Man Eh? How's that again?

Simple, hardware loss alone does not indicate the success. As I mentioned before, the bulk of profit comes from software and accessories (royalties and licenses).

Furthermore, consoles have life even when their predecessor arrives. Once "PS4" hit the shelves (and yes, there will be a PS4)...

Quote:

Originally Posted by The_Omega_Man Hopeful and presumptuous at best! I would tend to think that they have to have a significant market for the PS3 and recoup their losses, before they attempt to market a PS3 replacement and a potentially market confusing product. Timing is everything. If the PS3 tanks relative to the Sony actuaries and marketing expectations, some hard choice will need to be made at Sony.

"Hopeful and presumptuous," no. It's the history of gaming. If there is anyone here that believes there will not be a PS4, you really should move on. I'm not trying to be insulting, but you (in general) obviously have very little knowledge of the gaming industry and the history of the business. I do not know what anyone is basing the possibility of there not being a PS4 on, but even if the PS3 "failed," there have been several successors to "unsucessful" hardware. And the notion that Sony is in some sort of deep financial trouble is laughable. People read a few articles and suddenly become corporate financial experts. Sony isn't going anywhere and even if the PS3 didn't make them another dollar, they would still have the resources to develop another platform.

The original Xbox division did not make a profit until this year. It took roughly six years before they saw a profit and that did not stop them from developing and releasing 360. The 360 was released, before MS had a "significant market" or "recouped their losses." The gaming business is not about making a profit on x product now. It's a much bigger and gradual process.

...there will continue to be hardware and software sales for the PS3. This is when profits really kick in.

Quote:

Originally Posted by The_Omega_Man If there is a sustainable market for it, sure. If not, it goes in the closet or garage with the Nintendo 64 and the un used HD DVD player(s).

There will be a market for it. Unless a console fails miserably out of the gate, it still has life for years to come. Sony was still producing the original Playstation up until two years ago. That is over a decade from its original release.

Quote:

Originally Posted by The_Omega_Man I would prefer let the Sony actuarial's and product finance department teams, determine just how "Fine," the PS3 is doing right now!

Yet, everyone is quick to point out "losses" and trouble they're having without any inside or detailed knowledge. As I mentioned earlier, people that aren't in the know, need to quit pretending they are. But my statements were in reference to the system's sales. Which as I stated, is outselling 360.

Quote:

Originally Posted by The_Omega_Man BTW how exactly do you "Make Pleny of Money," in a corporation, when you are posting losses in the same specific business division?

Again, long term. If one doesn't know the process or understand it, please move along.

Quote:

Originally Posted by The_Omega_Man LMFAO Would "Fluke" be a better term!?!

"Fluke" doesn't help your cause. A fluke is defined by good luck. If you want to say Blu-ray is "lucky," fine. But it's far from a "fiasco." Fiasco is a failure, i.e. HD DVD. Regardless, of how one tries to spin it, Blu-ray won the HD disc battle and is having success. What level of success it will reach is unknown, but to call it a failure or to knock it at this stage, is what the kids would refer to as "hatin'."

Bottomline... If someone is only looking at hardware loss and passing judgement, they have no idea how the industry works. Blu-ray, software, accessories, etc, will easily make up for the hardware loss and bring a nice profit over time.

LordGamer

Good post. Perhaps everyone should look into and research this more as well.

railven

In the end mine, yours, anyone elses opinion about releasing when they did is just that - opinions.

Anti-M$ feelings or not, the fact that the 360 has enjoyed the largest failure rate in videogame history didn't help their image. Call it patriotic or brand-loyalty, but don't you find it odd that the only strong market place the 360 has left is the US? And even that got erased quickly by the Nintendo Wii.

Your statement about Microsoft being a year ahead of Sony in terms of the next console is also speculative. There are multiple examples in multiple industries when the first to market wasn't the first the market on the following generation of hardware.

If anything, I can say Microsoft has spent a lot of R&D time fixing their current units and addressing issues that internal workers have openly stated Microsoft ignored to get their product out first.

Microsoft rushed their product, they didn't look far into the products life, and are now sort of paying for that. Thank fully it is Microsoft, I don't think any other corporation could afford the losses the Xbox division has earned. ~7 years in the market, about ~7 billion in losses, and only 3 quarters that reflected revenues.

And even the last two quarters I'd question since they didn't mention the $1.3 billion Microsoft said they lost in the warranty extension.

Joe_news

Honestly...wow...where to EVEN begin.

MikeRox

How so? The Ps3 has outsold the 360 everywhere except the US now and with the current slow sales of both consoles I don't think anyone is going to be in a rush to push for even better graphics and higher development costs for games.

I think we're at a nice point personall, where the consoles will all really have the most made out of them this gen. I can certainly see it being far longer than last gen.

I'm looking forward to the casual approach Microsoft is going to try later this year, I actually love the quiz/karaoke/party games etc that you can play with a few friends and family round and a decent supply of alcohol.

MikeRox

God knows, it's gonna be at least 3-4 years before the PS3s successor comes out, let alone support for the PS3 drying up.

dsskid

Thanks for your unbiased viewpoint. It's refreshing.

MikeRox

Indeed, of course there is also the fact that once they hit break even, software sales will continue to increase, yet losses will just cease. A stage Microsoft have yet to manage to crack, though hopefully this new iteration of the 360 rumoured to come out soon will help this.

I feel taking a loss on hardware as a long term approach is very unhealthy for the games industry as a whole and leads to Microsofts "switch and run" tactic which was used in the transition from Xbox to Xbox 360. Something which no doubt burned quite a few would be 360 owners given that in the UK, they didn't actually release the Xbox until Q2 2002, and by 2005 they were telling companies not to create software for it anymore and pushed straight onto the 360. That made the Xbox a $200 per year console over here for it's actual lifespan based on the launch RRP.

HD Goofnut

Here I was thinking their losses were going to be much more than $3.3 billion dollars. I don't care for Sony and if they go bankrupt that's fine by me because even if the game base dries up the studios will still be releasing BDs.