Originally Posted by Lee Stewart
Originally Posted by J_Palmer_Cass
How much money Sony loses in a year is not an issue related to streaming. Guessing about how much money Sony loses on PS-3's each year is an estimate based on nothing factual.
No guessing - right from Sony's mouth:
Pricing the PlayStation 3 below its production cost caused Sony to lose $2.16 billion in 2007 and $1.16 billion in 2008, the company revealed today.
Sorry if that upsets you. It definitely seems to as you want to play make believe it didn't happen.
How much Sony loses in a year does not bother me one bit. I do not own any Sony stock!
I also do not know how Sony accounts for development costs, nor for software sales and subscriptions (and the like).
PS-3 sales for 2007, the time period where Sony showed a $2 billion loss, includes only 3 months of sales for the PS-3.
Your link here: http://kotaku.com/5018899/sony-lost-over-3-billion-to-ps3-cost-pricing-imbalance
Maybe competition also had something to do with those loss. Microsoft lost a lot a money in that same sector. Microsoft did not break out hardware profit or loss for the X-box hardware.http://www.pcworld.com/article/148982/xbox_delivers_a_profit.html
"XBox Delivers a Profit
By GamePro, gamepro.com Jul 26, 2008 10:15 am
NIntendo is king, but Microsoft's gaming division still managed to post its first ever year-long profits this week.
The latest NPD report may have been all Nintendo (again), but Microsoft had a milestone of its own worth crowing about this week: its gaming division posted its first full-year profit, ever.
It's quite an accomplishment for the division, which houses the Xbox team, especially considering the multi-year losses it has posted year-over-year before today.
As of June 30, the Xbox division on its own made Microsoft $426 million in operating profits, and $8.1 billion in total sales. According to the company's 4th quarter report, those numbers are up 34% from the year before, when it lost the company nearly $2 billion. Of course, the Entertainment and Devices division (which houses the Xbox team) as a whole still ended up losing $188 million for the year.
In its report, Microsoft said the gains were due to increased Xbox 360 sales, Halo 3, Xbox Live subscriptions and services, and accessory sales.
In addition, have you ever heard the term "loss leader"?http://en.wikipedia.org/wiki/Loss_leader
"Video game consoles
Video game consoles have often been sold at a loss while software and accessory sales are highly profitable to the console manufacturer, a tactic first utilized in the sixth generation era. Sony and Microsoft, with their PlayStation 2 and Xbox, had prohibitively high manufacturing costs so they were forced to sell their consoles at a loss, and these losses widened especially in 2002–2003 when both sides tried to grab market share with price cuts. Nintendo had a different strategy with its GameCube, which was considerably less expensive to produce than its rivals, so it retailed at break-even or higher prices. In the current generation of consoles; both Sony and Microsoft have sold their consoles, the Playstation 3 and Xbox 360, respectively, at a loss and made up for it through game software and accessory profits
(Nintendo again prices its Wii at break-even or higher prices, as it is cheaper to make). For this reason, console manufacturers aggressively protect their profit margin against piracy by pursuing legal action against carriers of modchips and jailbreaks."