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I am not sure if this belongs here, but thought of updating PS3 lovers that, now apparently there is no reason you should expect a price drop.

http://videogames.yahoo.com/feature/...he-ps3/1223467


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Think you paid too much for your Playstation 3? Don't expect any sympathy from Sony.


In the company's fiscal 2008 annual report, Sony revealed that they've now lost roughly $3.3 billion (that's billion with a B) on the Playstation 3 since its launch. That breaks down to $2.16 billion in 2007, followed by a notably smaller but equally daunting $1.16 billion loss in 2008.


The reason? Pricing the console below its production cost. That's right - that hefty $599 you paid for the PS3 back when it first launched was significantly cheaper than the cost of producing it in the first place, and while the retail price has come down some, the losses keep piling up.


Investors have reason to sweat. In a statement, Sony claimed "the large-scale investment required during the development and introductory period of a new gaming platform may not be fully recovered." They went on to note that they've invested a great deal of money into R&D for the console, a sum they might not be able to recoup if the PS3 "fails to achieve such favorable market penetration."


Sony fanboys should take heart, however. Losing money on hardware is relatively common in the video game biz, as companies routinely lower prices to sell more units and thus stimulate software sales. Sony's game division saw a 26% sales spike last quarter, a trend they expect will continue on the strength of strong exclusives like the recently released Metal Gear Solid 4 and the upcoming sequel Resistance 2.


But will it be enough?


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Sony are probably aiming to recover as much as they can via BD sales (which aren't much yet) and games.


In supermarket terms, I believe this is called a loss leader.....


Seggers
 

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Quote:
Originally Posted by seggers /forum/post/14171013


Sony are probably aiming to recover as much as they can via BD sales (which aren't much yet) and games.


In supermarket terms, I believe this is called a loss leader.....

You are correct, but a 3.3 billion dollar loss leader that Sony noted they might not be able to recoup is a little different than selling bananas for $0.29 per pound to bring in a captive shopper.
 

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Quote:
Originally Posted by jpco /forum/post/14171327


You are correct, but a 3.3 billion dollar loss leader that Sony noted they might not be able to recoup is a little different than selling bananas for $0.29 per pound to bring in a captive shopper.

Sony used the PS3 to win the format war. Now on the plus side they will get royalties not just on the games sold, but also on the manufacture of the Blu disks (which they dominate) and the format (which they have the majority of $ ownership although not the most number of patents). So the money Sony will make for each game may probably end up being greater than any other console maker.


Sony is now the most important company that owns signficant IP in the successor of DVD. If Microsoft decides to put Blu Ray on the xbox, guess who gets paid? Sony.


All in all, $3B is not as great as people think it is. I bet a lot of it is just accounting. In any case past losses are already factored into the current value of Sony and only future profits will matter. I believe Sony is now close to breaking even on the PS3 and are slowly but surely gaining big time market share from the xbox 360. If I were a betting man, I'd say that end of 2009, Sony comes up with a competitive version to the wii (in terms of controllers and types of games - but with a high def experience).


Add in networked content that is coming and Sony has a clear winner on their hands. $3B loss is nothing! Hasn't Microsoft lost something like $5B on the xbox unit and unlike the PS3 it is clearly in it's decline period and Microsoft needs a new product soon!
 

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2007

~$2 billion U.S.$ lost on PS3 consoles (hardware)

~5 million PS3's sold worldwide

loss of ~$400 per PS3 sold


2008

~$1 billion U.S.$ lost on PS3 consoles (hardware)

l~10 million PS3's sold worldwide

loss of ~$100 per PS3 sold


Sony would have had the sell the PS3 for about $1,000 when it first came out to make a gross profit per unit sold, but hardly anyone would have bought a PS3 for $1,000. So Sony subsidized it and ended up winning the format war with the PS3 Trojan Horse.
 

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I am just glad I can buy it as Bluray player that loads discs in a reasonable time!

I bet if they sold a player only with the same processing it would retail for $1500+
 

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Quote:
Originally Posted by ddingle /forum/post/14171498


I am just glad I can buy it as Bluray player that loads discs in a reasonable time!

I bet if they sold a player only with the same processing it would retail for $1500+

I believe Sony sold their ownership in the cell processor to Toshiba to cover some of their losses from the PS3 earlier this year (was announced the same day Toshiba called it quits)



Ironically the same processor is to drive Toshiba's new SUC technology for DVD as well as the PS3 for Blu Ray (and IBM for their new media streaming product)!
 

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Quote:
Originally Posted by SQUIDWARD360 /forum/post/14171504


Have they really won anything when the Wii is solidly outselling the PS3 and DVD is still the leading formet?

That's the question! For gaming, they're still basically in third. For movies, yes, they won the HD format war, but they still haven't displaced DVD (nor do I think they will for some time, if ever). Being a hardware geek, though, I think the PS3 is an amazing piece of equipment at any price.
 

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Yeah, but this is the gamble to game makers play. You lose on the consoles to get market share and then make it back on royalties from licensing 3rd party games and then of course your own games. The problem with Sony is the same problem that has plagued them in the past: they just assume people will buy because it is a Sony. They did the same with the PSP, the same with their minidisc movies. Sometimes it works sometimes it doesnt


What really hurts is that they are losing on multiple fronts. Their PSP has not been the success they hoped although considerably more successful that the PS3. Bluray disc has not developed as quickly as they hope on both the movie, game and computer market from which they get shared royalties from. They are just now getting their firt major launch title in Grand Theft Auto IV. And their computer and laptop sales are nowhere near what they used to be: Remember when the Viao was one of those must get laptops?


Furthermore, they gambled on the PS3 more than they ever have before. They assumed it would sell no matter what they priced it at so they bundled it with a Bluray to serve two agendas: win the video game market and at the same time decide the format war. While PS3 was a main cause of Bluray winning (many forget how much of a play this was in stopping bluray from getting tanked by HD DVD from the onset), they overestimated how much a gamer would pay for a game and that it is the titles and features of a system that sells and not the spec's. So the Xbox 360 with its year ahead start and somewhat comparable hardware was in cruise control mode with a string of hit titles (Gears of War, Halo, the new Maddens.....), and they were caught off guard that people will pay for a underspec'd system with genuine innovation in the Wii.


So yeah, Sony is in trouble. They are not going to tank though. Japan is a strange country where many economists consider them a communist country with a capitalist system (they have the philosophy of communism in a for the group mentality and government really stepping in to help their economy... alot, but on the other hand are as capitalist in their business ventures as you will find) so tokyo wil not let Sony fall assunder. Although, it may be a long road ahead.
 

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Similar with cell phones. They they take a loss with the hardware, but over time the software / services is where they make up the $$$$.
 

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Hopefully this doesn't mean that they'll keep bluray discs expensive to make up for the PS3 losses. I recently contributed to their $3B loss by buying a 40GB PS3 for $215
. Now waiting for some cheap bluray discs.
 

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I'm surprised their accountants even noticed.
 

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Quote:
Originally Posted by chix /forum/post/14173309


Similar with cell phones. They they take a loss with the hardware, but over time the software / services is where they make up the $$$$.

So what happens to cellphones when android is released??
 

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Quote:
Originally Posted by Spektricide /forum/post/14175188


So what happens to cellphones when android is released??

Android-based cellphones without a contract will be considerably more expensive than the usual subsidized phones we're used to seeing (speaking as a USian). This is the same thing that's happening with the Openmoko-based phones (list price is $400, which people are scoffing at).
 
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