AVS Forum banner
1 - 20 of 105 Posts

· Registered
Joined
·
32 Posts
Discussion Starter · #1 ·
For several reasons:


1. Sony is subsidizing the PS3, losing between $200-$300 on every unit. It's intentions are to make back the losses on game sales/licensing. But if a majority of people are buying a PS3 to watch movies, game sales will be low in comparison to the number of systems sold. This will deter game companies from making more PS3 games (which are difficult to program for anyway).


2. A PS3 is much more expensive to make than a stand alone, considering it does everything a stand alone does, but includes a large hard drive, wireless controller, blue tooth, that crazy cell processor, etc. If Sony can make a PS3 for $700-800, why can't they make a stand alone for less than $500? If it's so important for Blu-Ray to succeed, why are they releasing players with huge profit margins? I think the huge profit margins is the real reason BD got all the CE support. If Sony left BD off of the PS3, they could've released it at the same price at an X-BOX360 and sell 2 to 3 times as many units. Then, they could've released a stand alone player for $500 and a PS3 BD add on for $200. - Had they gone with this strategy, I think BD would've already won the war.


I bought a PS3 only to play movies. Sony lost $200-$300 to me and will never make it back on game sales. I truly believe that Toshiba never subsidized the HD-A1. I believe that a stand alone HD or BD player can be made for under $500. The BD side just wanted huge profit margins.


Doesn't Sony also get money from every BD movie sale? If they are subsidizing the PS3 to eventually make back its money on game sales, why doesn't the same logic apply to stand alone players and movies?


David
 

· Registered
Joined
·
6 Posts
Manufacturing costs will quickly drop and I am sure they have a break even point in the near future. Remember Sony was 2nd to market in game consoles and BD, so they could not afford to skim, taking early profits from early adopters, so they have taken a cost projection, based on volumes and time, and have priced it so that in the long term, they will be profitable. Of course this also means that I don't think you will see the price of PS3 reduce for a very long time, while Microsoft may have some room to drop their prices.
 

· Registered
Joined
·
354 Posts

Quote:
Originally Posted by VAHOBACO /forum/post/0


For several reasons:


1. Sony is subsidizing the PS3, losing between $200-$300 on every unit. It's intentions are to make back the losses on game sales/licensing. But if a majority of people are buying a PS3 to watch movies, game sales will be low in comparison to the number of systems sold. This will deter game companies from making more PS3 games (which are difficult to program for anyway).


2. A PS3 is much more expensive to make than a stand alone, considering it does everything a stand alone does, but includes a large hard drive, wireless controller, blue tooth, that crazy cell processor, etc. If Sony can make a PS3 for $700-800, why can't they make a stand alone for less than $500? If it's so important for Blu-Ray to succeed, why are they releasing players with huge profit margins? I think the huge profit margins is the real reason BD got all the CE support. If Sony left BD off of the PS3, they could've released it at the same price at an X-BOX360 and sell 2 to 3 times as many units. Then, they could've released a stand alone player for $500 and a PS3 BD add on for $200. - Had they gone with this strategy, I think BD would've already won the war.


I bought a PS3 only to play movies. Sony lost $200-$300 to me and will never make it back on game sales. I truly believe that Toshiba never subsidized the HD-A1. I believe that a stand alone HD or BD player can be made for under $500. The BD side just wanted huge profit margins.


Doesn't Sony also get money from every BD movie sale? If they are subsidizing the PS3 to eventually make back its money on game sales, why doesn't the same logic apply to stand alone players and movies?


David


I believe, I believe....I believe you don't know what your talking about. "Sony lost $200-300 on me and will never make it back on game sales" Let me explain why companies are quick to lose $$ on hardware consoles. The more consoles that are made, the more publishers will make software for that console,in turn the more software that is sold, the more money the console manufacture will make...M$,Nintendo and yes,Sony all make a certian % on each game sold.It's around $7.00 a game or so out of the $59.95 they get for each game sold.So you see,this is why companies don't mind losing money on consoles,they make it up through accessories and games...it's called back-end marketing,this is where the money is.
 

· Registered
Joined
·
509 Posts

Quote:
Originally Posted by VAHOBACO /forum/post/0


1. Sony is subsidizing the PS3

Thohiba did (is doing?) the same with their HD-DVD players
Quote:
2. A PS3 is much more expensive to make than a stand alone

Today maybe, but down the line Sony will make money when they sell one.
Quote:
I bought a PS3 only to play movies. Sony lost $200-$300 to me and will never make it back on game sales.

You made their launch look better (very important) and lets see how many games you have in a few years..
Quote:
I truly believe that Toshiba never subsidized the HD-A1.

They sold a complete PC with a HD-DVD + special hardware for audio etc for 499$, doesn´t sound like awesome profits to me..
Quote:
Doesn't Sony also get money from every BD movie sale?

All in the BluRay camp gets money, not just Sony.


If BluRay becomes the standard HiDef format it´s a move that will produce profits from here and the next 15+ years. At the same time the price for making Discs with PS3 games will be reduced thanks to the large volumes of BluRay Movies.
 

· Registered
Joined
·
9,460 Posts

Quote:
Originally Posted by Shuley /forum/post/0


I believe, I believe....I believe you don't know what your talking about. "Sony lost $200-300 on me and will never make it back on game sales" Let me explain why companies are quick to lose $$ on hardware consoles. The more consoles that are made, the more publishers will make software for that console,in turn the more software that is sold, the more money the console manufacture will make...M$,Nintendo and yes,Sony all make a certian % on each game sold.It's around $7.00 a game or so out of the $59.95 they get for each game sold.So you see,this is why companies don't mind losing money on consoles,they make it up through accessories and games...it's called back-end marketing,this is where the money is.

I believe, I believe....I believe you don't read vs skimming through what he said. You just made his point. After all that giberjab about how much the companies make he stated he is not going to be buying the games for the system.
His PS3 is only for movies only. Are we on the same page now.
 

· Registered
Joined
·
10,609 Posts
I bought the PS3 to watch Blu Ray movies on.


If I ever buy a game it will likely be at the goodwill or salvation army. (It may take several years.)


It's working out great for me and I bet it's working great for Sony too, I've bought 6 Blu Ray movies thus far and I rented 3.


-Brian
 

· Registered
Joined
·
1,657 Posts
I too got my PS3 mainly for Blu-Ray movie playback but I did go out and buy RFOM and I also got 3 additional PS3 games for Xmas (all at full retail price) so Sony has already gotten back their subsidy from my purchase (and I am sure that they will do likewise eventually from the vast majority of early adopters like myself)...
 

· Registered
Joined
·
2,881 Posts
If you don't think that the Blu Ray association (sony gets a big cut of that) will be making bucks off of the licensing of the Blu Ray movies, think again.


If Blu Ray wins (which I think they will) they will be reaping the benefits of your purchase for many many years.
 

· Registered
Joined
·
240 Posts
Sure quite a few people have purchased the PS3 for Blu-ray movie playback, but once standalone players prices drop and better performing players appear, the PS3 for movie playback will end.


I for one purchased the PS3 due to the strong reviews for Blu-ray and of course the price, but once standalone players prices drop and performance increase I will be purchasing one.
 

· Registered
Joined
·
42 Posts

Quote:
Originally Posted by VAHOBACO /forum/post/0


For several reasons:


1. Sony is subsidizing the PS3, losing between $200-$300 on every unit. It's intentions are to make back the losses on game sales/licensing. But if a majority of people are buying a PS3 to watch movies, game sales will be low in comparison to the number of systems sold. This will deter game companies from making more PS3 games (which are difficult to program for anyway).


2. A PS3 is much more expensive to make than a stand alone, considering it does everything a stand alone does, but includes a large hard drive, wireless controller, blue tooth, that crazy cell processor, etc. If Sony can make a PS3 for $700-800, why can't they make a stand alone for less than $500? If it's so important for Blu-Ray to succeed, why are they releasing players with huge profit margins? I think the huge profit margins is the real reason BD got all the CE support. If Sony left BD off of the PS3, they could've released it at the same price at an X-BOX360 and sell 2 to 3 times as many units. Then, they could've released a stand alone player for $500 and a PS3 BD add on for $200. - Had they gone with this strategy, I think BD would've already won the war.


I bought a PS3 only to play movies. Sony lost $200-$300 to me and will never make it back on game sales. I truly believe that Toshiba never subsidized the HD-A1. I believe that a stand alone HD or BD player can be made for under $500. The BD side just wanted huge profit margins.


Doesn't Sony also get money from every BD movie sale? If they are subsidizing the PS3 to eventually make back its money on game sales, why doesn't the same logic apply to stand alone players and movies?


David

Sony is able to subsidize the losses on the PS3 because the PS2 still earns Sony close to $2B a year and will continue to do so until the year 2010. There is an article in Business Week that came out two weeks ago regarding this. PS2 has sold over 110 million machines. Sony nets about $8 per PS2 machine and receives licensing fees of close to $1.8 billion a year on the PS2.


Stock analyst projects that the PS2 will remain the number 1 selling console until the year 2009. This is why Sony can afford to lose $200 -300 per PS3.
 

· Registered
Joined
·
361 Posts
Building a user base for a new format is a tricky proposition. There's the typical chicken-and-egg game where content developers wait for an installed base and consumers wait for content.


Including Blu-ray in the PS3 helps tremendously to jump-start the process of building an installed base. Selling early units at a loss is typical of Sony's strategy with their consoles (the PS2 was much the same) because they'll be producing the same basic design for the next ten years, giving plenty of time for cost reduction. Since the bulk of sales occur later in the console's life, selling units through the middle and end of its life for even $25 profit can counterbalance the $200-$300 loss up front.


The cost of virtually everything in the system will drop dramatically over time, and the Blu-ray drive is no exception. The one part that had me confused is the hard drive. Typically, hard drives don't get cheaper to make over time - they just get higher capacities. I think Sony has two options there: embrace the need for high-capacity drives with game/movie downloads, or go solid-state in a few years. The latter option is actually starting to look viable.
 

· Registered
Joined
·
2,669 Posts

Quote:
Originally Posted by mboojigga /forum/post/0


I believe, I believe....I believe you don't read vs skimming through what he said. You just made his point. After all that giberjab about how much the companies make he stated he is not going to be buying the games for the system.
His PS3 is only for movies only. Are we on the same page now.

I think Sony is perfectly ok with you buying the PS3 *only* for Blu-ray. Heck, at this stage of the game, they probably prefer it since the format war is the one that needs to wrap up sooner. And the sooner they win that war, the more ok they'll be with having given you a subsidized player.

Quote:
Originally Posted by DarkAdept /forum/post/0


The cost of virtually everything in the system will drop dramatically over time, and the Blu-ray drive is no exception. The one part that had me confused is the hard drive. Typically, hard drives don't get cheaper to make over time - they just get higher capacities. I think Sony has two options there: embrace the need for high-capacity drives with game/movie downloads, or go solid-state in a few years. The latter option is actually starting to look viable.

Exactly, and on the storage front, I believe that both the standard HDD sizes will increase as time goes on, and they will evetually go solid-state as well, maybe with the release of the PSThree down the line.
 

· Registered
Joined
·
4,046 Posts

Quote:
Originally Posted by DarkAdept /forum/post/0


The cost of virtually everything in the system will drop dramatically over time, and the Blu-ray drive is no exception. The one part that had me confused is the hard drive. Typically, hard drives don't get cheaper to make over time - they just get higher capacities. I think Sony has two options there: embrace the need for high-capacity drives with game/movie downloads, or go solid-state in a few years. The latter option is actually starting to look viable.

I think you hit the nail on the head with this one. Sony won't be taking a loss on this system for long as soon as they can manufacture blu-lasers in high enough quantity to meet demand. I believe that this could be part of the reason why they have adopted this trickle effect of introducing new PS3's to the market.


Is Sony taking a loss now? Yes. How long will they take a loss? Only they know. But something tells me that Sony has done a day or two to do some research about when it will become profitable.


I know they've already made some of their money back on an additional controller and the BD-remote from me. I have also downloaded Blast Factor for $8 or $9 and I have rented several games.
 

· Registered
Joined
·
1,440 Posts

Quote:
Originally Posted by VAHOBACO /forum/post/0


I bought a PS3 only to play movies. Sony lost $200-$300 to me and will never make it back on game sales. I truly believe that Toshiba never subsidized the HD-A1. I believe that a stand alone HD or BD player can be made for under $500. The BD side just wanted huge profit margins.


Doesn't Sony also get money from every BD movie sale? If they are subsidizing the PS3 to eventually make back its money on game sales, why doesn't the same logic apply to stand alone players and movies?


David

I find it very touching to see how much you care about Sony's well-being. Don't worry, my friend, they will be fine. Instead of worrying, just get a couple of movies and enjoy watching them. That will surely help your and Sony's well-being.
 

· Registered
Joined
·
1,213 Posts

Quote:
Originally Posted by fa8362 /forum/post/0


Anyone have any theories on why so many enthusiasts think they're marketing experts?

That one made me laugh. I do think a lot of AVS members probably do think they could do a genial job of running the BDA's marketing, but in practice I wouldn't say that's an entirely accurate statement.


As to the topic of the original post.....It is my personal opinion that without PS3 blu-ray would be dead in the water. Those 1000+ players simply would not do enough to halt the charge of HD DVD at $400 street price with 3 free movies. Whatever success blu-ray has had as of late, one has to attribute a large portion of that to PS3.
 

· Registered
Joined
·
1,666 Posts

Quote:
Originally Posted by VAHOBACO /forum/post/0


For several reasons:

I truly believe that Toshiba never subsidized the HD-A1. I believe that a stand alone HD or BD player can be made for under $500. The BD side just wanted huge profit margins.

David

Congrats on your xcellently priced BD player. If you truly believe that Toshiba never subsidized the A1, you drank the red koolaid. They probably aren't subsidizing them now, and I expect the next gen BD players to be closer in price to Toshiba's current pricing strategy. The problem is that all of the G1 BD players shipped in the last 60-90 days (or less), so they can't very well replace all of them with $600 models just yet. By late summer this will be less of a problem.
 
1 - 20 of 105 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top