PS4 is NOT sold at a (production) loss.

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#1 Edited by Suppaman100 (3579 posts) -

"Sony's new PlayStation 4 is selling well at its introductory price point of $399, but how much does it cost to make? Research firm IHS iSuppli, long known for its consumer electronics teardowns and cost analyses, has told AllThingsD that the components and the cost of assembly comes to roughly $381."

http://arstechnica.com/gaming/2013/11/report-399-playstation-4-costs-about-381-to-build/

PS3 on the other hand:

"the situation is far better than it was for the PlayStation 3, which sold for a higher $599 but cost an estimated $805 to build because of then-new, expensive components"

Seems good for Sony and with PS+ they are almost certain of making a profit with playstation.

#2 Posted by AMD655 (4495 posts) -

Shouldn't think so judging by it's hardware.

#3 Edited by Consternated (481 posts) -

Seems bad for us, as we're getting a lot less tech for our money this time around.

#4 Posted by Suppaman100 (3579 posts) -

Seems bad for us, as we're getting a lot less tech for our money this time around.

Yeah sucks there's no Titan in the PS4.

jk

#5 Edited by lunar1122 (654 posts) -

@Consternated: sony might stay in business this time however, If they tried to pull off what they did with the ps3 again. They would certainly have to declear bankruptcy. However if ps4 really did launch at a massive loss and the hardware costed something like $800 to build. The ps4 would have been a monster pc and would certainly have me reconsider going only pc this gen

#6 Posted by me2002 (1288 posts) -

They should have sold it at a loss

#7 Posted by gensigns (1476 posts) -

So packaging, shipping and dealer mark up is only 19.00 a unit? Cool.

#8 Posted by Consternated (481 posts) -

@Consternated: sony might stay in business this time however, If they tried to pull off what they did with the ps3 again. They would certainly have to declear bankruptcy. However i can only dream , If ps4 really did launch at a massive loss and the hardware costed something like $800 to build. The ps4 would be a monster pc

Yeah, I know. It's better to have a weak console than no console, I suppose :)

#9 Posted by PinkiePirate (2081 posts) -

Good to hear. Makes me more satisfied with my purchase.

#10 Posted by Netret0120 (1886 posts) -

They make a profit if someone buys 2 or more games and PSN+

#11 Posted by Suppaman100 (3579 posts) -

@gensigns said:

So packaging, shipping and dealer mark up is only 19.00 a unit? Cool.

Could be less. But we'll never know that so with the info given it looks like PS4 is sold at a marginal profit.

#12 Edited by kraken2109 (12950 posts) -

That's what happens when you don't put cutting edge hardware in.

#13 Edited by adamosmaki (9353 posts) -

So no R&D,packaging,shipping costs ? Also retailers get no profit ? They sell PS4 out of charity ?

#14 Posted by gensigns (1476 posts) -

So no R&D,packaging,shipping costs ? Also retailers get no profit ? They sell PS4 out of charity ?

Wal-Mart loves Sony so much they're not taking the 10 or 20% mark-up they do on every other electronic item in the store!

#15 Edited by lostrib (31484 posts) -

If true, it wouldn't surprise me considering how things went with the PS4

#16 Posted by haris12121212 (7556 posts) -

Didn't they say during E3 at Bonus Round or Michael PAchter show that their sources confirmed sony would've announced the price tag of 349$ if the Xbox One was priced cheaper.

#17 Posted by lostrib (31484 posts) -

@gensigns said:

So packaging, shipping and dealer mark up is only 19.00 a unit? Cool.

Could be less. But we'll never know that so with the info given it looks like PS4 is sold at a marginal profit.

You're assuming that the retailers are purchasing the units for only 381?

#18 Posted by Suppaman100 (3579 posts) -

So no R&D,packaging,shipping costs ? Also retailers get no profit ? They sell PS4 out of charity ?

Of course there are other variable costs but we don't know them.

#19 Edited by xxgunslingerxx (4052 posts) -

@lostrib:

I pretty sure i remember sony saying something about the ps4 breaking even if it had ps+ attached to it.
381 plus shipping, packaging plus retailer mark up sony is probably only losing around 20 bucks a ps4

#20 Edited by Boddicker (2272 posts) -

I thought this had been common knowledge for a few months now?

#21 Edited by lamprey263 (22420 posts) -

so this is just based on third party estimates, not actually from Sony's mouth

#22 Posted by jukev2424 (243 posts) -

Seeing as they sold 1 million units in first day, they made $18million in first day, those $18 add up.

#23 Posted by Suppaman100 (3579 posts) -

Anyway the point is that PS4 seems to be in a much better (financial) situation than PS3.

#24 Posted by Floppy_Jim (25416 posts) -

They lose a little in the States and will make a little in the EU. Shouldn't be much, if any, losses at all. Ditto for the Bone I would think.

#25 Posted by MrXboxOne (742 posts) -

This might be why it's cheaply built?

#26 Edited by RossRichard (2305 posts) -

It's $381 for the PARTS AND ASSEMBLY. The machines have to be packaged then shipped to a retailer that is NOT going to sell them for free. So yes, PS4 is sold at a loss.

#27 Posted by ConorHat (138 posts) -

Your sources for hardware costs are unreliable.

#28 Posted by RR360DD (11414 posts) -

Except Sony themselves said they're selling at a loss.

So yeah, Sonys word >>> some estimate.

#29 Posted by mtradr43 (5272 posts) -

Lol. Poor cows think these things are put together, packaged, and shipped for free. If retailers stood to make no money on a console they wouldnt take the space to sell them. Make more sense to sell stuff they could make money on.

#30 Posted by ZombieKiller7 (6194 posts) -

What about packaging, shipping, marketing, warrenty repairs, R&D, etc etc.

The interest rate alone on R&D debt is probably more than the $18 "profit"

My best guess is they're giving away the console hardware for free, and depending on the software to turn a profit.

#31 Edited by masiisam (5717 posts) -

God some the people in SW are fucking stupid. Sony is loosing money on each unit sold. PERIOD…just like MS will loose money on each unit sold. All this is NORMAL at launch and expected, but to say they are not loosing money on each unit is simply heinously stupid.

"What isn't factored into the teardown cost are research and development, advertising, and shipping costs associated with the console" then factor in margin, and mass merchant programs.

Mass merchants such as Best buy, Target, Walmart ETC will make at least 20%. Then factor in slush fund programs which will be another +10%. You think those displays and end caps don’t cost the manufacture money? Those are all pay to play areas. Then throw in destroyed in field, and all the co-op advertising aka in store advertising, flier advertising and commercials.

Sony is far from making any margin on the stand alone units.

#32 Edited by Chutebox (36178 posts) -

@masiisam said:

God some the people in SW are fucking stupid. Sony is loosing money on each unit sold. PERIOD…just like MS will loose money on each unit sold. All this is NORMAL at launch and expected, but to say they are not loosing money on each unit is simply heinously stupid.

"What isn't factored into the teardown cost are research and development, advertising, and shipping costs associated with the console" then factor in margin, and mass merchant programs.

Mass merchants such as Best buy, Target, Walmart ETC will make at least 20%. Then factor in slush fund programs which will be another +10%. You think those displays and end caps don’t cost the manufacture money? Those are all pay to play areas. Then throw in destroyed in field, and all the co-op advertising aka in store advertising, flier advertising and commercials.

Sony is far from making any margin on the stand alone units.

Now, I'm not arguing with you because you're right. But when you call others stupid, for the love of God use the wrong "lose."

Also, I'm pretty damn sure stores don't make much, if anything at all on consoles.

#33 Posted by Bren128 (2352 posts) -

@gensigns said:

@adamosmaki said:

So no R&D,packaging,shipping costs ? Also retailers get no profit ? They sell PS4 out of charity ?

Wal-Mart loves Sony so much they're not taking the 10 or 20% mark-up they do on every other electronic item in the store!

Im actually a wal-Mart manager and we make very little profit off consoles, just like tvs. We're talking a few percent at the most. We make a ton off accessories.

#34 Posted by Heil68 (42598 posts) -

Well I bought 6 games, an extra controller, a charging station and got PSN+. I helped :D

#35 Posted by SinjinSmythe (789 posts) -

@Suppaman100: Yo dumbass. Do you think retailers sell this out of the kindness of their hearts? A $400 console generally costs a retailer $380. Thread fail.

#36 Posted by ni6htmare01 (832 posts) -

Good for them! $399 is a good price (at least for me) and if they can make some profit and still be able to pack in decent hardware, I'm all ok for it!

#37 Posted by Blabadon (25188 posts) -

It's still sold at a loss

#38 Posted by Suppaman100 (3579 posts) -

@Suppaman100: Yo dumbass. Do you think retailers sell this out of the kindness of their hearts? A $400 console generally costs a retailer $380. Thread fail.

No sh*t dumbass.

Now go back to your kinect.

#39 Posted by AmazonTreeBoa (16456 posts) -

No it is not sold at a "production loss", but it is still sold at a loss. R&D, advertising, and shipping cost money. But they do have PS+ to help get that money back.

#40 Edited by Bishop1310 (887 posts) -

@gensigns said:

So packaging, shipping and dealer mark up is only 19.00 a unit? Cool.

Could be less. But we'll never know that so with the info given it looks like PS4 is sold at a marginal profit.

lol no...


economics people.. go to school.

#41 Posted by Suppaman100 (3579 posts) -

The point is, PS4 is doing good when compared to the PS3's situation.

#42 Posted by shawn30 (4288 posts) -

@RR360DD said:

Except Sony themselves said they're selling at a loss.

So yeah, Sonys word >>> some estimate.

co-sign.

#43 Posted by Vatusus (4224 posts) -

The blu-ray costed the PS3 some steam

#44 Posted by -ArchAngeL-777- (3786 posts) -

Yeah that's good news for Sony this time around. That also puts a lot less pressure on their SW titles to be monster sellers which is a good thing. They can green light more new ideas that otherwise might have been too financially risky.

#45 Posted by thedork_knight (866 posts) -

The point is, PS4 is doing good when compared to the PS3's situation.

Shit must backpedal on the original point as i've been proven wrong!!!!!!

#46 Posted by MajesticShea (695 posts) -

Sony so Ca$h