Sony is in even deeper trouble

Nobody likes the $600 price tag of the PS3. People here are aware that Sony takes a roughly $200 loss on top of that price, and they hope to recoup on software sales, which are relatively mediocre. However, that isn't the worst of it. That $200 loss doesn't magically appear right at the sale of a PS3- it means Sony has to fork out that roughly $800 manufacturing price whenever they build a PS3. So every single console made- including the ones that are sitting on shelves or collecting dust in warehouses-are costing Sony quite a loss. It is only at sales that they can get back most of it. So when reckoning profits,Sony's aren't just a loss of about $200 for each console -you also have to subtract $800 for every console manufactured but not sold. They better start rethinking their strategy or they wil run their gaming division into the ground just from manufacturing costs.

sony probably has a board of 50 PHDs figuring out stuff like this...they know what they are doing... 1 console flop isnt gonna break sony, they have more then enough moneyteldath

It´s funny system wars seems to thing their a bunch of idiots that make decisions when they have to without planing anything.

ill need to see a link to back up what you said.

Dear TC:

It's called a long term investment. Sony was well aware of the potential for failure, even the potential of a negative consumer reaction to the price point or any of that junk (Kuturagi would try and tell you otherwise, but I bet he was probably alone in his delusion). Just because they're eating **** right now doesn't mean they haven't set themselves up with some kind of cushion.

Plus, you forget: large companies can go decades without making a profit. Look at Donald Trump...he was literally millions upon millions in debt and here he is, shouting his **** off on television, years later. "Recoup these losses."

Losses? Like what? You mean failing games and hardware division losses that have been incurred since the introduction of the Xbox? Massive market failures incurred by Nintendo since the N64? Those kinds of losses?

Sony is a monstrosity, just like Microsoft, and while they may not be as *nimble* as Nintendo, they still haven't taken as hard a fall as EITHER of them. Given the potential for success of the system STILL at stake (take a look at Sony's 2007-2008 lineup....still smashing. Yep.), it's completely crazy to act like the mighty Titan Sony's going to crumble to the ground.

Besides, what's everyone talking about as the solution? "LOWER THE PRICE, SONY!" "PAY FOR EXCLUSIVE SOFTWARE, SONY!"

And, what, incur more short-term losses for LONG TERM BENEFITS! My, unheard of. So what you're trying to say is that you're not only going against the grain for Sony's strategy, you're going against the grain for Ubisoft's, Nintendo's, Sega's, and Microsoft's strategy, which you apparently happen to think you agree with.

Cost of manufacturing the PS3 has come down.

More examples of kids thinking they know about business :roll:

/thread.

Nintendo didn't go away when they struggled with the N64 and Gamecube. Why should it be any different with Sony with the PS3? People don't take this idea into concideration.hotdaisy18

Nintendo wasnt loosing money at any time, they might have made less, but they didnt loose.

ill need to see a link to back up what you said.

anthonydwyer

http://www.engadget.com/2006/02/18/playstation-3-costs-900-sez-merrill-lynch-mob/

Nintendo didn't go away when they struggled with the N64 and Gamecube. Why should it be any different with Sony with the PS3? People don't take this idea into concideration.hotdaisy18

If it was not for the DS nintendo would have gone the way of Sega.

Nobody likes the $600 price tag of the PS3. People here are aware that Sony takes a roughly $200 loss on top of that price, and they hope to recoup on software sales, which are relatively mediocre. However, that isn't the worst of it. That $200 loss doesn't magically appear right at the sale of a PS3- it means Sony has to fork out that roughly $800 manufacturing price whenever they build a PS3. So every single console made- including the ones that are sitting on shelves or collecting dust in warehouses-are costing Sony quite a loss. It is only at sales that they can get back most of it. So when reckoning profits,Sony's aren't just a loss of about $200 for each console -you also have to subtract $800 for every console manufactured but not sold. They better start rethinking their strategy or they wil run their gaming division into the ground just from manufacturing costs.

ZinkOxide

Considering what's included out of the box with my PS3, I'm liking the price.

Sony will be alright and Im more then a 100% sure that ps3 will outsell xbox 360 and wii eventually.Once the ps3 hits a good price along with titles you will see sony start to pull away.Also xbox 360 aint winng no console war with just shooters and nintendo isnt wiining with just first party titles( I still love you nintendo).Only time will tell and dont say I told you so.

Plus, it took the failure of FOUR console initiatives to bring Sega under. The Sega CD, the Sega Saturn, the Sega Gamegear, and the Sega Dreamcast. ALL COLLOSSAL FAILURES. I suppose Sony's just got a wee bit more wiggle room, especially considering their break-in "semi" success with the PSP and double the successful home console iterations as Sega (who only counts the Genesis as a favorable point in their history).
Redfingers

Nintendo didn't go away when they struggled with the N64 and Gamecube. Why should it be any different with Sony with the PS3? People don't take this idea into concideration.hotdaisy18

At least they made money.

[QUOTE="hotdaisy18"]Nintendo didn't go away when they struggled with the N64 and Gamecube. Why should it be any different with Sony with the PS3? People don't take this idea into concideration.squirrel337

If it was not for the DS nintendo would have gone the way of Sega.

I am well aware of the fact that Sony hopes to make money in the future. Most companies do. However, I must say that they are taking a rather large loss at the moment, and if they cannot reverse their current slump in sales they will find it extremely difficult to make any money. They can hope for future profits as much as they want, but I disagree with the idea of taking a loss on hardware to hope for a recoup on software. They are in a sense taking a huge gamble, because if they can't sell hardware, obviously they won't sell much software either, and not only will they lose money but they will also lose their party dev support for the next generation, as well as much of their fanbase and brand power.ZinkOxide

Taking a large loss on hardware top hope for a recoup in software? You mean what Microsoft is doing this gen?

You're full of nonsense. Stop arguing already. Sony is doing the same thing almost every hardware manufacturer always does. This trend has only been broken by the Wii. Like I illustrated, they are not in dire straights.

They aren't even in as dire straights as Microsoft is and always was and Nintendo was the last two generations.

[QUOTE="squirrel337"]

[QUOTE="hotdaisy18"]Nintendo didn't go away when they struggled with the N64 and Gamecube. Why should it be any different with Sony with the PS3? People don't take this idea into concideration.Unforgiven2870

If it was not for the DS nintendo would have gone the way of Sega.

Someone at nintendo said it themself. Someting along the lines of. In the ds fails we sink into hell if it succeedes we rise to heven. There in no doubt about they were in trouble.

You don't need to patronize me. I am well aware that it has become the practice to sell hardware at a loss. As I have said, I disagree with this. Microsoft does it, and they haven't made a cent on the Xbox brand yet, total. What did they get? Brand recognition. They can afford to drop plenty of money on that, even to lose a generation or two, just to become stablished, cuz they have plenty of other stuff going on. Sony on the other hand is starting to lose its hold in other divisions- the Walkman was beaten by the Ipod, the Ericksson cannot beat the Iphone, and in the TV department other rivals are starting to surface as well. Add to this theri determination to force another format war at a really bad time, when the HDTV penetration isn't half what it ideally should be, and you have a situation for Sony to lose plenty of money. Projecting forward, without a convincing and powerful victory this gen, they will start to lose support and fanbase as well, and then they'd be forced to try something original.ZinkOxide

ok, first off at this point in time sony is only lossing around $50 on the PS3 because the bluray diode has droped from $124 to $8, they have out source the production of the cell to china, cut out the EE chip and went with an emulator, and some minor production streamlining. In some places they make money off it. Secondly the format war isn't hurting them in the least. Yes, I know HDTV hasn't taken off the way everybody thought it would in the US but in febuary 2009 people won't be able to hold off any longer since analog SDTV will dieas it is in most other countries right now. I don't think you really understand how this is working, you can't release a product after the fact, they needed it to have been out and working its way into homes before the change comes since low income households will need the price cuts due the product having been out for some time.

Blu Ray is the most successful side story to this generation and Sony will probably even reap the benefits of its inclusion soon enough.

The only issues are, as you said, music and video games. And with Blu Ray's success, and in becoming a de facto standard (with the support of their movie studios and exclusive third party releases), at least in the HD realm, HDTV sales should benefit as well, which should also kickstart the PS3's appeal. I think home entertainment is really their primary focus right now. They're got a diverse portfolio though, and of course, other areas will suffer, but I think their home entertainment initiative is by no means a failure. They've got that one in the bag, at least commend them on Blu Ray's success.

Microsoft is well aware of the iPod and the iPhone. They no doubt regret bringing the Zune into existence. Vista is a stillbirth of an OS and businesses as well as Dell are beginning to slide back their support for it ever so slightly. Businesses are beginning to look for other options. Hmm...can I stick with XP or should I go with....Linux??

And with their Xbox division not making a dollar still, while the Playstation brand at least had time to flourish (PSP sales and PS2 sales both outnumber the Xbox 360 since launch and also outpace the PS3, and each of these are sold at a remarkable profit margin, with software to support each of them), I think it's unfair to say Microsoft has money to throw around that Sony does not. Yes, Sony is losing money overall this year while Microsoft is not, but Microsoft has to count all their failed initiatives using both hands, just like Sony, with only their favorite Windows OS being their success story.

Microsoft is attempting to diversify its portfolio, but with "touch screen table monitors," "Zunes," and "Windows Live Anywhere," I don't expect it to get very far.

The losses incurred by PS3 barely scratch the surface of the profits incurred by the Playstation, Playstation 2, and Playstation Portable.

They're losing SOME money, but HDTV is the trend of the future: Microsoft has embraced this as well, and with the Elite, they just put a foot in what you consider the "wrong" direction.

Nintendo has made a fantastic move this generation but it is only because of the folly of its competitors. If they hadn't continually blundered, Nintendo would have nothing to contrast to, and the Wii wouldn't seem nearly so much a revelation as a cheap gimmick as it was mocked in its early days.

"Projecting forward, without a convincing and powerful victory this gen, they will start to lose support and fanbase as well, and then they'd be forced to try something original."

This I don't get. I've already laid out a case as to why this is not the case. Everyone's gotten screwed, everyone. Sega, Nintendo, Microsoft, Sony. Everyone. No one but Sega, who incurred losses from four horrifying console/handheld debacles, was permanantly affected by their mistakes.

Don't expect Sony to lose out because of the PS3...lol.

Plus, I'm still expecting Final Fantasy, Uncharted, Metal Gear, all of that, to be as spectacular as I imagine it to be. With a few, "smoother," consumer-oriented options (essentially, selling everything at a WORSE loss in order to increase sales and then their profit margin...instead of, at your suggestion, selling the console at $800 or something as to minimize immediate losses), I think they could bring 'em back, albeit in smaller numbers.

Nobody likes the $600 price tag of the PS3. People here are aware that Sony takes a roughly $200 loss on top of that price, and they hope to recoup on software sales, which are relatively mediocre. However, that isn't the worst of it. That $200 loss doesn't magically appear right at the sale of a PS3- it means Sony has to fork out that roughly $800 manufacturing price whenever they build a PS3. So every single console made- including the ones that are sitting on shelves or collecting dust in warehouses-are costing Sony quite a loss. It is only at sales that they can get back most of it. So when reckoning profits,Sony's aren't just a loss of about $200 for each console -you also have to subtract $800 for every console manufactured but not sold. They better start rethinking their strategy or they wil run their gaming division into the ground just from manufacturing costs.

ZinkOxide

You forgot to factor-in Blu-ray. If Sony is making so much pressure, they must have much to gain if it's adopted. Even if Ps3 fails as console, right now it's helping BR beat HD 5:1, and might prove to be the decising factor in the HD media war.