Consumers attack! Sony takes $2 billion HP damage
by Nick Doerr 
{ Jul 24th 2006 at 7:30PM }
Analysts, schmanalysts. Punch Jump news posted an article Friday regarding Sony's manufacturing costs for the PS3 and the outcome, determined by analysts. Each PS3 unit, regardless of the SKU, costs Sony $750 dollars to manufacture. After a year, the analysts predict, Sony will get hit with a $2 billion deficit. To Sony, that may not be much, but that really is a damage dealing amount regardless of your company's current position.Sony expects to make up for the pitfall with positive game sales. If their expectations fall short, there's danger to be had. Especially since manufacturing and development costs are high,
Reader Comments (Page 1 of 1)
Kid Muscle @ Jul 24th 2006 8:49PM
Thats why I'm waiting to see the sales of the PS3 through 2006....if they sell almost as much as they ship....then I'll get a PS3....if not, then I might wait, or just get a 360....
Luckily 360 failed to sell 10 million by nov 2006 as predicted....so it's still anyones game.
Geof @ Jul 24th 2006 9:28PM
MS did fail to ship 10 million consoles by nov 2006? How do you know this...um....have you traveled to the future?
Last I was knew of, it was July 24th...but eh, what do I know?
sputnik @ Jul 24th 2006 9:55PM
MS has 4 months to sell 5 million units to meet the 10 million projection. I think they will make it by Christmas.
Sony is setting themselves up for a catastrophe. A 2 billion dollar loss in the first year with more to follow. What if Blu-Ray doesn't take off. And it's looking like the price of the PS3 will keep it from taking off. Which means they will have to lower the price early...which means extended losses for Sony. It looks like they've backed themselves into a really crappy corner. If I had stock in Sony...I would be looking to dump it right about now.
Kid Muscle @ Jul 24th 2006 9:59PM
It took them 8 months to sell 5 million (maybe just under), they have NO strength at all in Japan.... They will not make the deadline...not even close.
nick @ Jul 24th 2006 10:36PM
The 360 didn't go on sale until the last week of November, was impossible to purchase, and didn't really arrive in any quantity to where it was purchasable until May 2006. I'm not sure you can predict how the next couple of months will unfold, now that you can actually buy the thing. I think it's certainly possible for them to hit the 10 million mark by year end. Come Christmas, everyone is going to want a console, and this'll be the first Christmas where you can walk into a store and actually buy one, instead of hearing, 'I don't know when they'll be in a stock, check back next year.' And Japan is not the only factor. The original Xbox never sold in Japan, and this one doesn't appear to be any different. What's really amazing is that there's 5 million consoles out there despite not selling well in Japan.
One thing is for certain, it'll hit 10 million consoles sold before the PS3. Sony will be lucky to have 2 million consoles available for sale this year.
Hey didn't Sony just borrow almost a billion dollars earlier this month? Wouldn't that make them 3 billion in the hole?
Kid Muscle @ Jul 24th 2006 11:02PM
Yeah M$ hurt itself with not supplying enough units, and all the errors that arose due to a rushed release. But come christmas, 360 won't necessarily fly off the shelfs because it will be competing with Wii's cheap price, and Playstations brandname.
Xbox always has trouble in Japan, and it doesn't matter how well you do in one territory, you need the support of all of them to win.
Personally I beleive Wii will probably own all the other consoles since it's initially the cheapest, (unless the wiimote is nothing but hype)...but eventually 360 or PS3 will win the generation.
Sony has said they will be shipping 200,000 at launch and then 2 million in the following october....with around 6 million by March 07. If they meet their target, it could cause problems for 360 (assuming the price doesn't scare people away).
But the fact that 360 is losing sales to PS2 (a 6 yr old system), shows just how weak the 360 sales are so far.
Deth @ Jul 24th 2006 11:32PM
^ That must be one of the most illogical statements I have heard. Of course a $130 PS2 will outsell a $400 360. I do not have data, but I would be willing to bet that the NES outsold the Genesis and SNES for quite some time into the 16- bit generation.
Cheers!
insane_cobra @ Jul 25th 2006 9:38AM
Many people, especially those from poorer countries and those who buy consoles primarily for their little kids, grab consoles at the end of their cycles, when they're cheap and backed by a sizeable library of affordable games. That's exactly what I'll do with PS2 in a month or two and PS3 in 4-5 years.
I hope I'll be able to afford a Wii and an Xbox 360 in the meantime.
SuicideNinja @ Jul 25th 2006 11:37AM
"BAD, SONY!"
That's something you don't want to copy! LOL
I guess it's Sony's turn to turn a sizable loss on consoles as that was Microsoft's job the last round.
I wouldn't pit the Wii against the 360 or the PS3. Price is important, but you have to remember that a many of core gamers, no matter what Nintendo does, will perceive the Wii as a childs toy. We don't naturally, because we know better.
The "idiot" consumer looking for a "mature" console sure isn't going to stake out a Wii...if they even know what that is. From what I've seen...many don't...
"Wii? WTF is that?"
Fine with me, really. It will make one easier to find.
As far as the 360 goes, I don't think Microsoft will necessarily hit the goal either since it doesn't seem that they calculated for the slow summer months. I wouldn't be surprised if they got close though.
The PS3 will likely mimic the 360's hiccuppy start; high demand, lots of shortages. For me, the PS3 doesn't really launch until a Final Fantasy title is available.
Jay @ Jul 25th 2006 3:28PM
i think microsoft has gotten away clean with what should be a horrible start to their system. I own an xbox 360 and i feel like it was a waste of my money. first and foremost the hardwre itself has so many problems. i purchased mines about 2 months ago wayyy after the deadline and im getting the same game freezing, CD's getting scratched, overheating problems that were reported when it first came out. i really do not appreciate the fact that i pay 60 dollars for a game just so the system i paid 400 dollars for can scratch it!!..
if the PS3 can avoid problems like that from occuring as it seems they are doing by taking their time with the launch then im very confident it will be a success. i play online ALOt and the general consensus on xbox live is that people are waiting for ps3 to come out so they dont have to deal with half of the nonsense that 360 has. if PS3 delivers u will see alot of 360's on ebay.
and lets not forget that the 360's game lineup is very OVERRATED. there are very few games that i are good or that cant be played already on the PC with the same exact graphics
Also i dont think PS3's price point will scare anyone away who thinks logically. if u buy an xbox 360 for $400, plus a wireless adapter for $100, plus a play and charge kit for 20, plus an HD DVD player addon which will cost over 100, ur paying more then the cost of the higher sku PS3 and not even getting as much!! even if u take away the HD DVD player it still does not even add up to wat the ps3 gives you...people need to stop whining about price
Cage @ Jul 25th 2006 6:45PM
Jay...you dont have a 360
The MonkeyRobot @ Jul 26th 2006 9:38AM
Kudos to the graphic; Dragon Warrior was one of the first games I played.
Oh, and I don't wanna see Sony out on the street asking for dollar-dollar-bills-yo - that would be sad.
sputnik @ Jul 26th 2006 10:56AM
LOL Jay. Good luck finding a PS3 this Christmas...yet alone one that won't have some hardware problem.
When folks looking for a PS3 realize that they probably won't be able to get their hands on one...the readily available 360 thats siting in the isle across the way with bundled PGR3 will be very tempting. Especially the 50+ 360 games next to Sony's 14 or less launch titles which half of which will have been out on the 360 already (Fight Night, Madden, NCAA, etc.)
And lets not forget the bundling that's going to occur making the cost of entry even more for a PS3.
Jay @ Jul 28th 2006 5:46AM
yes i do own a 360...go check the NBA 2k6 online leagues im a regular there gamertag Jayizratedx...i also own fight night round 3 and oblivion. fight night and nba 2k6 are good games...oblivion bores the hell outta me. xbox may have lot of games but most of these games are really not that good. the only other worthwhile game so far in my opinion is Ghost Recon which is already on the PC. there are many other good games but nothing great. i think people who dont own a 360 hype it up way too much because they havent seen the real deal.
im not even trying to discredit the system, i think the system itself would be excellent if it didnt have the many problems and the ideas they implemented are also great.
i may not get a PS3 at launch which is fine i can wait. but i definitly do not expect to see half of the problems that i have seen on my xbox. it is ridiculous for a new system to scratch a disc u paid so much money for and the amount of bugs i have not seen on any other system. can it happen to the ps3 and wii? of course but it is not expected because of the standard they have set for themselves for quality throughout the years. playstation and nintendo have never had any of these complaints before and it seems to me these mistakes are a consequence of microsoft rushing out the xbox.
and how bout that wii sitting next to the 360 for an even lower price? people who are hardcore gamers and who are familiar with the industry are very much so underestimating the power of the playstation brand over the average consumer. the fact is regardless of price PS3's are gonna sell like hotcakes just off the name alone.
and as soon as its out there and people realize that they are getting more then what the xbox can offer for the same or even lower price the name will hold even more weight.
I dunno about everyone else but i strongly beleive ill be getting my moneys worth with a PS3 and if the games are like what i have on PS2 then they are the games that i love to play and will be expecting to see on ps3.
IN MY OPINION, xbox did not have half as many excellent games as PS2 and if that continues to follow suit, then 360 will never sell more then ps3. its also notable that playstation games in general appeal to a much broader audience. games like final fantasy sell millions worldwide. xbox has what? Fable? sorry but that game SUCKS.
Xbox 360 will be a great system but sorry alot of xbox games just have a certain style that does not appeal to ALOT of people and on a worldwide scale the brand name cannot compete with sony.