PS3: Sony's $3.32 billion gift to gamers
by Andrew Yoon 
{ Jun 24th 2008 at 11:00AM }
It's a well-known fact that Sony has been losing a lot of money on the PS3 this generation. Although it's the most expensive console on the market, it's also the most expensive to produce, thanks to the combination of bleeding-edge technologies, Blu-ray and the Cell processor. When the system launched in fiscal 2007, the Japanese electronics giant had to swallow a whopping cost of $2.16 billion. Fiscal 2008, however, has been much kinder to the company, with PS3 hardware costs eating up $1.16 billion, thanks to the lowered cost of manufacturing. Combined, PS3 has cost the company $3.32 billion dollars ... so far.The astronomical figure Sony has invested into the PS3 shows its confidence in its success. However, the company did note that unless it reaches "favorable market penetration," the PS3 would have a "significant negative impact" on the company's profitability.
Software is where the company will the company will recoup costs, and with an excellent holiday lineup in store for PS3 gamers, we're sure that Sony has little to worry about for the rest of this generation. But remember, while other companies are eager to make profit off of you on day one, Sony put their necks on the line to give you a great deal on a monstrously powerful system.
[Via Joystiq]
Reader Comments (Page 1 of 2)
browntown @ Jun 24th 2008 11:05AM
Doesn't this figure include r&d which incliudes the cell. They can recoup some money from havign cell in different things, but i think blu-ray will get them alot of money eventually. Ultimately they had to look beyond playstation and make it into a media hub. Shoulda been a cheaper media hub at launch but watever, maybe they can spare some money for my uni education?
SimplyB @ Jun 24th 2008 11:08AM
Thank you Sony!
ulrichgaming @ Jun 24th 2008 11:08AM
Seems like a fair statement.... It's a shame they got punished for actually bringing out a real next gen console.... hopefully they won't scale back their ambition for the PS4.... either way that day is a long ways off....
deaftly @ Jun 24th 2008 1:47PM
How is it the only "real" next gen console? idiot.
grammasofranek @ Jun 26th 2008 12:31PM
why the hell would they make a ps4 when ps3 sells like shit
kentuckyfried @ Jun 24th 2008 4:24PM
They shouldn't have gimped the ps3 by including only 512 mb of ram. That's been an annoying argument by the 360 crowd as to why the ps3 sucks at this and that (then again, the 360 only has that amount as well but its a shared bank of 512 mb, blah blah blah).
Memory being so cheap, why did both companies opt for only 512 instead of a 1 gb standard? Would future memory expansion have driven up the cost substantially?
blake @ Jun 24th 2008 11:08AM
FTA-
"Software is where the company will the company will recoup costs, and with an excellent holiday lineup in store for PS3 gamers, we're sure that Sony has little to worry about for the rest of this generation."
wow, holy-run-on-sentence Batman!
benny boy @ Jun 24th 2008 11:13AM
And there's a mistake on the first line...
Paul (PSN: heypaul) @ Jun 24th 2008 11:31AM
Actually, that's not a run-on sentence at all. Just a long one.
You should really learn the terminology first before you play grammar police. Here's a little help: http://en.wikipedia.org/wiki/Run-on_sentence
Sean Kelley @ Jun 24th 2008 11:54AM
@Paul
Read the sentence again. Remove "wil the company"
Paul (PSN: heypaul) @ Jun 24th 2008 2:47PM
Oops, didn't see that at all. Even so, that's still not a run on sentence.
Kenology @ Jun 24th 2008 11:11AM
"But remember, while other companies are eager to make profit off of you on day one, Sony put their necks on the line to give you a great deal on a monstrously powerful system."
LMAO @ this melodrama! This has got to be the spin of the century. Nice one, Yoon!
Roto13 @ Jun 24th 2008 11:12AM
No. This is not a gift. Gifts are free. This is Sony taking a risk. Not some wonderful gift to consumers because they love them so much.
Christian @ Jun 24th 2008 11:18AM
Well you get the Blu-Ray player for free, you just have to pay for the CPU :)
Hala Madrid!! (Madrileno hasta la muerte!) @ Jun 24th 2008 1:02PM
@Christian
blu-ray for free lol
oh wait ur serious let me laugh even harder lololololololololololol
:p
45nm @ Jun 24th 2008 11:13AM
Well risky decisions are almost always part of the equation of success. As long as those exclusives keep coming, I don't think they have too much to worry about with manufacturing costs going down. I like sony's new way of thinking about consoles, putting as many features as possible in a sexy black case, backs up as a sweet bluray player...
Crafty @ Jun 24th 2008 11:19AM
No offense but please have someone with just a little business sense write a post on business news.
AnimaOnline @ Jun 24th 2008 9:51PM
It's funny. Most Xbox 360 owners, including myself, are anoyed at Microsoft for making a broken product with the famouse 'Red Light of Death' problem. Owners of Sony's Playstation 3 seem more than thankful though.
I'm sure that with In-Game XMB, Trophies, Home and a range of amazing exclusive titles planned for the Playstation 3's near future Sony will be more than happy with the outcome.
frankym @ Jun 24th 2008 11:20AM
Lets hope we start getting the good games on time from now on.
No more delays please!
Mostyn @ Jun 24th 2008 12:24PM
Its is a gift , my PS3 is worth more now on ebay than i payed for it from launch day. 60gb PS2 BC.
JaseH @ Jun 26th 2008 12:32PM
"Software is where the company will the company will recoup costs, and with an excellent holiday lineup in store for PS3 gamers, we're sure that Sony has little to worry about for the rest of this generation."
wow, holy-run-on-sentence Batman!"
________________________________________
________________________________________
"LMAO @ this melodrama! This has got to be the spin of the century. Nice one, Yoon."
________________________________________
Andrew Yoon.
'The little nerdy classmate we all love to pick on.'
________________________________________
JaseH.
Devin @ Jun 24th 2008 11:27AM
Blu-Ray is what held the PS3 back and see what happened: Blu-Ray won the format war, so IMO you can confidently say that Blu-Ray profits should also play into their Game Division profits, as well, right?
If this is true, then PS3 is doing even better than what's shown on paper.....
totoro @ Jun 24th 2008 11:31AM
That number seems par for the course. Microsoft lost some 4 billion developing the first Xbox, and who knows how much on the 360, and they have only had 2 profitable quarters so far.
To put 3.3 billion in perspective-Microsoft took a $1.1 billion charge last year for warranty repairs for the RROD (for current and future warranty repairs for that one issue).
Phantom @ Jun 26th 2008 12:31PM
Yea , but they only lost 1.1 billion because they made a crap console that has some sort of issue 90% of the time , or breaks completly 33% of the time .
Kruegmeister @ Jun 24th 2008 11:38AM
True, True...
But they will end up making more in the End.
The PS2 made them a TON of money after losing the 1st few Years.
I too took advantage of the "Make Microsoft Lose more Money".
Yeah, I was one of those Lucky +33% to get the Red Ring of Death... My Sons friend just got it too a few weeks ago...
Ours was in October after the Reports by Gamestop & Bestbuy about the 33% failure rates. After having the system almost 2 years (My sons friends was almost 2 years as well).
So I wonder if that 33% figure is higher than 33% now??? I wonder if the Lemon Law applies here. Of course the Department of Justice couldn't take Microsoft down for their Windows Monopoly, so I guess that is why Microsoft has not been sued under the Lemon Law yet. Nobody can touch them... or you'll end up with Cement Shoes I bet...
Sean Kelley @ Jun 24th 2008 11:46AM
So you would sue them? For what?
Your box red rings, you call them up and they give you a replacement system. Try that with a car. Lemon law... please.
Sean @ Jun 24th 2008 11:40AM
Yeah right...
SONY is looking out for us? What a bunch of BS. They want our money, nothing more, nothing less.
The problem is that the consumer wouldn't buy the PS3 at it's intro price. SONY didnt figure they would have to lower the price so soon and then create a new model so soon and then try and woo third party developers so soon.
Don't mistake business and marketing blunders as a gift to the consumer. SONY, Microsoft, and Nintendo could care less about us.
JaseH @ Jun 24th 2008 11:43AM
I think we can all agree Microsoft haven't done well when it comes to "losses" either... "for now".
___________________________________
JaseH.
Seba501 @ Jun 27th 2008 12:37PM
The Ps3 has a good and strong hardware, But is too expensive to sony make it.
MexicanTerrorist @ Jun 24th 2008 12:06PM
Bring out those exclusive games and then you'll see some profit Sony.
ClockWyze @ Jun 24th 2008 12:50PM
yea and quit cancelling games that ppl are looking forward to. Ie Getaway and Eight Days....lol I'm still pissed over that. At least there's MGS4, Gran Turismo Prologue, Unreal Tournament, Ratchet and Clank, Heavenly Sword, Motorstorm, Resistance and Uncharted Drake's Fortune.
There's no reason for idiots to say there's no good Sony exclusives And MGS4 is REALLY good meaning not only game of the year material But maybe best game ever created material lol. The only way i see MGS4 not getting game of the year is because of LittleBigPlanet. I have to see how that game plays to see if it can take the crown. Any true gamer(forget fanboys) should definitely be interested in the PS3 right now. I can see someone loving the 360 but the RROD issue is to big of an issue 4 me. I actually have the 360 but I haven't turned it on since January....seriously
Nick @ Jun 24th 2008 2:11PM
UT isn't exclusive.
Ghaleon @ Jun 24th 2008 12:53PM
Just try reporting news for once, don't act like an arrogant global conglomorate forced Blu-ray on its users because THEY HEART YOU and enjoy losing billions of dollars.
Aircraftkiller @ Jun 24th 2008 2:27PM
They didn't force anything. It was bundled as part of the package. If you didn't like it you could have, gasp, not bought it.
/personal responsibility
//lost on most people
Popfrogs @ Jun 26th 2008 12:31PM
You put the gay in ghaleon. See, I can troll this blog too! I feel like I just joined your little club.
Ogre722 @ Jun 24th 2008 7:49PM
I'm always up for some "favorable penetration".
Dembonz @ Jun 26th 2008 12:32PM
Even though the PS3 may be a little pricey to some, I still believe it's a very good deal. Sony just needs to come up with more exclusive titles that show the PS3's muscle. I don't mind giving Sony my money if they give me what I want, which is more kick-ass games.
The future belongs to PS3 :)
Mike @ Jun 24th 2008 1:13PM
Better this gift, than the multi-billion "gift" that Microsoft gave Xbox owners... LOL...
kentuckyfried @ Jun 24th 2008 5:01PM
lol...the constant fear and dread of RROD! That and the Gift of The Ever Present Loud Fan and the Required Xbox Live Gold Membership to Play Online.
Fraser JK @ Jun 24th 2008 1:57PM
This doesn't change a thing!
maxpontiac @ Jun 24th 2008 2:39PM
Yes sir.
This industry is all about gifts.
We as consumers give the biggest gift of all.
We purchase their product and keep the name "Sony" on the forefront of the industry.
chrisnick @ Jun 24th 2008 3:02PM
'But remember, while other companies are eager to make profit off of you on day one, Sony put their necks on the line to give you a great deal on a monstrously powerful system.'
......point made... we could have been payin for online capabilities to make up for this...and i still don't have to complain about a red ring of anything.....plus home... and a killer line up of games.....money well spent.
Eggy @ Jun 24th 2008 3:35PM
Yeah it's an investment alright, don't discount blu ray royalties either.
Ted @ Jun 24th 2008 4:33PM
1st xbox 360 lasted 2 years. Miscrosoft send me a new onw
1st PS3 lasted 2 weeks. Sony sent me a new onw.
360 Live; I've had countless hours of fun gaming online.
PS3: Zero hours of online fun.
360: tons of great games.
PS3: one great game.
Eggy @ Jun 26th 2008 12:31PM
First of all. WTH do you reply to my post with something completely irrelevant. Second of all nobody is going to care about your bullshit fanboy rant so piss off already.
kentuckyfried @ Jun 26th 2008 12:31PM
I don't really make that comparison since I buy all my multi-plats for the ps3 unless there's a compelling reason not to do so. *shrugs* Enough of those + exclusives to keep me entertained, plus 360 exclusives on top (Dead Rising, GOW, but no Halo).
MexicanTerrorist @ Jun 24th 2008 6:37PM
GTFO Ted.
Kira @ Jun 24th 2008 6:46PM
Sony has sacrificed a lot,they obviously could use some support. But there is that great deal on Nyko controllers.... So much cheaper than a SixAxis.
Edwin @ Jun 26th 2008 12:31PM
Oh please, such a powerful system then were are the jaw dropping graphics 2 years later? Yeah, there are known so whats the use people whats the dam use of having such a powerful system not to mention the memory is just to low no matter how effective they can use it, 512MB is shit. And by the way i own a PS3 and i think the 360 hardware sucks as so im not a fanboy here im just talking the truth. Ustedes son unos lambones pendejos.
Konchu @ Jun 24th 2008 8:36PM
I'm not saying this to dis the PS3 or Sony but there is more to this than generosity. Simply put Microsoft also put out a fairly high end system in the 360 and they also took a lose on them.
If you look at many of the games on both systems at least at this moment there is not a huge divide in visual quality yet. Sony had been researching Cell and Blu-Ray but ultimately the need to have a system out to compete with MS and that made the build they put out now. They had originally planed on 2 cells instead of the nvidia GPU but as we see we got what we did due to it being the best choice in those final steps of putting all the tech together, unfortionitly this cost Sony a lot of money. But the alternative was to let MS have the market even longer while they waited for their tech to get cheaper.
Really only Nintendo makes a profit day one anymore. Now if competition ends like some people want for some silly reason there would be no way in hell MS or Sony would take a loss on hardware. People seem to forget Sony was planning a PS 1.5 that was a PSX with slightly better video but competition changed all that so I say viva la console wars.