Analyst: PS3 won't break even
by Alan Tsang 
{ Oct 30th 2008 at 3:30PM }
DFC Intelligence, a firm that specializes in marketing research for the video game industry, have had mixed feelings about the PS3 since its launch. Just compare some of their predictions from the past here, here and here, with other ones here, here and here. Their latest forecast for PS3, unfortunately, includes a little more doom and gloom for our favorite console.
Senior technology analyst Wanda Meloni believes "Sony has the most to lose this current generation" and she doesn't believe the PS3 will "break even" in its lifetime. Additionally, she predicts only 40-50 percent market share for Sony, as oppose to 67 percent during the PS2 era. Regardless of what place the PS3 ends up this generation; in the end, do you think PS3 will make a net profit for Sony?
Senior technology analyst Wanda Meloni believes "Sony has the most to lose this current generation" and she doesn't believe the PS3 will "break even" in its lifetime. Additionally, she predicts only 40-50 percent market share for Sony, as oppose to 67 percent during the PS2 era. Regardless of what place the PS3 ends up this generation; in the end, do you think PS3 will make a net profit for Sony?
Reader Comments (Page 1 of 2)
Miguel @ Oct 30th 2008 3:37PM
I think Sony would be more than happy with a 40 to 50% market share.
Nate @ Oct 30th 2008 3:58PM
Exactly. 40-50% this generation is great for anyone. Unless you're nintendo, there's not going to be a 67% market share for anyone.
Gapingmarco @ Oct 30th 2008 10:04PM
I think Ps3 sucks and Gears of war kick some ass¡¡
Brucie B @ Oct 30th 2008 3:38PM
My Ps3 Broke!! Wasn't reading any disc...
Ohhh wait, your talking about breaking even....
lol
Kevin PSN: Keviseg15 @ Oct 30th 2008 3:57PM
was not even funny
Christian @ Oct 30th 2008 3:39PM
I think sony will try and make money by making consumers pay fees after their warranties are up. Ps3s are made from cheap parts that break down over time regardless of the optimal conditions its kept in. So enjoy paying that 150 service bill now or in the future...still ps3 ftw
GENTLEMEN @ Oct 30th 2008 3:40PM
Christian is obviously confused. He's thinking of the 360 which will charge for any other failure that isn't a RRoD and believe me there is a LOT of other flaws with 360 hardware.
IronEagleX @ Oct 30th 2008 4:09PM
Like if you tilt the 360 on it's side when a disk is playing it will buzz saw the insides at 7200 RPM? =D
-IeX
Jtenma @ Oct 30th 2008 4:16PM
This is for IEX...
No disrespect man, but I am very curious. Why do you put ur name after every time you type a comment? (your name is already at the top)Is it a habit?
You are not the only one who does this though for sure.
Just wondering.
GENTLEMEN @ Oct 30th 2008 4:37PM
IeX you don't even have to do that. It'll do it on its own just being horizontal though mostly vertically. I Haven't ever seen a console do that before. I 'd like to congratulate Microsoft for making something so faulty.
IronEagleX @ Oct 30th 2008 4:57PM
@ Jtenma
Yes, It's a Habit. I do a lot of forum posting.
-IeX
See, I did it again. I just can't help myself.
ryan @ Oct 30th 2008 5:08PM
No, it'll do it if you tilt it from horizontal to vertical. As long as it's stationary horizontal or vertical it won't scratch the disc. Although MS is addressing this issue (covering it up) this fall with the optional game install, it still should've been fixed like 3 years ago.
B @ Oct 30th 2008 9:10PM
It's a shame something so faulty is crushing Sony's PS3, eh?
There's a ton of Blu ray drive failures with the system, dont pretend that it doesnt have problems
Popfrogs @ Oct 30th 2008 11:28PM
The unofficial guesstimated number of BR drive failures is hovering near 1%. Meanwhile the 360 has 100% failure rate over time. Sooner or later, every single one of them will red ring.
I think I like my PS3 odds a little better.
Ben M. @ Oct 31st 2008 11:06AM
@ ironeagle
i know that ive had to fix so many of my friends 360 discs because their system got knocked over while playing a game. it took me several hours and bottles of water with my scratch doctor. worst time ever
Ott @ Oct 30th 2008 3:41PM
PS3 is constantly growing and with the new games coming out it will go up enough to settle things for months. Sony gets all its money from software so right now is the perfect time.
Steve Childs @ Oct 31st 2008 4:54AM
It depends on the long term view. If Sony has designed the PS3 as a platform for the PS4 & 5 (for example), then yes the PS3 will be a loss leader for a long time, but because of the lower development costs for the PS4, what it looses out now, it will gain on the PS4.
Only Sony know how good or bad they are doing, outside 'experts' cannot possibly have all the information to hand so most of their comments are just hot air emitted solely for the purpose of attracting attention for themselves.
Jerses @ Oct 30th 2008 3:41PM
Only nintendo is making profit this gen. But at least its not the 360 RROD where microsoft and the consumer lose money ( and time). In the ps3 case i think its a win for the consumers.
jarhead906 @ Oct 31st 2008 11:57PM
Actually, the Xbox 360 has been making profit for Microsoft for a little while now.
And yes I agree in this case it's a win for the PS3 adopter.
kentawilson @ Oct 30th 2008 4:02PM
Where did you pull that comment from? Better yet go do some fact checking.
Tez @ Oct 30th 2008 4:05PM
Which comment? The part about the Wii making a profit? It isn't being sold at a loss like the 360 was and the PS3 is.
Actually, Nintendo's never sold a console at a loss. They have always, always made money. Even during the N64-Gamecube years when they were in "last place."
Arnon @ Oct 30th 2008 4:34PM
Did everyone sleep in a rock? There was a big article stating how MS has already turned a profit from their consoles lol.
MakaiOokami @ Oct 30th 2008 6:22PM
Microsoft makes a profit because they overcharge EVERYTHING. HDD drives (finally a price drop comming) proprietary headsets, proprietary memory cards, and a ton of other BS crap that Sony makes universal and for much cheaper.
Microsoft will do nothing BUT get a profit no matter what. That's why they charge you 50 dollars a year to go online and play games yet they still have advertisements on the Blade. They'll spam every penny they can.
Jerses @ Oct 30th 2008 10:04PM
yeah, that article was from some dude at microsoft so they are going to talk big numbers. But did that article includes losts in damaged hardware (RROD)? Because the failure rate (google it) its 30% and thats microsoft numbers!! Im not trying to say that the ps3 is the best at selling but at least its not selling crap hardware that you will have to return twice a year (unless you play like 1 hour per day).
Arnon @ Oct 31st 2008 12:05AM
Jerses do you even know what turn-a-profit means? It means, after all those loses, and manufacturing costs, MS is finally making $$$ off of the 360.
Christian @ Oct 30th 2008 3:43PM
I was actually referring to the YLOD not to mention the other problems that seem to be increasing as sonys stock drops and holiday season nears.
Araskaz @ Oct 30th 2008 3:52PM
You got the YLOD? Damn, if I were you I'd go buy a some lottery tickets... because you need to be 1 out of about 2 million to get it haha.
Just because you got it, doesnt mean it's a problem. YLOD is just telling you that your system failed. Just because RROD takes away half of the 360's population doesnt mean the YLOD does the same for the PS3... lol.
James @ Oct 30th 2008 4:04PM
Dude you're full of prime fanboi crap. You'll get at least a hundred thousand RRoDs before a single YLOD.
Reminds me of a post I read on a gaming forum where some guy complained of getting a YLOD and ranted "That's it! I'm buying a 360!". So funny.
Morisato06 @ Oct 30th 2008 4:58PM
I could have sworn, i read in the manual that the when the light changes to yellow, and red on the ps3, its letting u know how hot the insides are. I easily fixed this buy using an electronic duster (those little compressed air cans with the "straws" at the tip) and it went back to being blue.
Arnon @ Oct 31st 2008 12:09AM
"Dude you're full of prime fanboi crap. You'll get at least a hundred thousand RRoDs before a single YLOD."
Hypocritical much? XD
DelSource @ Nov 1st 2008 2:14PM
WTF?! How is that hypocritical?! It is not a fanboi statement but one based in fact. RRoD's are numbered in their millions; how many genuine YLOD's have resulted in dead PS3's? I've had a YLOD which was cured by ........ allowing the console to cool for an hour (on a very hot day)!
Moron.
blackbeard_ @ Oct 30th 2008 4:01PM
Is it just me or do other people notice that these "analysts" and "industry experts" are usually wrong?
If good games continue to come out and really showcase the PS3's capabilities I think it will do just fine.
Why does one console have to crush the other? There are 16M+ PS3's out there and 21M+ 360's. I think they are both doing pretty damn well.
Sony will make there money back by selling great games. The hardware in these "console wars" is usually just a means to an end. The end being... selling games (and high def BluRay movies).
I think with BluRay the HD winner and a lot of great PS3 games coming out... Sony is just getting started and they need to stick to producing quality software products.
lokar82 @ Oct 30th 2008 3:52PM
I think it's more complicated for Sony than just whether the PS3 will break even or not. Sony is taking bigger losses on the PS3 than they otherwise would since they insisted on putting a Blu-ray player in it to help win the HD format war. So now that they have won the HD format war, if they make more profits on the blu-ray side of their business than they lost by putting blu-rays in PS3 then they still win, even if technically the PS3 doesn't break even.
Araskaz @ Oct 30th 2008 3:54PM
Thats a good thought.
supersickie @ Oct 30th 2008 3:58PM
Exactly right. Sony's move to implement Blu-ray was meant to last way beyond this generation.
SuperGayParade @ Oct 30th 2008 4:07PM
Also look at long-term... PS2 is still making profit. In ten years, PS3 will still be selling and being supported. That's where the profit is. They're just building their base right now.
Hife @ Oct 30th 2008 4:07PM
Well said sir. I won't pretend to understand world economics, but this little study certainly seems narrow and misguided.
James @ Oct 30th 2008 3:57PM
A cheaper, 45nm CELL-manufacturing process "PS3 Lite" will explode in Japan and probably elsewhere too. End of 09? I reckon $299 is the magic figure for the US.
And anyway, MS have turned profit from the 360. Yes I know it is cheaper to manufacture, but once you add up those RRoD and extended warranty costs........
And as someone has pointed out, Sony is making profit on PS3 software.
supersickie @ Oct 30th 2008 4:01PM
Not to mention they really can't cut the cost of that console more than it already is. They may make money on selling accessories, but I'm sure Microsoft would much rather keep the prices higher. No can do when you're competing with quality.
Arnon @ Oct 30th 2008 4:36PM
Wrong.. MS is still developing the 65nm CPU/GPU superchip. I expect the 360 to be about $199 for the pro by the end of '09 honestly.. which is when they expect the Valhalla Motherboard.
Popfrogs @ Oct 31st 2008 1:52PM
@Arnon: I'm still wondering why you post here. Aren't you and Ryan late to a Master Chief dress up party?
Ulrich @ Oct 30th 2008 4:00PM
it's based on economics... right now the yen and dollar are doing poor... look at the sales for the first two quarters... sony games posted a profit in quarter one.... but sold 100 million more PS2's and 100 million more PS3's in the second quarter and posted a loss... if/when the economy bounces back and the dollar and yen start to gain in value the games division will be just fine... it's not like they aren't selling product... it's just that product isn't selling for as much as it did.
Odan @ Oct 30th 2008 4:15PM
Considering i believe in the next or 2nd gen console(s), there will really be one console with all the companies making games.
But this reads very strangely.
PS3 is going to not make profit at 50% of the market share? True its down 17% , but really , having half the market playing your console is an amazing feat , nothing to sheer at.
So i doubt they will lose money IF thats the case.
I think Microsoft and Sony are bound to be losing something this current console as too many problems have happened , and nintendo is one of the biggest.
Nintendo is also going to be the reason why i believe the next E.T is about to happen to the game industry. This time i can picture it as a big black mushroom
naxe @ Oct 30th 2008 4:39PM
I don't get it ....... Sony has the ps2-psp.2000....psp.3000-Ps3...and Blu ray they should be "printing moniez too" like nintendo. and yet thier drowning.
I do not believe that the ps3 will break even..
With massive mis-steps at launch and countless delays that put a damper on the hype.
Also it dont help that microsoft's throwing bags of money around to make former exclusives jump ship. Their is no reason left for the Average consumer to say .......... I THINK ILL BUY A PS3.
*all the games are on the now cheaper 360
*blu ray players are now alot cheaper.
*you cant play your old library of awsome ps games w/ the new 80gb model.
It seem'd like they were beta testing the ps3. i dont ever remember so many updates adding new features on any other product.
and after its all said and done the playstation 3 will come very close to breaking even. very very close but it wont break the line.
Also off topic..... the psp is in the same boat. It is selling well yea but their are no good games.... NONE. i have God of war. its cool but very short.
Games sell systems.... good games. the ps2 had one of the biggest libraries of all time that is why it sold so well. thats why it was on top for so long.
James @ Oct 30th 2008 4:23PM
In the gaming context (i.e. for the many people who buy a PS3 for gaming and HD movies, like me), cheaper Blu-ray players will only have a big effect on the PS3 when a 360 AND a Blu-ray player together cost less than a PS3. Probably never.
James @ Oct 30th 2008 4:39PM
PS I've just re-read your post.....
"Their is no reason left for the Average consumer to say .......... I THINK ILL BUY A PS3."
"all the games are on the now cheaper 360"
"It seem'd like they were beta testing the ps3"
"the psp is in the same boat. It is selling well yea but their are no good games.... NONE"
Yep. You are talking out of your ass. All the (PS3) games are on the 360. LOL.
drewwsny @ Oct 31st 2008 11:50AM
i think some of you fanboys are pretty funny. First, microsoft makes its money by software and i think anyone can agree that they are leading at that aspect. Second, i have had 2 ps3's break from the YLOD so do not say that it is a 1 in 100,000 chance that it will have the problem.
colc1705 @ Oct 31st 2008 3:17PM
you really need to dust more often!
Patrick @ Oct 30th 2008 4:27PM
@naxe
Can you sound anymore negative. It's not as serious as you make it out to be, relax.
Stoo @ Oct 30th 2008 4:39PM
Well if fabricating the Cell processor using a smaller and cheaper process goes to plan then they have a cheap scaleable platform for the next PlayStation.
Multiple Cell Processors coupled with a new GPU would work for a future PlayStation platform. The R&D on the cell would be non-existant and would have been absorbed by the PS3, it would be a platform that developers would be used to and Sony would have tools that have been refined as well.
Given the massive R&D that went into the Cell this was always going to be a difficult period to profit from for the PlayStation. But the Cell and variants of it are going to find markets elsewhere.