Sony to lose billion on Playstation 3 |
Source: PS3focus
According to a report from Merrill Lynch, published in Japanese magazine Toyo Keizai, Sony is set to lose over US billion on the Playstation 3 in the year following its launch.
The report indicates that Sony may be willing to sell the console at less than the production cost - said to be around 54,000 yen (almost US 0) - in an effort to gain a significant share of the market.
Merrill Lynch predicts that Sony will launch the PS3 with a US 9 price tag - around US 0 less than it costs to manufacture.
The expected move by Sony is similar to the plan they implemented with the Playstation 2, which initially sold at a loss before making up its profits with the sale of software in following years.
Microsoft’s next-generation console, the Xbox 360, was also reported to have been released at a loss, rumoured to be at least US 6 per console.
Sony Computer Entertainment president, Ken Kutaragi, told Toyo Keizai that he believes price will not be such a big issue because people will want the PS3 no matter what the cost.
“Whether consumers think a product is expensive or cheap all depends on the balance between its appeal and price. Our ideal [for the PS3] is for consumers to think to themselves, ‘OK, I’ll work more hours and buy it.’ We want people to feel that they want it, no matter what…
I’m confident that the PS3 is a product that people will definitely want,”
he said.
The expensive production cost of the Playstation 3 is mainly due to the advanced equipment of the machine, with the three main components - its Cell chip, RSX, and BD-ROM drive - totalling to the value of around 11,000 yen (approx. US 0).
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Comments
Microsoft lost $4 billion with Xbox and never got a profit from hardware sales. Sony will get profit from PS3 hardware sales, so no worries for Sony. Anyway, Merril Lynch do not have real cost figures, so they're just guessing the worst case scenario, which is not going to happen.
There's no reason Sony should be worried about. X360 is a flop in Japan already, selling three times less than the original Xbox when launched in Japan three years ago. X360 isn't even nearly living up to its predecessor's sales in other territories, so...
Why are all the people working for Sony such ****ers, they are all so full of themselves. Such ****y son's of Japanese *****es. I hate them so much... Pain in the ass I'm going to get a PS3 myself. How the **** do kids like us who are under the working age supposed to afford that expenisve machine? I highly doubt that my parents are going to be willing to buy me one.
Thats the kinda thing that make casual gamers not want to get it when it comes out, Price. Most of my friends are going to get it, but not at launch, too damn expensive they say.
I'd like to get my PS3 at launch but I highly doubt I'll have enough money.
To the guy above me, no matter what you think, from a Macroeconomics point of view, price is not an issue when the machine is worldwide anticipated. If sony would have charged us 1,000-2,000 for it, we still woulda bought it and it would been sold out. Just like computers, everyone got one, why not get a PS3. As for your case, too bad, you suck you cannt afford it, but your still gona come up w/ a way to get it so dont be *****in at SONY.
Dont even talk about being under working age and not being able to afford 400 bucks.
When i was 11 and the N64 came out how do you think i got it? I worked doing yard work around my neighborhood and all sorts of stuff to come up with the money. Surprisingly it only took me a couple weeks of working just about every day.
So dont tell me just because your under the working age you cant afford it. Any kid can go around and do small jobs here and there.
I agree, they could make the PS3 cost $1000 and it would still sell out everywhere. They wont do that because at that price people will buy the xbox360 with games and accessories for less.
Aiming at 400 dollars is the good spot. Imagine how much the ps3 will ebay for once its out. Definitly one of those must get electronics.
Sony a bunch of ****ers? if they charge 400 bucks doesnt that make Microsoft a bunch of ****ers as well. Well i guess microsoft already is but besides the point.
High end electronics are always gonna cost a premium. The xbox has nothing next-gen in my opinion. Graphics are sub PC-standard even though it has a video card that rivals PC video cards. Not to mention it has more processing power. Even with all this Call of Duty 2 looks like crap compared to a PC.
Sony admits they want people to work for the PS3, its a driving motive for peolple. If they throw out a cost figure, people will save up for it. Thats the way it works.
Microsoft did the same thing they just didnt out and admit they want people to pay more. At least Sony was open and honest about making people pay more for it.
actually, current economic thinking states quite clearly that the higher the price, the less people who will buy it - whether it be a 25 cent phone call or a $50,000 dollar car.
And what he says about casual gamers is right on. If a casual gamer who doesn't really care about microsoft or sony and just wants to play tetris sees one machine that can do it for $400 and another that can do it for $200.. guess which one he's going to buy? Not everyone got a computer until they dropped significantly in price.
Sony's hole-in-one is really the blu-ray drive. People will be able to justify it to themselves (and their parents) the same way they did with the PS2. "Look ma, it can play HD movies too," Where the 360 only plays DVDs, which most people have long ago gotten devices for.
I think you're confusing casual gamers with kids.
There is also the notion of price inelastic goods.
360 will f**k itself if it launches with HD movie addon version
$100 for all three key components or for each?
$400? I keep thinking Sony will launch it at $500-600, is that price tag official? it sounds quite cheap considering the technology their using.
SONY is a shady company no matter if you like the ps3 or not, they really like talking trash about any competitor like Ds a 360.
Sony executives, like Nintendo's, have always been much more classy and clever than any Microsoft executives, even to the point they praise their rivals' products when they do things right. On the other hand, MS execs usually talk **** about Sony, saying how nervous and scared they must be and spreading FUD, while we all know who are the most successful in this industry and who are really afraid of who.
For those who think PS3 will cost $500: There's no way PS3 will be more expensive than $400 at launch. Those estimated costs are suppositions since real costs haven't been revealed at all yet, to nobody. I wouldn't be surprised if PS3 ended up being sold at the same price PS1 and PS2 did at launch, which was $300 even though everybody thought they would be much more expensive (PS2 specially, since it was introducing DVD video playback)
Anyway, it is most likely Sony is going to have massive success once again. PS1 sold 100+ million units, PS2 has already sold 100 million units and is the healthiest console today in terms of sales, and PSP has sold nearly 10 million by now. Playstation = success & profit. They could afford to lose $150 or $200 per unit at launch. They would get a profit sooner than anyone else, it has happened several times already and things look better than ever before. Also, PS3 will be much more than the most powerful console for the next years, it will also be a true HD video player thanks to Blu-ray, which makes it a one-of-a-kind console with lots of potential and surprises coming. Way to go, Sony!
Ya microsoft CEO's and "Boss's" Have been featured in many articales in just the last week, Talking about how the Xbox360 is more powerfull than the PS3
Which sounds like a blatant lie coming from them, Especially with the MGS4 vid and all that out now..
But Lie or not, theres nothing anyone can do about it, Its not like they will get sued for false promises
both companies love to exagarate about their console.
Few believe them.(fanboys for sony or microsoft)
Few don't(Sony or microsoft fanboys who call them lies, while others don't)
The sad thing about both...is there is no proof to prove or disprove the lies.
CES is where it's gonna be at my man...CES.
Personally if I was Sony I'd take a cue from Nintendo and sell the console at a price point that minimizes the loss per console.
Look, if Sony plans to release worldwide at the same time they're bound to have massive hardware shortages. There's going to be excessive demand as a result, so why not release it at a price that will erase all introductory costs. Then come winter holidays of 2006, advertise the PS3's price drop and bang! you have a huge rush of consumers coming in to buy the console.
Then again, Sony probably doesn't want people to buy a 360 because they think the PS3's $500 price point is permanent, so it might help them in the long run to release at $400 after all.
thats why i can't wait to see what they show at CES.
I know i may be an ****** to alot here against the ps3
But deep inside..i want one too
and CES is where it'll make me really wanna get one.
One vecha is annoying enough. Do we really need this doppleganger. Seriously, twice the vecha's = twice the annoyance.
Ok im a gammer all the way and i like Sony and Microsoft im 14 and i think that $400 bucks is a good idea the PS3 is highly more Computer intelligent than the 360 One BIG THING IS the power cord for the old xbox was catching on fire now xbox 360 the power source inside is exploding it KILLED A CANADIAN He turned it on and BOOM I doubt PS3 Will explode!!!!!!!!!!!!
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