Sony Expects Huge Losses on PS3 Launch |
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Since the Blu-ray drive and Cell processor from Sony are so expensive to manufacture, there's no other way for them to have a huge loss on every PlayStation 3 console sold. We all know that they make money off of the games these days, though. Today Sony announced details from its fourth quarter and full-year fiscal results. For the quarter ended March 31, 2006 the company lost 66.53 billion yen (about $569 million) on 1.85 trillion yen in total revenue. Last year, during the same months, Sony lost 56.5 billion yen on total revenue of 1.7 trillion yen. But the reason for that was because there was a difference in taxes in the US, compared to the year before that (2004).
In November, when the PlayStation 3 is set to launch, Sony expects the segment to fall down by a staggering 100 billion yen ($871.6 million) in operating losses during the business year as it prepares for launch.
"We believe that we can lower costs dramatically [on the PS3] through chip shrinkage and by cutting the number of parts but there is no way to avoid high costs in the first year," Sony Senior Vice President Takao Yuhara told a Tokyo news conference.
Obviously there's no way to avoid launch shortages, but Sony will do anything to do it better than the Xbox 360 launch, which didn't go as smoothly as Microsoft wanted. But seeing that Sony is making a big loss on the production, it looks like they really want everyone to enjoy their systems as much as possible during the holiday season.
This could mean that the games are going to be a bit more expensive than we're used to, but I'm just being skeptic here. What do you think? Will this affect the price and quality of the games?
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Comments
but i'm happy, as that 900dollar ps3 price is looking less and less likely! yeah, expensive games, higher development costs... this all points to smaller developers, who might be inclined to make more marginal games, go under. oh well, it's the general trend of the videogame industry anyway. and maybe the smaller devs will make games for 'wii' instead? that wouldn't be such a bad thing. i don't mind 60 dollar for a final fantasy, but 60 dollar for another bust a move would try my patience.
You're right. This could also mean that some smallers developers go developer for Wii, which could lead to some interesting games.
Sony has some deep pockets, so I would probably think the PS3 will be qutie expensive when it comes out.
Last year people at SCE told that it was going to be hell expensive, to make people want to work more hours in able to get the money for it. Sincerely I think, for the reports I read (killzone and motorstorm being about 50% in graphic quality of what was shown last year) that they overpromissed about the ps3. Of course, I must see it for myself, but I think we are going to see nice first gen games (probably almost as good as X360 second gen ones), but no astonishing ones.So people would buy ps3 anyway - blueray player - but would be somewhat disapointed and tell others, and there is nothing worse than bad publicity. As for games... maybe 70, 75 euro price. The high dev costs make developers not being able to take chances.That's why there is ps2 and nintendo wii. Ps2 for mainstream games, nintendo for the revolution in gaming control and immersion.
doesnt mean you have to point it out, acting like a damn kid. ps: that means am going to wait for a year for the price to go down since they said that the cost will be lowered drastically, i guess smaller processor.
nocomment
Lower production cost equals more profit for Sony. Your a clown if you think that just because they cost less to make that they will lower the price. They will still be losing money on the console and this will translate to them losing less money per console. ps: DNE=Does not equal
Huh? Everyone loses money when launching a new product especially something of the PS3's magnitude. One thing to remember is that Sony stand's to make an amazing amount of money if the PS3 is successful (very few people think it wont be). For every BlueRay disc (movie, game, anything) sold they'll get a piece of it. Its all about ROI ( Return on investment). They're putting in a huge investment and taking a lot of risk because the rewards will be phenomenal. Blue Ray is already wining the war outside of gaming I can only imagine PS3 will completely destroy HD-DVD chances. The PS3 will be expensive but only when compared to previous consoles. If the rumors of a $399 ps3 is true then we can all rest of assure Sony will have tons of Cash to expense when ps4 comes around. However it might cause a feeding frenzy (even from non gamers, who wouldn't want a BD player for $400). For people fearing small developers would not get a chance to develop for true next generation consoles, you are quite wrong. These are the reasons. * Development tools (SDKs as well) are getting cheaper and cheaper as they become commodities. * Better development tools are making it easier, cheaper and faster to build quality games. * Small developers are getting more and more funding from 1st party companies when they come up with great ideas (loco roco, parapa the rapper for example). * And the key to keeping small developers in the industry is online distribution. Online Distribution of games will revolutionize this industry. Small devs can now distribute at relatively 0 cost. Nintendo, unfortunately, hasn't yet seen the advantages of the network. Also, small devs will actually be turned off by the lack of tool support (lack means more expensive) and that fact that they must find publishers to flip the bill for manufacturing and marketing. Wii might not be the way to go. XBOX360, PS3 have a great advantage on all of these points. I really don't see how you can say Wii is the way to go for small devs. BTW, I am a middleware software developer for graphic engines so I know a thing or about the game development industry.
It doesnt really tell us anything new. i didnt know about how much money they are going to lose but i cant remember figures like that after a couple of minutes or so. But it is kinda obvious that if we get better games(better graphics, bigger, longer games, etc) and a new storage type then it will cost more, to start off with. just for a few years until the price of production comes down and it becomes like what a cd is known as now. the norm. i dont expect a 400 dollar lauch price, that just seems too low to be true. i would love it to be that price but im guessing it will be 500 dollars. That seems the safest bet.
i forgot to say, great post #10, thats how posts should be like, people with with facts from there own experiences not made up
This articles might give you guys a better idea of where the industry is heading. Is from the developer's point of view. It pretty much matches up with what Poster 10 had to say. http://www.next-gen.biz/index.php?option=com_content&task=view&id=2864&Itemid=2&limit=1&limitstart=0
I know the Bluray players are expensive to make, but it is the same for Blu-ray drives? I was told that DVD players are much more expensive to make, but DVD drives for PC's are about 50% much cheaper to make. Isn't it the same with Blu-Ray Drives?
Well, this can play out in alot of ways. Sony took alot of risk with this system & they have set some very high expectations out of the whole gaming community in general. I think you can "kind" feel that happening already seeing that quite a few developers have ALOT of projects for the Xbox 360. Alot of Japenese developers as well. Some feel that this is happening because of how developer friendly & cost effecient the Xbox 360 is. A powerful system, using a well known Media Format DVD 9's. So when E3 roles around, Sony pretty much has to prove that the differience in there Media Format & there Cell processor is beneficial enough to keep its stronghold of developers in tact. If the PS3 comes out & shows even with its advantages that it is indeed not that much better than the Xbox 360, then some developer eyebrows will definitly be raised. Sony will obviously still have the larger camp of exclusive developers & titles. Alot that are from Japan. However, some may start to become multiplatform developers if the PS3 doesn't turn out as good as what has been claimed of it. Also since alot of developers are looking for more $$$ these days.
if you only get a few good games for the ps3 that are 60bucks...and a system that is 500 bucks... i hope not just a few "steller" games get put on the ps3...
First let me clear some things out #15 Having a "known Media" makes no difference. From a developer's perspective they are essentially the same well except for different loading times but this is true for all media and it depends more on hardware. It's like moving from a 8 gig hard drive to a 50 gig hard drive. Developers will only benefit from it. They don’t even need to know where the data goes to be honest. It can be floppies for all they care. Publishers like any company want to make money (yes even Nintendo is out just to make money, dont lie to yourselves fanboys). They will develop games for the 360 and PS3 and revolution and will probably port to all three. The cost of porting is so much cheaper than developing from scratch that for some of these companies (EA, Eidos) it will be crazy not to do so. This is why XBOX is getting so many titles because is the only player in town alongside the PS2 (which outsells it in japan =) ). Revolution ports however might not be as common since a lot of new technologies (physics, animation) require much more horse power than what’s available there. The PS3 will have plenty of stellar games, and that won’t be a problem. Actually, Sony isn’t worried about the XBox or Wii. They will make a bundle regardless. What they are worried about and are banking on is timing for HD. If the PS3 is successful and blue ray disc become the standard and people are almost force to buy new HD tvs to enjoy their machines to the fullest, you can bet that Sony will regain it's dominance in electronic products and probably will become the biggest most profitable company of them all. Sony is not just banking on the PS3, it has blue ray and HDTVs. These three together will bring the Giant as close to world domination as ever imaginable. Perhaps Sony’s biggest most profitable move.
Trust me, the move from DVD 9 to BD has been a big deal to some developers so far. You did not forgot that Sony (With its Current Specs) expect these developers to use there media on a system whose Drive is slower in both Drive Speed & Transfer Rate than current DVD Drives. It is also slower in both areas than the Xbox 360 drive which uses a 12x drive. The speed also effects the first set of games that surly will be using the DVD 9 Media to cut down production cost. So, this just puts more work on the Developers to use the HD's ability to make up for the slack. The Cell is also no walk in the park as it has been said by a few developers up to this point. Even with all the probs, developers will stand behind Sony. There the big money maker out of the 3 with better sucess in the console market. Even with that however, From the PS1, to the PS2, & to the PSP, there control of the market share took a pretty nice fall. Alot of there numbers do favor the Japan Market, as alot of people tend to throw that out there in Sonys Defense. Even with that said, there margian isn't nearly as impressive as it once was. As Microsoft has been slowly creeping up on them & Nintendo is just whipping the floor with em in the Handheld department. Will the PS3 help them gain the margian the once had over the competion, um, no? It will keep them on top of course, but this gen will most likly be alot closer. Especially compare to there last 2 consoles. Seeing how you have MS has gained ALOT of developer support this time around, alot of Developers are going Multi Platform., & Nintendos approach of a cheaper alternative system with alot of innovation, things are definitly looking like there gonna do a complete 180. Im still going to get a PS3 regardless as I am a casual gamer, but I simply just know the dominace Sony once had with there earlier consoles has faded. The playing field will probally be just as equal as it was back in the 16 bit era.
#17 hit the nail on the head. game companies always lose money on their console. the way they get you is buy selling games and accesories. especially nintendo and their gameboy stuff. *puts on fan boy flame resistant coat* i love gamebooy as much a the next person but there have been 3 versions of the advanced and an uncountable number of accesories like a worm light. at the same time the game gear had a backlit screen years ago.
ok stupid question but i heard blu-ray is going to be a little slow. does that me dvd slow because im fine with that. but since there is more capacity, wouldnt that be better for content. and does this mean better games for both consoles since most will be cross platform. when i get my ps3, i dont want my pocket going empty for the same thing i can get on 360. like BIA:HH. its going to be cross platform. and both consoles can handle it fine. so whats the fuss? im confused.
no body knows if its going to be a 2x or a 4x blu-ray drive, all that is going to be revealed at e3 also if sony is going all out and thinking about the future then i dont see any reason why they shouldnt add the 4x drive in the ps3 ps: love playing mario kart 64 on my psp 2.6!! :)
As for the Drive, Yeah, there 2x Model is slower than current 12x & 16x DVD Drives. They can easily fix this problem by slapping in a 4x Model, but in turn, will rise the price of the system overall. Something I feel is worth the risk with having a faster & better drive. The PS3 defitnly has more power under the hood. I think the real factor is how truly capable is the Cell Processor. The RSX GPU is faster than the ATI GPU found in the Xbox 360, but it also has less features. It's damn strong & faster in every way the ATI GPU however so the advantage in power SHOULD favor it. The games will look better on the PS3 surly. That is still not the deciing points for sales. The games have to be good as well.
I love the way people post things without any proof. First of all #18 DarkLegacy, is less about the processor then it is about the layers on top of the processor. Sony is using many open standards like OpenGL this time around which have been used by the development community for quite a while. I have personally have worked with OpenGL. Please see wikipedia for more details: http://en.wikipedia.org/wiki/Ps3#Software_development Layers allow developers to use the power of the processor without having to learn it in detail. Also for BR dics please see the FAQ because obviously you know very little about Blu-Ray: http://www.blu-ray.com/faq/ Here's a quote from the site: According to the Blu-ray Disc specification, 1x speed is defined as 36Mbps. However, as BD-ROM movies will require a 54Mbps data transfer rate the minimum speed we're expecting to see is 2x (72Mbps). BTW they require high speeds because they are feeding data much faster to your HDTVs, this is why HDMI ports are so crucial to the next gen's movie players for them to support true HDTV (360 doesnt support HDMI). Also Sony have not announce the drive's speed which will also support DVD. PS3 is a superset of the 360. DVD read Transfer Rate: 12x roughly = Max 15.85MB/s If you search around you will see that 12x DVD drives read at an average of 8x which is = 10.57MB BD read Transfer Rate: 2x roughly = 9MB/s 4x roughly = 18MB/s Blu-ray also has the potential for much higher speeds then DVD, as a result of the larger numerical aperture (NA) adopted by Blu-ray Disc. Trust me even with a 2x drive it will be more than enough. Developers won't notice the difference, plus if the PS3 does come with a hard drive then you can just forget about load times as most developers will just transfer data to the drive before they read it into memory. With the 360 you cant because hard drive is an extra which means for developers they can't assume is there. BTW, I'm not a Sony/Nintendo/MS fan just like people to see the real facts and not be persuaded by blinded fans. However, I do see the PS3 dominating this race if they can keep the prices down without cutting too much from the promises. Also please note that the PSP is doing incredibly well, the DS is doing better but it seems like they target seperate markets as they dont seem to affect each other's tremendous growth.
Yeah, thats what they "claim". Being a tech as long as I have, I know better than to believe what I see on a piece of paper. Let them stick with a 2x drive & you'll see how often that system will enjoy bottlenecking =). Just wait n see kids =). Same thing was said about the Jump to DVD from CD & look how that turned out at first. Im still getting the PS3 regardless, but I don't have the sucker written on my head anymore when it comes to anything Sony says =).
lol hahahahaha PS3
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