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Sony still losing money on PS3 Slim

Posted Aug 25, 2009 at 3:20AM EST by Karl B.

Listed in: PS3 Tags: Amazon, Kazuo Hirai, playstation 3 updates, PlayStation Network, Sony

PS3 Slim - Image 1

They've managed to cut manufacturing costs down by 70 percent. They've released a slimmed-down hardware iteration at a lower price point. So, is Sony finally making money on the PS3 Slim after bleeding money when the console first launched? The short answer is... No.

Sony honcho Kazuo Hirai said as much in an interview with Times Online. As for the long answer, Hirai said that while they're not making any money on hardware alone, if you consider everything from hardware and peripherals to software, well then yes indeed, they've been profitable since the last fiscal year.

Here's Hirai's answer when asked if Sony is still losing money on the Slim:

If you're just talking about the hardware alone, the quick answer is yes. That makes good headlines, but I don't actually know that that's the true nature of the business that we're all in, whether it's PlayStation, Xbox or the Wii. I think the better indicator is to look at the business as a whole platform, to ask: are you profitable in terms of the hardware, software and peripherals. And the answer t o that question is yes on a gross profit level since the last fiscal year.

Via Times Online

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The only way Sony is going to make money is by charging users with membership fees like Mircosoft. Thats the only reason why mircosofts consoles are so cheap, is because they later get their money back plus more from there membership fees.

In short: Sony is going to have to start charging online fees on there next console (PS4)

# Why do you really care? — squeeky_clean 2009-08-25 10:46

Why is this topic of such great importance? Buy your console, play your games and let the companies worry about the money they make. This topic is basically troll bait.

# ... — Silver-Tiger 2009-08-25 10:48

If Sony offers a Service that is equal or even better to XBL, XBL users aren't willing to pay anymore. Monthly fees are not necessary, if the DLC, PSN games and the disc-based games sell well. Sadly, this is where the problems are. The software just isn't selling so good.

# Sony's doin it wrong — ChevyJackson 2009-08-25 11:18

I think that Sony has the right idea in assuming that even though they are losing money on each console they sell, they'll still make a profit from selling things that go with the console. I mean, one console costs what, $300-400? But how many games will they sell for each console? The price begins to stack up very quickly, and Sony starts making money again.

But the biggest problem with this way of thinking is the way that Sony is approaching the situation. When the PS3 was first launched, Sony tried to convince their target audience that it wasn't a gaming console, it was a all-in-one media device, and after that it was a home computer. Now, with their current advertising and the release of the PS3 Slim, they're once again trying to glorify how much the console can do without paying enough attention to the games.

In short, some people might buy a PS3 simply because it's an incredible piece of technology at a decent price, but the biggest majority of the market is going to buy it for the games, and THAT is what Sony needs to focus on the most.

# We care because... — ShinseiTom 2009-08-25 11:23

It can affect decisions said company makes down the line. And those decisions can have major implications for us as consumers of products from said company.

That said, pretty much everybody loves taunting others over perceived faults and problems. It's kinda like tabloids, only with more truth (I would hope.)

# i agree, but.. — truk 2009-08-25 12:01

you cant sell games if you haven't already sold the system. the #1 reason why people did not buy a ps3 was because it was too expensive. sony has dealt with that by reducing manufacturing costs. so when more people start buying a ps3, that will give game dev more incentive to want create games for the ps3.

# ~~ — ~~ 2009-08-25 12:09

Did you even read the article ?

"to ask: are you profitable in terms of the hardware, software and peripherals. And the answer t o that question is yes on a gross profit level since the last fiscal year."

So they do NOT need fees in order to make money, apparently.

# I they continue — shanedp 2009-08-25 14:44

to lose money on every new console (i.e. PS4, PS5, ect.) Sony will most likely go the way of Sega..I'd hate to see that happen, but untill ignorant people that want expensive crap learn that you have to actually pay for what you want, Sony will continue to lose money. The PSP kids have completely raped Sony. The PSP is awsome, but they don't sell they amount of software that they need to because of people like Dark Dipstick making custom firmware and enabling people to play downloaded CSOs of commercial games...I say Damn all you pirates. Damn you all to hell. It will be piracy and idiots that will be the downfall of the gaming industry.

# Fees.... — Shatterdome 2009-08-25 15:54

The charge for XBL definitely helps. Think about it, if someone has been paying for XBL since launch, they have basically bought another 360 pro.

Also charging for batteries and battery chargers (I had a 360 for 3 years, had to buy 4 batteries because they either stop working or lose their charge way too quickly), overpriced cheapo headsets, etc....

Who knows, maybe the built in battery will die in a year in my PS3 controller and i'll have to buy a new one...but I doubt it, considering my PSP's battery, which is 4 years old, still holds a charge very well...probably only lost an hour of playtime since it was brand new.

It's all about people buying a console, sony losing money there, but making up for it with PSN titles and games....and they REALLY hope people will go buy furniture, clothes etc on PS Home....

# ... — Shatterdome 2009-08-25 15:59

The whole losing money on hardware and making up for it in software is a strategy game companies have always used.

No system ever has released with the hardware making a profit for the company....they always take a loss on the hardware and hope to make it up with software.

The reason Sony wants you to think of it as a media device is that not only do they make money off Games, but they also make money off of Blu-Ray movies. Also they want people to start downloading more movies/TV Shows off PSN...which makes them more money.

I think they are doing the right thing.....whether you buy it for games, or media....they make money.

# Sad but true — Jmak01 2009-08-26 06:01

I loved Sega, they were brilliant, but too much money went down the pan in failed hardware, when they could have easily kept making MegaDrive games for a while. Back to Sony though, they are huge and unlike Sega, have other markets (TV sets, Movies, PCs, Walkman etc) to support them, and so they are trying to bring those elements to their console (touting as a media centre). Trouble is, they haven't fully realised this potential yet - they should have a music and movie download service fully working already, and incorporate walkman and sony ericsson phones into it somehow... I think that's where they're going but it's moving slowly.

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