PS3 could cost Sony $1 billion...

[Neal_C]

According to analysts, the PS3 could cost Sony $1.18 billion in its first year on the market as they will lose almost $100 per console...and thats if they sell it at $399...



PS3

[Shane Martin]

In other words, don't buy Stock in Sony

[JetFlyGuy]

What are the projected revenues for game licensing for that time period? I am sure that ratio of game sales to console sales is quite high.

[Mark1Ace1]

I think Sony is banking on the software to bankroll the PS3, hence they are not too worried about the loss from the hardware itself....Well that is according to those in the know...

Mark

[Dean McManis]

Yeah, like so many electronic games. The profits are not made from the hardware, but from the software/licensing. 8)

McDonalds makes almost no profit on their burgers, but rakes in HUGE profits on the sales of soda and fries. :T

[audioqueso]

In other words, don't buy Stock in Sony

On the contrarary, that is when you should buy stock in Sony. It's great that you mention that cause I have over-looked it. If in fact Sony is going to lose money over the cost of the PS3, do you think this will take down Sony, the company? Impossible. They're too gigantic to take down buy that much money. Will their stock go down? It might, but if it does then you really SHOULD buy because is there any doubt in your mind that Sony's stock will not go up back and surpass their current value. You know the PS3 is going to sell cause Sony's marketing is tremenous. Sony is going to continue to sell and go up because of it's great marketing. So should we buy stocks in Sony right now? No. But you should soon cause they'll go down some because of their financial lost and shoot right back up.

[Chris D]

I don't know... waiting a year to release the PS3 after the XBox 360 comes out. Of course, if it offers a huge improvement over the X360, including a high-def disc drive, this could be worthwhile.

[Trevor Schell]

Sometimes you have to loose a bit in order to gain a lot.
Over the next 3 years after release, the profits will be higher than one can imagine.
As mentioned, it's the software that is going to earn the profits.

Reality is, from experience is that most consumers would likely
spend or invest 10% into the platform and the other 90% into the games
over the lifespan of the unit..The 90% would continue to increase over the years
if you keep the machine active.
Meaning, the Video Game machine is the cheaper part of the investment.
It's the games that add up to thousands of dollars over the years, especially if you
have to have the new releases when they come out.

[Dean McManis]

Yep, short-term loss, long term gain.
It's called the Gillette principal.
King Gillette said "Give them the razor, and sell them the blades".
Sony might take a hit up front on the hardware, but will no doubt rake in the cash from the software sales.
If I can get my favorite Columbia/Tristar movies in Blu-Ray HD format and buy a Playstation (HD game/movie player) for a reasonable price, I'll get two fun home theater toys in one.

[setite]

From what I have read microsoft will be pulling 20$ profit a game on the 360 and rumour is they lose 75$ per console. That is a lot less than what they lost on the first xbox which I hear numbers from 100-175 per console. The xbox banked on game sales, and possibly peripherals, to gain a profit but things like gamestops new trade-in system and the upstarts of online game rental services like GameFly in the US and Gplay in the uk are what seriously hurt the xbox. I personally traded in nearly all my games when I wanted something new, im also very picky and only had two xbox games, counterstrike and star wars battlefront, that I kept. Then I eventually opened an account with gamefly. I plan to keep my account but I also feel that the 360 will be MS's saving grace. They are determined to win and this shows by a strong set of launch titles such as the much anticipated The Elder Scrolls IV : Oblivion, Project Gotham Racing 3 which are both new installments in games that were xbox best sellers. Also I have read reports that the famous, sony franchise, Final Fantasy will see the a release on the xbox 360. This alone shows the determination of MS to prove themselves and to squash sony as they are specifically going after a solid winner with FF and are going to narrow the gaps between an xboxer and playstationer because until now, the systems selection was very different. But dont worry nintendo, no kids games will grace these systems . I already have preordered 3 xbox360 games as well as teh 360, of course, and am thinking of preordered a 4th, which, without peripherals will put ms at 5$ profit on me immediately :P.

I think, hope, that profits will soar for microsoft with the 360. I also plan to get a ps3, not because i like it.. but because it will be a decent console/blu ray player. I am also a strong supporter of nvidia, which btw bothered me about MS's switch to ATi. Also if i'm not mistaken, isn't playstation gonna hit in the spring? I read an article recently about the announcement of an earlier release, I'm sure, because they realize that MS's jumpstart may be one of the first successful ones in gaming history. ::sheds a tear for SEGA::

EDIT: Here is the article.

Ok so the US wont see the release for another year still so my point is void. But what do you guys think about MS attempting a simultaneous global release? They are kicking themselves for it now, but I admire them. It's the thought that counts, and it's also why I hate sony. I hate being second or third to get it!

[Hdale85]

well i think most are saying the ps3 wont be released till like 3rd or 4th quarter this year now it was supposed to be released in june but sony is still backing up the june release but everyones saying they arent ready

[Chris D]

Really... wow. The last I had heard, it was May 15th. With the grumblings I'm hearing about variations with Blu-Ray and HD sound formats, it wouldn't surprise me if the release is delayed.

In the discussion of PS3 vs. X360, I don't know that that's really a bad thing, though. Given that there are STILL no X360's available, the problems, etgc, I'm getting the impression that interest in the 360 has taken a huge downturn. If the PS3 does have enough of a gap in time after the Xbox that it has a quantum jump in performance and features, the PS3 could be a clear winner.

[Lex]

They will delay for a Christmas introduction likely, you know hit the shelves around Thanksgiving. It's marketing prowess.

Doug

[JonMarsh]

Prowess? I wonder. If they hit the shelves in late November, then like the XBox 360 launch, they'll have little product to sell for the holiday, unless they have a HUGE production ramp up- say, square wave? In the real world it doesn't happen that way.

What I'm reading in the industry press is that there are actually several platforms (models), and BOM's have NOT been finalized yet, and are not expected to be frozen for 60 days or more. This is coming from key suppliers.

There are alternative cost analysis also, such as from Merril Lynch, which indicate the BOM cost in the first year may be as high as $600-700. (actaully, they're quoting as high as $800, but I'm taking from the low end of their range just to not be alarmist).

The biggest problem is that Sony's assumptions were all based around having 65 nm silicon being a standard production process by the launch, and that's not the case at all, which drives the semiconductor price up greatly. Then too, component costs for the BluRay drive are much higher than expected- some putting the OEM costs of the first drives as high as $300. This in part accounts for the prognostications that the first Bluy-Ray players STB will be in the $1300 to $1800 range. The OPU for BD is quite a bit more expensive than for DVD or HD-DVD, due to the difference in focusing requirements and servo response.

~Jon

[Chris D]

Yikes...

[Trevor Schell]

One of the problems with the XboX 360 not being available was
due to the short supply of memory chips from their supplier.

From the info I had been given, the PS3 would be available in the 4rth Quarter
of 2006.

[Dean McManis]

That makes sense for a Christmas launch.

[P-Dub]

Sounds like it. Sony announced today that PS3 will be pushed back to a November launch.

[Chris D]

Yup, it's on CNN's homepage. Not looking good. I just hope that whenever the PS3 does come out, that it's worth it.

[DavidB]

It's the same with computer printers, they are all sold at a loss. If you look at someone like HP's revenues from Ink sales they are huge!

[P-Dub]

PLAYSTATION®3 LAUNCHES ON NOVEMBER 17, 2006 IN NORTH AMERICA
Equipped with Blu-ray and Pre-Installed HDD
United States: US $499 (20GB HDD) and US $599 (60GB HDD)
Canada: CAN $549 (20GB HDD) and CAN $659 (60GB HDD)

Here's the link to the press release

This is pretty good pricing, Blu-ray capability, HDD and a game system in one unit.

[JonMarsh]

The lower cost system reportedly won't have an HDMI connector, so probably won't support movies at full res.

[Dean McManis]

I'll be definitely waiting until next year before buying one. :P

First off, for the price gouging and inevitable buying frenzy to die down, and secondly to wait until there is a decent collection of HD movies available to buy.

I'm definitely NOT going to be instantly replacing all of my DVDs right away, especially with the format war unresolved, and only a fraction of my movie collection needing HD resolution (relative to the cost). 8)

[Chris D]

I saw the same article today, but you all beat me to posting it here. I thought it was interesting that they specifically mentioned the new PS3 controller looking like the PS2. The pictures I had seen of it over the last several months looked new and interesting, like a small silver boomerang, very sleek. I'll have to see pics of the latest version.

If it's approx. $200 more than its XBox 360 counterpart version, then I just hope they make it worth it.

I'll be entertaining the idea of getting one.

[Sponge]

They dumped the boomerang because of backlash...the new controller loses the rumble/vibrate (much lighter) but gains a gyroscope motion sensor ala Wii but probably not near the capablities...remains to be seen the industry knew it was going to be different but knew nothing of that controller until the Sony Conference at e3

That $200 more gets you Blue-Ray (360 not HD-DVD yet) the bigger HDD, HDMI, and wireless router, 7 (I think) USB ports...also bluetooth controller vs. IR on the 360

Can't wait for it to be added into the rack!