Sony Not Planning A Major Loss With Launch Of PS4

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During an earnings conference call, Sony CFO Masaru Kato said his company is not planning a major loss to be incurred with the launch of PS4. Emphasis on "not planning."

"Unlike PS3, we are not planning a major loss to be incurred with the launch of PS4," said Sony CFO Masaru Kato during an earnings call that ended moments ago. "At the time we developed PS3, we made a lot of in-house investments to develop the chip, the Cell chip. Development of the chip saw the silicon processing and all the facilities invested by us ourselves. But this time, yes we have a team working on chip development, but we already have existing technology to incorporate and also product investment and all the facilities will now be invested by our partners, other foundries, so we don't have to make all the investment in-house."
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I have no doubt it will dominate the Asian market at whatever price they set. Whether that's enough volume to make a profit, I don't know.
 
Hop-Scotch said:
I have no doubt it will dominate the Asian market at whatever price they set. Whether that's enough volume to make a profit, I don't know.
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Well, considering that the sales for the Wii U haven't exactly been all that encouraging, it wouldn't take much to "dominate" any market for a next generation console.

And this is from someone who likes Nintendo.
 
Hop-Scotch said:
I have no doubt it will dominate the Asian market at whatever price they set. Whether that's enough volume to make a profit, I don't know.
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I suspect it may end up dominating the U.S. market as well. Sony appears to really be looking at things the right way this time: it's really in Microsoft's court to not allow for that to happen by doing something more compelling.
 
The fact they are designing the PS4 to be way way more "PC-like" means cheaper chips/hardware/development costs

Still going to suck the day the PS4 hits -- my PC will still be several times more powerful.

The only thing i REALLY care about is if the new design and direction they are going with the internals will make it easier to get proper ports to the PC platform.
 
The PS3 sold at loss from 2006 ($240 loss per console) - 2010 ($25 loss per console) . The more they sold, the more the company lost. This time around, both the PS4 and the new Xbox will be starting out with existing technology from AMD so it should be smooth sailing compared to the last round of consoles.
 
What this says to me is they are still planning on selling it at a high price, they just won't be taking as much of a hit in the cost.

They'll do their marketing research and they'll find a price point that will allow the largest profit margin over time with it. They could have sold the PS3 for $1000 but then not many would buy it and they'd lose money anyways, or they could have sold it for $100 and taken a major hit, and probably not make up the difference with licensing fees.
 
Why do we care if they lose money or not? Just curious. Wasn't Wii the same way? Did that matter to us consumers in the end?
 
Youn said:
Why do we care if they lose money or not? Just curious. Wasn't Wii the same way? Did that matter to us consumers in the end?
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Yes and no.. It does help set the price of the system. Also, people look at it as part of sony is already in some finicial trouble, will this exacerbate their finicial problems? if overall the "feeling" of the company is bad, and they wont survive too long after console launch, then people wont be buying the system.
 
I've got to laugh at all this talk about selling consoles at a loss. This is business to them.. as if they sell them at a loss! They'd like everyone to believe this! At the end of the day they can't be selling at a loss.. or Sony's Console department would not exist. They make a profit per console... is the bottom line. Or they'd stop doing it (by choice or not).
 
PS. Still not happy about the same damn controller design! Although its always been great for Beat'em Up's and Racers... for FPS's.. its cramps me up and is uncomfortable compared to the 360's controller. Anyone else get that?
 
Seems stupid to me if your are in the market for a console isn't your point that you want them to take a loss? If they aren't going to be making a big loss it means they are going to charge you a high price for the hardware in the system.
 
^ Or a price the market can bare, while still making a profit. Why would I want to take a loss as a corporation out to make money?
 
refraxion said:
^ Or a price the market can bare, while still making a profit. Why would I want to take a loss as a corporation out to make money?
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If you will make the money back elsewhere.

Lots of companies operate on taking a loss on the entrance item if they know they will make this loss back easily with the addons (games, peripherals, services).
 
DeathPrincess said:
If you will make the money back elsewhere.

Lots of companies operate on taking a loss on the entrance item if they know they will make this loss back easily with the addons (games, peripherals, services).
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Yup, but Sony isn't in the greatest of situations right now. So if I were them, I'd try to sell it at a price the market could bare and still make a profit. If you focus on losing more money, we might not even have a Sony lol.
 
refraxion said:
^ Or a price the market can bare, while still making a profit. Why would I want to take a loss as a corporation out to make money?
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I don't care what you want as a corp, the point is what does the consumer want, whole point of consoles is to take a loss at the start. If they don't do that it means they have crap for hardware, IE no point in buying or they are way over charging you, IE buy a PC.
 
refraxion said:
Yup, but Sony isn't in the greatest of situations right now. So if I were them, I'd try to sell it at a price the market could bare and still make a profit. If you focus on losing more money, we might not even have a Sony lol.
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Well then all MS has to do is be willing to take a loss and boom sony loses this gen.
 
OH! ok.... so they were deliberately planning to lose money on the ps1-ps3 and psp and ps vita? No wonder they need to sell their buildings.....
 
refraxion said:
Yup, but Sony isn't in the greatest of situations right now. So if I were them, I'd try to sell it at a price the market could bare and still make a profit. If you focus on losing more money, we might not even have a Sony lol.
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Its a balancing act, do you sell for a profit and lose potential sales, or do you Sell for a loss to gain potential sales? Typically most people pick up one or two games right of the bat and normally an extra controller. I remember seeing some where that nintendo cost to make the wii remote controller was like 6bucks. so if they turn around and sell it to best for like 20-25, Then best buy jacks it up to 39.99

I dotn think they lost nearly as much on PS1 and PS2 as they did with PS3 per console. Part of that though was because sony was pushing the Blu-ray format hard and really wanted to win the Next gen format wars.
 
PS3 was a sad story for Sony. Hopefully for them next gen turns out better. Still on the fence if I'm going to upgrade or not. My PS3 is basically a glorified media player.
 
Steve said:
The PS3 sold at loss from 2006 ($240 loss per console) - 2010 ($25 loss per console) . The more they sold, the more the company lost. This time around, both the PS4 and the new Xbox will be starting out with existing technology from AMD so it should be smooth sailing compared to the last round of consoles.
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hasn't that always been the case with every new generation of consoles?
 
HoffY said:
I've got to laugh at all this talk about selling consoles at a loss. This is business to them.. as if they sell them at a loss! They'd like everyone to believe this! At the end of the day they can't be selling at a loss.. or Sony's Console department would not exist. They make a profit per console... is the bottom line. Or they'd stop doing it (by choice or not).
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They sell the consoles at a loss to get more of them sold, the more consoles sold the more accessories and games that will sell. The real money is accessories (large profit margin) and games (they charge $10-20 per game sold). Now if people buy 2-3 controllers and say 10-20 games, Sony is going to make $300-500, if they were losing $200 on the console, they still come out ahead.
 
darkstarcow said:
They sell the consoles at a loss to get more of them sold, the more consoles sold the more accessories and games that will sell. The real money is accessories (large profit margin) and games (they charge $10-20 per game sold). Now if people buy 2-3 controllers and say 10-20 games, Sony is going to make $300-500, if they were losing $200 on the console, they still come out ahead.
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"They make a profit per console... is the bottom line."

Missed that part did you soldier?
 
doh... no edit. Either way.. i still dont think they sell consoles for a loss. There no hard evidence of this. And the only real evidence we have is hardware costs (which can give us a decent indication) and the simple facts of business... and both tell me that they make a profit on the hardware. I wouldn't even belive Sony if they come out and said it simply because... since when would they tell the truth about their inner workings? Rarely.. if at all. Anyone that thinks differently is surely naive.
 
HoffY said:
doh... no edit. Either way.. i still dont think they sell consoles for a loss. There no hard evidence of this. And the only real evidence we have is hardware costs (which can give us a decent indication) and the simple facts of business... and both tell me that they make a profit on the hardware. I wouldn't even belive Sony if they come out and said it simply because... since when would they tell the truth about their inner workings? Rarely.. if at all. Anyone that thinks differently is surely naive.
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It was a known fact both MS and Sony sold the current gen consoles at a loss when they first produced them. I believe that situation stopped for MS and if it wasn't for their PSN fiasco and discounting to help restore sales, I think Sony probably would have switch to profitability.

They have being seemingly forthcoming this time because they are in a bit of trouble with owners. But it appears that MS without Gates is sensitive to owners too. So they've both look to be on similar paths wrt to gaming hardware. The only difference will be that MS this time out is trying to debut with the multipurpose box.

But last time out, they pretty much killed Nintendo in a delayed reaction way. The Wii was fun and popular but its lacking capability pretty much left people with a negative opinion. The WiiU flopped because nobody wanted to be stuck with the underpowered console with a gimmicky controller again. If the xbox and ps3 built down to a profitable level at debut, the Wii's gimmicky controller and game line up might have dramatically changed Nintendo's current perception and more people would have taken a chance on the WiiU. Since Sony and Microsoft can bring massive amounts of money to bare from their non-gaming businesses, they basically have eliminated Nintendo. Although a generation late.

The marketplace can be manipulated from within as much as from without. And there are people who are fiercely protective of these situations as there are people who want the government to manipulate the marketplace.
 
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