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Sony Finally Turning a Profit On PS3s

Soulskill posted more than 3 years ago | from the catching-up-with-moore dept.

PlayStation (Games) 117

When the PS3 launched in 2006, estimates pegged the price of producing the consoles to be as much as $250 more than the price at which they were sold. Production costs have dropped since then, but there have been several price cuts as well. Now, almost four years later, Sony Worldwide Studios president Shuhei Yoshida says they're finally turning a profit on the hardware. "This year is the first time that we are able to cover the cost of the PlayStation 3,' Yoshida said. 'We aren't making huge money from hardware, but we aren't bleeding like we used to.' In May, Sony began shipping new PlayStation 3 consoles with smaller and more cost-effective graphics chips. Now, Yoshida said, Sony is looking at replenishing retail stock that has been running on empty since January rather than cutting the price. 'When we bring the cost of hardware down, we are looking at opportunities to adjust prices if we believe that will increase demand,' he explained. 'At the moment, we are trying to catch up our production.'"

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117 comments

I want to (0, Troll)

wangbangersanonymous (1830288) | more than 3 years ago | (#32754020)

fuck you in the ass!

Re:I want to (-1, Flamebait)

therealobsideus (1610557) | more than 3 years ago | (#32754068)

Feel free, the rougher the better. Unless you're fat and ugly. On another note, I agree with CaptainNerdCave @ "Why cut prices?" - I would like the original functionality that was planned returned rather than a cheaper unit.

Why cut prices? (3, Interesting)

CaptainNerdCave (982411) | more than 3 years ago | (#32754060)

Why not return the features that were removed? Why not add more features? I was going to buy a PS3, but scrapped those plans when several things went out the window. How many other people are like me?

A cheaper turd is still a turd.

Re:Why cut prices? (0, Flamebait)

djupedal (584558) | more than 3 years ago | (#32754072)

Well, since you don't list any of those features, we can only assume your question is rhetorical, which leaves it with the typical agenda-smell of someone looking to do nothing more than gin up cheap controversy.

While we wait for that to happen...

I'll take a large order of fries, one 1/4 pounder w/cheese and some of those mystery chicken bits - to go, thanks. And straighten your apron,...greasy butt-cracks this time of day ruin my appetite.

Re:Why cut prices? (4, Interesting)

GrumblyStuff (870046) | more than 3 years ago | (#32754090)

Features such as PS2 backward compatibility. I'd mention Linux but, frankly, the backward compatibility is the big one.

Funny that they don't mention dropping hardware for PS2 games. Wikipedia says they don't even emulate anymore. Guess that saves them some time and money too.

Re:Why cut prices? (1, Interesting)

Totenglocke (1291680) | more than 3 years ago | (#32754234)

My thoughts on the PS2 compatibility? I think that it's a simple software feature that they removed once they saw that there was still demand for new PS2 consoles. Once they reach a point where no one wants to buy PS2 consoles anymore, I have a feeling that they'll push an update that adds PS2 compatibility (seeing as there's no reason it can't do it since the PS3 will play PSX games).

Re:Why cut prices? (3, Informative)

Chris Mattern (191822) | more than 3 years ago | (#32754372)

I think that it's a simple software feature that they removed once they saw that there was still demand for new PS2 consoles.

It wasn't software emulation at all at first, and it was never all software emulation. The very first PS3s actually had what amounted to a PS2 built into them (hardware compatible PS3s were never sold at all in Europe). Then they eliminated the most of that hardware and covered it up with software emulation (which resulted in the PS2 emulation breaking with some PS2 games). Then they eliminated the rest of it and told folks, "Want a PS2? Buy a PS2." PS3 models that were built to emulate PS2s still do; it's just Sony hasn't manufactured PS3s that do that for years now.

Re:Why cut prices? (1)

Totenglocke (1291680) | more than 3 years ago | (#32754684)

Yes, I'm aware of that. However, I've seen no evidence that the software backwards compatibility wasn't just code that they stopped including in the OS.

Re:Why cut prices? (4, Informative)

Narishma (822073) | more than 3 years ago | (#32754760)

You can see the evidence if you open a PS3 with PS2 backwards compatibility, and one without and compare their motherboards (or go to a website that does that sort of thing). Then you'll see that the newer ones don't have the PS2 chips. PS2 emulation on PS3 always relied on PS2 hardware inside the PS3. At first it had both the CPU and GPU, then they removed the CPU and emulated it on the Cell processor but left the GPU in there. Finally they removed the GPU so it wasn't possible to run PS2 games anymore. I don't think the PS3 is powerful enough to emulate PS2 games at full speed in software.

Re:Why cut prices? (0)

Anonymous Coward | more than 3 years ago | (#32757340)

So... are you telling me they lied when they said "It only does everything!"?

Re:Why cut prices? (1)

gullevek (174152) | more than 3 years ago | (#32754738)

Why would anyone buy a PS2 if he can have a PS3. I never understood that. I would never play a PS2 game on a PS3. Why? For what? And if you have PS2 games it is highly likely you do have a PS2. So again, why?

Re:Why cut prices? (2, Insightful)

sonicmerlin (1505111) | more than 3 years ago | (#32754866)

Consolidate living room hardware? I also still have some PS2 games I haven't yet finished. It has such a huge catalog.

Re:Why cut prices? (1)

cbope (130292) | more than 3 years ago | (#32754962)

How about cost? I bought my current PS2 slim a few years ago, but after the PS3 had launched. The PS2 was at the time about 30% of the price of the then-new PS3. I needed a new DVD player at the time, which the PS2 was good for (and which I still use today as my main DVD player), plus I'm not a console-heavy gamer. I prefer gaming on PC, but I have picked up a dozen or so PS2 games at a fraction of their original price. Compare that to the ridiculous price a current-gen console game sells for when new. I have never paid more than $20 for any PS2 game that I own and I have never bought used.

I will probably never buy a latest-gen console, simply due to the cost of games. If I want better graphics, then I game on PC where I can get far better graphics than even the latest console. The console in my house is mainly for casual gaming or a few games that I play co-op with my wife.

If the new PS3 would have PS2 backward compatibility, then I would consider it today as an upgrade, but not the current hardware which has been castrated. I had originally planned to upgrade to PS3 some time after it came out but then Sony decided to remove one of my main incentives to upgrade.

Re:Why cut prices? (1)

nomorecwrd (1193329) | more than 3 years ago | (#32758842)

And the PS2 is a great machine:
Graphics to the max of what standard definition is capable of, very rich 3D environments.

Today the PS2 is a very affordable (cheap) console, with a gaming experience on pair with high end systems, I would only recommend getting a PS3 or XBOX to hardcore gamers, for everyone else, the PS2 is the console to love.

Who cares about AC3 sound or super high resolution, when you are having great of fun shooting and escaping from enemies in fast-paced games like "Black" or "Call of Duty"?

Just my two Pesos.

Re:Why cut prices? (1)

tepples (727027) | more than 3 years ago | (#32755028)

And if you have PS2 games it is highly likely you do have a PS2.

Unless your PS2 broke, or unless you're getting into PS2 for the first time after seeing the low price of used game discs. Or unless Sony stops making new PS2 consoles, which will cause the eBay price for used ones to shoot up.

Re:Why cut prices? (1)

drinkypoo (153816) | more than 3 years ago | (#32755134)

Or unless Sony stops making new PS2 consoles, which will cause the eBay price for used ones to shoot up.

This hasn't happened historically. The eBay price is loosely fixed to the Funcoland^WGamestop price. It's not until the console becomes scarce that the value begins to rise; there's more used PS2s out there than at which you can can safely shake sticks.

Re:Why cut prices? (1)

tepples (727027) | more than 3 years ago | (#32756910)

The eBay price is loosely fixed to the Funcoland^WGamestop price.

Until even GameStop stores stop carrying PS2. I got my Dreamcast on clearance; GameStop stores don't carry them anymore.

there's more used PS2s out there than at which you can can safely shake sticks.

This will remain true only until the lasers in existing units start dying. Then the console will start to become scarce. Or is it like the NES, where an easily found replacement ZIF connector makes a console work like new?

Re:Why cut prices? (1)

drinkypoo (153816) | more than 3 years ago | (#32757112)

Until even GameStop stores stop carrying PS2. I got my Dreamcast on clearance; GameStop stores don't carry them anymore.

You can still get Dreamcasts for $20 at flea markets and such. By the time this is not true, statistically, no one will care.

This will remain true only until the lasers in existing units start dying. Then the console will start to become scarce. Or is it like the NES, where an easily found replacement ZIF connector makes a console work like new?

I suspect that the laser units will continue to be readily available. They're just ripoffs of discman parts, and they have been since the PS1. This is why they suck so bad, Sony has never been able to make a reliable laser read head, or pickup, or whatever you call it. (It's got the laser, the pickup, the lens, and the lens height control, it ought to be called a head.) If Sony should stop producing replacement parts, I'm sure someone will step up to produce them so long as there is demand (i.e. so long as third parties are still repairing PS2s.) You can still get replacement parts for Sega Saturn, so I think it's safe to say that PS2 parts will be available long into the future.

The lack of backwards-compatibility is one reason I never bought into PS3; even the units which had hardware for it fail on some games. The lack of GPU access under Linux was another; now there's no Linux (with the usual caveats about un-updated units) so that's a moot point. I was willing to accept it on PS2 because the hardware wasn't interesting enough for me to want to run Linux on it in the first place, mostly due to the lack of main memory. I do still have a PS2, which I use mostly to play PS1 games, and occasionally (very rarely, really) to watch a DVD on my CRT TV.

Re:Why cut prices? (1)

Nyder (754090) | more than 3 years ago | (#32755122)

Why would anyone buy a PS2 if he can have a PS3. I never understood that. I would never play a PS2 game on a PS3. Why? For what? And if you have PS2 games it is highly likely you do have a PS2. So again, why?

I have a fat ps2. It has a harddrive in it. I have MCFreeboot, so I don't have to use the dvd drive for anything.
Has a good SNES & Genesis emualtors (others seem a bit lacking, like no harddrive support).
Oh, and I have a ton of games I can play off the harddrive. Plus new games are still being released for it.

Buddy paid me some money to do a ps2 up for him that way. For about the price of a new ps3, he has a ps2 with a bunch of games, like rockband 2 and stuff. He's happy, his kids are happy.

But by your logic, why buy a PS3 when you have a computer? It does all the same things a PS3 can. Play games, go online, etc.

Re:Why cut prices? (1)

tophermeyer (1573841) | more than 3 years ago | (#32755694)

I picked up a PS3 about 9 months ago, primarily because of the Blu-Ray player. I never owned a PS2 so I don't have a library of PS2 games, but I am aware that there is a huge number of really awesome older games for the PS2. Backwards compatibility would be a wonderful feature for me, and users like me. New PS3 games are expensive, but for $20 I can grab a classic game (or two) from Gamestop.

I always assumed this was reason Sony discontinued backwards compatibility support was to discourage the second-hand market of older titles. Sony doesn't see any of that cash stream, and probably considers those sales to be "lost sales" of new older games. To me that would be a feature. But of course since they're already taken my money for the thing, Sony has no real interest in keeping me happy.

Re:Why cut prices? (2, Insightful)

larry bagina (561269) | more than 3 years ago | (#32756594)

for $20 you can also buy a new copy of an older PS3 title.

Re:Why cut prices? (0)

Anonymous Coward | more than 3 years ago | (#32756750)

or pick them up for $1 at garage sales. Try that with used ps3 games.

Re:Why cut prices? (0)

Anonymous Coward | more than 3 years ago | (#32756356)

Some older games still look great on PS2, like Final Fantasy XII. I'd pop that into the PS3 and get that jaggy polygon look a little bit anti-aliased. Up the resolution, and bam, you have a game that is really, really pretty.
 
Might I note that my favorite series, such as Persona or Dragon Quest, has never appeared on the PS3 console.

Re:Why cut prices? (1)

ookaze (227977) | more than 3 years ago | (#32758456)

Why would anyone buy a PS2 if he can have a PS3. I never understood that. I would never play a PS2 game on a PS3. Why? For what? And if you have PS2 games it is highly likely you do have a PS2. So again, why?

I don't match any of your scenario.
I never had a PS2, and I bought a PS3 specifically for its PS2 compatibility. Actually, I bought a PS3 when they announced they were clearing stock of PS2 compatible PS3. Guess what, I still were able to buy old PS2 games new, and several PS2 games I bought went gold after I bought my PS3, like Persona 4.
And I play all my PS2 games on PS3. Even worse for you, I even play PS1 games on it!!!
Some people are more gamers than graphics whores, which is why FFVII PSN sold very well for example.

Re:Why cut prices? (0)

Anonymous Coward | more than 3 years ago | (#32758286)

No, they will retool the games to play under the PS3 hardware and re-sell them to you as downloadable titles on PSN.

They will never restore BC to allow you to play PS2 discs in a future or current non-BC model.

Re:Why cut prices? (0)

Verunks (1000826) | more than 3 years ago | (#32754434)

Features such as PS2 backward compatibility. I'd mention Linux but, frankly, the backward compatibility is the big one.

Funny that they don't mention dropping hardware for PS2 games. Wikipedia says they don't even emulate anymore. Guess that saves them some time and money too.

the ps2 hardware emulator was removed right after launch, european ps3 never had it, instead they used a software based emulator, so yeah there was no real reason to remove it from newer models to cut the price, the only reason is that the ps2 is still selling well after 10 years, and probably because the emulator didn't work very well. Microsoft halted the xbox1 emulator development after a few months too but I don't know if they removed it from newer models.

Re:Why cut prices? (2, Interesting)

Troed (102527) | more than 3 years ago | (#32754566)

This earlier post [slashdot.org] in this same thread corrects you.

(My european PS3 does indeed have hardware to do PS2 emulation)

Re:Why cut prices? (1)

DinDaddy (1168147) | more than 3 years ago | (#32759458)

No, the Euro version never had full harware BC. The launch US 60GB and 20GB had the Emotion Engine (CPU) as well as the GPU from the PS2 built in.

The launch versions in Europe had the GPU, but used software emulation of the EE right from the beginning.

There has never been any version anywhere that had full software emulation of the CPU AND GPU, so when people say software emulation, they mean of the CPU only.

So no, your European PS3 does not have hardware BC. It has the software emulation.

Re:Why cut prices? (1)

Troed (102527) | more than 3 years ago | (#32760170)

The launch versions in Europe had the GPU, but used software emulation of the EE right from the beginning.

==

(My european PS3 does indeed have hardware to do PS2 emulation)

***

so when people say software emulation, they mean of the CPU only

No, as evident from several posts in this thread where people believe Sony "turned off" software emulation in newer PS3s when the fact is that the hardware support isn't there.

Re:Why cut prices? (1)

Merls the Sneaky (1031058) | more than 3 years ago | (#32754666)

My 360 elite still plays original xbox games I have around. Cant speak for the slim though.

Re:Why cut prices? (1)

lyinhart (1352173) | more than 3 years ago | (#32754930)

The Slim should do it as well. Backwards compatibility for original Xbox games is available in the Xbox 360 through software. Some say it's an emulator, but considering how it requires downloading some kind of compatibility info for each game to your 360, I'm guessing it's a compatibility layer.

Re:Why cut prices? (2, Informative)

tepples (727027) | more than 3 years ago | (#32755040)

Some say it's an emulator, but considering how it requires downloading some kind of compatibility info for each game to your 360, I'm guessing it's a compatibility layer.

It's what the emulation scene calls a "high-level emulator". It emulates the user mode part of the game (which is x86 bytecode) and reimplements the "Windows XB" operating system (which is function names).

Re:Why cut prices? (1)

bdcrazy (817679) | more than 3 years ago | (#32756870)

I always assumed the downloading for every new game you insert was the xbox downloading code to sign the executable to your system. Maybe I'm just being paranoid. I just find it really odd that after you download an arcade game, it has to download MORE data. Couldn't it have done it all at once? Or fix the original download?

Re:Why cut prices? (1)

LambdaWolf (1561517) | more than 3 years ago | (#32757080)

I'd mention Linux but, frankly, the backward compatibility is the big one.

At least, if backward compatibility ever worked on your PS3, it still works today. But Linux was forcibly removed from bought-and-paid-for consoles—at least, it was if you wanted to continue using any online services, and many people applied the patch anyway without knowing that their Linux installations would be trashed—because of some paranoid anti-piracy strategy. That isn't just corporate greed undermining a product's features, it's downright malicious to your private property, much like the Sony BMG rootkit scandal.

Just use PCSX2 (1)

rsilvergun (571051) | more than 3 years ago | (#32757230)

ok, it's not the most practical solution yet, but it's GPL'd and many games are fully playable. You do need a pretty good system, but nothing too crazy. My buddy's year old gaming laptop plays FF12 at 60 FPS (off a hard disk image mind you, but really, if you're reading /. you can figure that out).

Re:Why cut prices? (1)

osgeek (239988) | more than 3 years ago | (#32757886)

Backward compatibility bothered me at first because I wanted to consolidate things; but there are so many great PS3 games out there now, that I just don't have time to play them all. I still have my old PS2 with some unfinished games that I never seem to turn on anymore.

I guess if you're a voracious gamer who spends 40 hours a week finishing one game after the other, you should worry about having a huge library available. But since I only average 5-10 hours a week, the PS3 market keeps me more than satisfied.

I 3 my PS3. What a great way to kill a few hours on a Saturday. Enjoying the hell out of God of War III at the moment.

Re:Why cut prices? (1)

thesandtiger (819476) | more than 3 years ago | (#32760630)

I have one of the 60GB PS3's from the first run - the ones with the hardware PS2 emulation. Recently someone offered me an xbox slim & a ps3 slim for it, which I found hilarious.

Re:Why cut prices? (1)

CaptainNerdCave (982411) | more than 3 years ago | (#32755132)

You make a good point, I should have listed some of the missing features, but I stopped paying attention to the specific features after backwards compatibility disappeared. Since the two biggest features (for me) were blu-ray playback and backwards compatibility, I stopped caring much after half of the reasons got quashed. Being a regular reader on here, it's kind of hard to miss all the Sony hate and the regular reports about PS3 features disappearing as fast as American civil liberties.

Re:Why cut prices? (1)

SenseiLeNoir (699164) | more than 3 years ago | (#32755296)

Blu ray playback is still fully available, and support has been added to ever since the release, to become a REALLY good BluRay player.

The only thing that has been removed by Firmware is the OtherOS (allow running of linux). The PS3 slim never had that capability anyway.

Backward compatibility was available 100% on initial sales of the PS3 in the US, by including the full PS2 HARDWARE in the console. That got removed in a hardware update. The initial Euro versions had the GPU, but the CPU was emulated. Even that was taken out on later hardware.

So, any new hardware cannot play PS2 games since about early 2008, because of lack of the hardware chips. They were NEVER capable of playing PS2 games, as the PS3 cannot emulate the PS2 in software on its own. ALL ps3s do emulate the PSOne though, and still do.

Though who have older hardware continue to have backwards compatibility, it has NOT been removed from firmware.

Lastly, for those thigns that have been taken away, many USEFULL stuff has been added and improved to replace it, so its neither here, nor neither there.

Re:Why cut prices? (0, Flamebait)

mysidia (191772) | more than 3 years ago | (#32755920)

Sony: we secretly replaced this guy's new PS3 with a DRM-laden brick. Let's see if he finds out...

Nope... he didn't find out.

The PS3 lost its appeal when it stopped coming with hardware PS2 capabilities.

American civil liberties??? What are those?

There are no civil liberties in America... there have never been any civil liberties in America, just ask the supreme court, congress, or el presidente..

Re:Why cut prices? (0, Flamebait)

Anonymous Coward | more than 3 years ago | (#32754206)

Why not return the features that were removed? Why not add more features? I was going to buy a PS3, but scrapped those plans when several things went out the window. How many other people are like me?

A cheaper turd is still a turd.

I agree, if it had backwards compatability and otheros I might buy one... I still have many ps2 games I haven't completed but I figure when I'm done with them, I'll move on to the next big thing which will probably be an xbox 720 :)

Re:Why cut prices? (0, Troll)

ArcRiley (737114) | more than 3 years ago | (#32754208)

Ditto. I was planning to purchase a PS/3 for our home entertainment system just before they decided to end support for the Other OS feature.

Then again, their Linux support was never that great with their intentionally crippled hypervisor. What use is a Linux console without accelerated 3d and video? I can build a dual core system with 2gigs ram and accelerated graphics for under $150.

Re:Why cut prices? (1)

jplopez (1067608) | more than 3 years ago | (#32754310)

I can build a dual core system with 2gigs ram and accelerated graphics for under $150.

Where? In Lala-land? A *decent* dual-core mobo and the CPU would already be around $150. Add another $100 or $150 for a starter graphics card.

Re:Why cut prices? (0)

Anonymous Coward | more than 3 years ago | (#32755088)

Nonsense.
An Athlon II x2 can be had for $50 and acceptable motherboard for it as low as $40. A video card much better than what's in the consoles can be had for $50-60. You still need the ram/case/PSU/dvd drive but for under $250 you can surely build an acceptable gaming computer.

Re:Why cut prices? (1)

blind biker (1066130) | more than 3 years ago | (#32754562)

I'm in the same boat. There is a ton of PS2 games which i like. in fact, there's a whole lot more ps2 games that I like, than PS3 ones. And there's also a lot of PS ONE games that are still great fun. Asking for backwards compatibility to that level would be way, waaaaayyy too optimistic.

Re:Why cut prices? (1)

Narishma (822073) | more than 3 years ago | (#32754806)

All PS3s (and PS2s and PSPs) can play PS1 games.

Re:Why cut prices? (1)

tepples (727027) | more than 3 years ago | (#32755070)

All PS3s (and PS2s and PSPs) can play PS1 games.

Has the entire library of PS1 games been made available in the PSN store, or are some still missing due to copyright issues?

Re:Why cut prices? (1)

Per Wigren (5315) | more than 3 years ago | (#32755166)

All PS3s can play original PS1 game discs. It doesn't do any upscaling or other enhancements though, it's just like having standard PS1 with HDMI.

Re:Why cut prices? (1)

tepples (727027) | more than 3 years ago | (#32756702)

Narishma mentioned PSP, which has no CD-ROM attachment for PS1 game discs. Nor does an unmodded PSP take PS1 game ISOs that haven't been digitally signed by Sony.

Re:Why cut prices? (1)

DinDaddy (1168147) | more than 3 years ago | (#32759560)

I have not checked, especially recently, but my impression is that it is just a sampling of popular titles, nothing even close to the entire library.

Re:Why cut prices? (1)

poetmatt (793785) | more than 3 years ago | (#32754882)

not only that, but the price was atrocious at launch. Did it really take them 4 years to realize that they needed to lower the price from the straosphere?

$400-600 for a console is retarded.

Re:Why cut prices? (1)

DinDaddy (1168147) | more than 3 years ago | (#32759590)

Prices were lowered years ago. Not to their present level, that took a couple of steps, but they began lowering when they took the BC out a couple of years ago.

Re:Why cut prices? (1)

Nyder (754090) | more than 3 years ago | (#32755084)

Why not return the features that were removed? Why not add more features? I was going to buy a PS3, but scrapped those plans when several things went out the window. How many other people are like me?

A cheaper turd is still a turd.

I'm with you on that.

Re:Why cut prices? (0)

Anonymous Coward | more than 3 years ago | (#32755206)

Awwww boo hoo, you can play PS3 games on it can't you?

Re:Why cut prices? (0)

Anonymous Coward | more than 3 years ago | (#32758870)

No kidding. Where do these fuckers get off removing a feature we paid for, instead of supporting it like they are legally obliged to? Their actions are out and out theft as far as I'm concerned.
SONY doesn't belong in an open market.

IOW, SNAFU (2, Insightful)

Magada (741361) | more than 3 years ago | (#32754074)

The old hardware's too pricy to keep making, there's not enough of the new cheap stuff so they're bleeding in new and interesting ways - not having enough product to sell is making distributors angry and their profits small. They're hoping that passing on some of the savings to some of the distributors will make them less angry. That will make their per-unit profit even smaller but they hope to compensate with volume, maybe, someday, when they are able to make enough of the damn things.

SNAFU? Not necessarily... (1)

Lonewolf666 (259450) | more than 3 years ago | (#32754290)

That will make their per-unit profit even smaller but they hope to compensate with volume

If they make a profit on the hardware at all, they are in a better position then before.

Most of the time (and including earlier PS3), console hardware is sold at a loss to push it into the market and the vendor regains the money from game sales. The Wii was the first among the current generation consoles that broke this tradition. Now, after some cost-saving redesigns, PS3 sales also cover the cost for the hardware. I'm not sure about the present situation of the XBox 360, but when it was new it was sold at a loss too.

Re:SNAFU? Not necessarily... (1)

delinear (991444) | more than 3 years ago | (#32755128)

Some sites suggested that the 360 made it into profit less than a year after launch (based on estimates of shaving 40% off the cost to produce as component prices fell), however that doesn't take the red ring o' death debacle into account, which I'm sure kept the company in the red (no pun intended) on the hardware front for a few more years.

Re:SNAFU? Not necessarily... (1)

ookaze (227977) | more than 3 years ago | (#32758686)

Most of the time (and including earlier PS3), console hardware is sold at a loss to push it into the market and the vendor regains the money from game sales. The Wii was the first among the current generation consoles that broke this tradition.

This "everyone sells its console at a loss" is a myth.

This was never a tradition, so the Wii didn't break any tradition. Nintendo is the older console manufacturer still alive, so is the traditional one, and they never sold their console at a loss, except the very first months of Gamecube because they quickly dropped the price before launch.

Sony is the big one that introduced this business tactic that was then followed by several companies or gaming division of companies which all met their demise. This includes Sega, MS and Sony.
You'll rightly tell me MS and Sony gaming divisions are not dead, but the only reason why is because they are big enough and had enough profit in other divisions to stand the billions of dollars they lost by using this tactic.
This tactic only works when you're the one with the biggest market: the one with the more consoles and who sells the most games. When you don't, you fail harder to the point of not being able to sustain it even one generation.
The net result of XBox is a loss of 6+ billions of dollars, as for the PS3, they lost as much as they profited with the PS1 and PS2 combined! Two generations of profits (due to being market leader) erased with only one generation of loss (due to not being leader).

Nintendo says... (4, Funny)

GrumblyStuff (870046) | more than 3 years ago | (#32754076)

"What's that?! Speak up! I can't hear you from this giant pool of money I'm swimming like Scrooge McDuck!"

Re:Nintendo says... (1)

gblackwo (1087063) | more than 3 years ago | (#32754092)

Different products, different markets. Yes, there is some gray area, but anyone who has taken econ 101 will tell you that the products are not direct competitors.

Re:Nintendo says... (2, Interesting)

GrumblyStuff (870046) | more than 3 years ago | (#32754112)

I was thinking more in terms of home console (profits from base system) vs home console (profits from base system). You know, Wii vs PS3. Yes, yes, they're not direct as in beer competitors Coors and Bud (in that they're selling the same piss flavored shit) but they are still aiming for the same function so there's a pretty big overlap of markets.

Also, PS3 is getting its own motion controller. Different products are becoming not as different.

Re:Nintendo says... (2, Interesting)

delinear (991444) | more than 3 years ago | (#32755198)

It seems like Sony's usual mis-step of creating nice hardware but completing misjudging the mood of the market. They released a be-all-end-all console that could play games from the current and last two generations, contained a Blu-Ray player and was a Linux computer, but they charged an astronomical price at launch. It then transpired that there market wanted a cheap, dedicated game console and didn't care about the bells and whistles. The world economy starting to collapse a year later probably didn't help, but disregarding even this it was badly judged - if they'd stuck to their guns and produced a cheap, solid gaming console they'd have likely hit profit much sooner and wouldn't now have a bunch of angry customers who've seen the feature set of their purchase pared down. The flip side of the coin is that the PS3 helped them win the BD/HDD war, and taking a long term view maybe they're going to reap back far more than they'd have lost with a cheap console and HDD being the market standard - time will tell on that score.

Re:Nintendo says... (1)

tophermeyer (1573841) | more than 3 years ago | (#32755914)

Yeah I think you are right on with regards to the outcome of the format war. They released an ultimate home entertainment gadget that put a Blu-Ray player in 90% of American technogeek living rooms. Looking at their direct competitor, MS put out that crappy HD peripheral drive that put the cost of the completed Xbox 360 system at the same price point as the PS3, with fewer features and poorer graphics. Sony bit the bullet and took a loss on the hardware, and I think that will pay off huge for them.

Re:Nintendo says... (0)

Anonymous Coward | more than 3 years ago | (#32754422)

You're right, of course. Sony is pushing 3D gaming, which makes the PS3 a direct competitor of the 3DS.

Re:Nintendo says... (1)

tepples (727027) | more than 3 years ago | (#32755100)

Sony is pushing 3D gaming, which makes the PS3 a direct competitor of the 3DS.

Anyone who remembers SCEA's almost-ban on 2D games from the PS1 and PS2 era will take issue with your comment. At least one Metal Slug game was Xbox-exclusive in North America because of this. By "3D" did you mean stereoscopic?

Re:Nintendo says... (0)

Anonymous Coward | more than 3 years ago | (#32754178)

http://www.youtube.com/watch?v=vouJTvrpHGQ [youtube.com] -- skip to 3:30

Re:Nintendo says... (0)

Anonymous Coward | more than 3 years ago | (#32757620)

That reminds me, if the DS and Wii both print money...

Will the 3DS print stacks of money?

whew! (-1, Redundant)

Anonymous Coward | more than 3 years ago | (#32754114)

I was worried for a second there...oh wait, I wasn't.

And just in time! (4, Funny)

Psaakyrn (838406) | more than 3 years ago | (#32754148)

Now, they can start not making a profit again when they ship Move!

DONT GET A PS3 REPAIRED - GET A PC (-1, Flamebait)

Anonymous Coward | more than 3 years ago | (#32755000)

They sell a PS3 for £100's, charge a fortune for BluRay games that are normally old and out of date by the time Sony gets them onto the PS3. If you want to play games, get a good quad or dual core PC - games are modern, more upto date and if you use Steam client, it really makes it easy to get a game updated and working. In the past PC's suffered from complications and this made games difficult to setup and play, but now graphics cards are much better and the Steam client seems to repair damaged files and update automatically.

I got a PS3 for games when it first came out, then the bluray failed and I am NOT paying £140 or whatever Sony want, to replace the bluray drive. I can get one from PC world for under £75. So it seems Sony's business plan includes making people pay for a new bluray drive every year? No wonder they are making a killing on this as it probably costs them under £50 (a diode is pennies and then you pay someone £45 for the time to replace it).

Re:DONT GET A PS3 REPAIRED - GET A PC (1)

tophermeyer (1573841) | more than 3 years ago | (#32756018)

That's the risk that anyone runs by being an early adopter of any new tech. I had a similar experience with the Xbox 360 (though MS did man up and extend the original warranty). That is why I waited for a few generations to get a PS3.

Could Sony have done more product testing and developed a more reliable system? Probably. But I doubt they intentionally engineered a defect just to make money on repair services. I think Sony would be much happier if every unit they manufactured performed perfectly for the entire lifespan of the console.

If you want to play games, get a good quad or dual core PC - games are modern, more upto date and if you use Steam client, it really makes it easy to get a game updated and working. In the past PC's suffered from complications and this made games difficult to setup and play, but now graphics cards are much better and the Steam client seems to repair damaged files and update automatically.

That is a very good point. Gaming quality of PC's will always be better. Of course, the tradeoff is that you will be facing shorter upgrade cycles. Every 12-18 months you will be replacing some piece of hardware in the thing, and those costs add up. My $400 Xbox 360 has cost me $0 in upgrade in the last 5 years. My $400 PS3 has cost me nothing in the last year, and will continue to cost me nothing for years to come.

Just in time... (0)

Anonymous Coward | more than 3 years ago | (#32754198)

For MS' cost-reduced 360 and its impending price cut.

Has the console arms race ended for now? (3, Insightful)

mykos (1627575) | more than 3 years ago | (#32754768)

I remember the 90s being full of consoles:
3DO, Dreamcast, Saturn, PS1, Atari Jaguar, N64, Philips CD-i, in addition to existing ones like Genesis/SegaCD/32x and SNES which were in the prime of their lives in the early 90s.
Now the 360 has been out for five years and the PS3 has been out for four. Neither company seems interested in making new hardware anymore, which is understandable since they lost so much money working out the bugs. But it seems that nobody wants to one-up the other anymore.
Rather than pursue hardware that is clearly superior to their competitor (as many attempted in the 90s), they just blow money purchasing exclusives.

Re:Has the console arms race ended for now? (2, Interesting)

indeterminator (1829904) | more than 3 years ago | (#32754914)

Maybe they noticed the success of casual gaming (Wii mostly), and figured that better profits await if they can sell equipment to wider audience. That instead of pushing expensive bleeding-edge hardware to small group of hardcore gamers.

Hopefully a break in hardware race forces the game publishers to move from "my effect-bling is better than yours" mode to actually compete in gameplay and quality content.

Casual? (2, Informative)

tepples (727027) | more than 3 years ago | (#32755130)

Maybe they noticed the success of casual gaming (Wii mostly), and figured that better profits await if they can sell equipment to wider audience.

Or maybe they're gluing feathers onto their bodies and trying to fly. I wouldn't say "casual" is exactly the right word [50webs.com] for Nintendo's strategy.

Re:Has the console arms race ended for now? (1)

Calinous (985536) | more than 3 years ago | (#32754954)

Anyone new to this market would be sued out of existence by the holders of game related patents (not to mention the initial cost of hardware development, the initial cost of software development - devices and SDKs, the cost to produce games that will sell the console and so on)

Re:Has the console arms race ended for now? (1)

Turzyx (1462339) | more than 3 years ago | (#32755386)

I think it's definitely stalled, yes.

There is little point upgrading hardware for any other reason than improved visuals. You can get better rendering, AA, FPS. etc, but most people are satisfied with the visual quality of the current HD gaming systems.

Are there even enough potential buyers to support a new generation of consoles? I honestly don't know, but I think they are aiming at the majority of the user base (casual), like myself who will need some serious justification to encourage me to buy a new system, and I don't think they can offer any justification at the moment. We already have HD, decent surround, WiFi, browser, motion capture etc.

The next generation of consoles will feature 3D technology. That's the next logical step, but until there is a concrete 3D standard (not just Blue-ray 3D), there will be reluctance to gamble with technological development.

Re:Has the console arms race ended for now? (1)

ducomputergeek (595742) | more than 3 years ago | (#32756224)

I also think the economy has a big part to play in things as well. It's taken Sony 4 years to break even. And given how much it cost initially, it priced a lot of people out of the market. Especially casual gamers. I have a PS2 now collecting dust because I don't have time but more over it got to the point where I wasn't willing to pay out $60 per game. Most of the PS2 titles I have were the $20 bargin games that had been out for a while. People just don't have the money to spend on it as much because a game console is largely a luxury. I know I much rather spend $60 a week going out to a nice restaurant or a saturday afternoon at the winery with friends than on a video game.

I did buy a Wii because it was a party favourite when it first came out. It was so easy to use that even my non-gaming friends, especially women, loved the tennis and other titles. Couple that with Rock Band or Guitar Hero and it was a winner for the year or two after it came out. But now as we all reach our 30's, it rarely gets used anymore. Also I generally have to spend 12 - 15 hours a day in front of a computer(s) at work between writing proposals, doing demos, and overseeing installs & updates. I don't even like sitting in front of the TV to watch TV or a movie when I get home let alone play a video game. I do like Wii Fit and Wii sports because they are a bit more interactive and you can sit down and play them for 30 minutes and then go do something else.

Good job Sony! (2, Funny)

f3rret (1776822) | more than 3 years ago | (#32755010)

Dear Sony (I know your a shiver corporate hivemind is lurking here)

Like to topic says, good job and congratulations on finally turning a profit on your product!
You only had to alienate a large section of your customers and potential customers. Hell you even managed to piss off The USAF, so that's something at least.

Odd.... (2, Insightful)

Jae686 (1203100) | more than 3 years ago | (#32755050)

I never knew that was on Sony's mind when they lauched the ps3 ? What were they expecting, brand loyalty ?

Re:Odd.... (1)

cowscows (103644) | more than 3 years ago | (#32757998)

I think they bought into their own hype. They thought they could make a machine so powerful that the Xbox 360 wouldn't be able to touch it, and that people would pay a ton of money for it. They also convinced themselves that the world was hungry for Blu-ray the same way that it had been for DVDs.

It turned out that $500-$600 was excessive for many people, the Cell processor didn't provide an insurmountable advantage, and PS3 games are not always graphically superior to 360 games. And while the Blu-ray player was certainly a selling point for some, most people are not nearly as interested in replacing their DVD's with Blu-ray movies. The difference to the consumer isn't nearly as a significant or compelling as the jump from VHS to DVD was.

Re:Odd.... (1)

CronoCloud (590650) | more than 3 years ago | (#32758500)

Yeah, I'm one of SCEfoo's hardcore fans, GAP member and everything. If they'd have asked me back in the PS2 era what kind of features I would have wanted in the PS3 I would have said:

1. HD output.
2. Ability to run Linux out of the Box with no additional hardware required.
3. built in hard drive.
4. built in memory stick reader
5. at least 4 USB ports.
6. PS2/PS1 compatibility.
7. PS3 versions of the PS2 Japan only BBN features (web browser, CD ripping, video, demos, downloads)

So they listened to people like me and not the Joe Blow who only plays Madden and ESPN games, and gave us the PS3. Joe Blow saw that price and turned away. Joe Blow is also the kind of person for whom all those features wouldn't matter, or he might not even know about them. Joe Blow is not going to want to play ESPN-foo PS2 when ESPN-foo PS3 is out.

Unfortunately, they had to cut a few features (2, Funny)

noidentity (188756) | more than 3 years ago | (#32755268)

To make this profit, though, Sony had to cut a few features from consoles (retroactively for already-sold ones as well, unfortunately):

* Linux can't be used anymore (we already know about this one)
* Blu-ray playback now includes commercials every 15 minutes
* When connected to the Internet, you must allow it to be a node in a botnet, or online play will be disabled
* To save cost, gaphics are now displayed as in The Matrix, but they say you'll quickly be able to see everything in 3D with some practice

Re:Unfortunately, they had to cut a few features (1)

elrous0 (869638) | more than 3 years ago | (#32757626)

You forget section 54-A of the new PSN Terms of Service: "Sony reserves the right to take possession of purchaser's first-born offspring at any time."

Turning Profit? (0)

Anonymous Coward | more than 3 years ago | (#32755448)

Ok, the article headline and the Slashdot headline both say "turning profit," but the article makes no statement to back this up.

From the way it reads it sounds like Sony is finally not losing money for every system that is sold. That doesn't mean that they've brought in enough income to cover the cost of developing the system, marketing it and not to mention the aggregate loss of all of the PS3s that were sold at a loss. At this stage I would expect that the Sony PS3 division is still at a net loss and probably a considerable one, but this should accelerate their income towards eventually operating in the black. However I severely doubt that they're actually profitable, yet.

Feel free to correct me if I'm wrong with an article that states otherwise.

Re:Turning Profit? (1)

Hal_Porter (817932) | more than 3 years ago | (#32755572)

I think they make a loss on hardware but make it up on the fat margins on games when the console is launched. Now they've finally reached the point where both the console and the games are profitable.

Probably the XBox360 is profitable too.

Which makes you wonder if the Sony and Microsoft couldn't just both agree to not launch any new consoles since that would put them back in the position of selling at a loss again.

Re:Turning Profit? (0)

Anonymous Coward | more than 3 years ago | (#32756174)

Because this one has historic battles with giant enemy crabs (remember to flip it over and attack its weak point for massive damage), real-time weapons switching, and RIIIDDDGEEE RAAACERRRR!!!!

Re:Turning Profit? (1)

maugle (1369813) | more than 3 years ago | (#32758566)

Which makes you wonder if the Sony and Microsoft couldn't just both agree to not launch any new consoles since that would put them back in the position of selling at a loss again.

Which would work, for a time. But Nintendo would eventually launch a new system whose graphics capabilities were on par with or better than the 360 and PS3, begin recapturing the hardcore gamer demographic, and that would be the end of that.

Total profit per PS3.. (1)

fulhack (1273072) | more than 3 years ago | (#32755908)

I wonder how much sony makes on average per PS3 sold. I guess the bulk income must be from licensing of games and such, since the hw hasn't turned a profit until now. Are there numbers on this?

YUO FAiL IT!! (-1, Troll)

Anonymous Coward | more than 3 years ago | (#32756088)

those ob7igations. dabblers. In truth,

I just bought a PS3 (1)

revlayle (964221) | more than 3 years ago | (#32756588)

I was going to build a new gaming PC, but I already have MANY other PCs in my house and I thought to myself:
- Do I need another general purpose computing device?
- To make it a good gaming PC to play latest titles with decent graphics, I need to shell out at least 500 or more (add another 100-150 for a monitor, luckily I was just going to hook it to a TV)
- Can i get similar media solutions on non-PCs

The PS3, at least for me, was already designed for gaming, decent with media (and hook to media servers - like PlayOn, for example). I was able to get a new 250GB model with a free game for $350.
The advantages:
- saved 100-200 bux on what I was going to spend
- got a BluRay player (nice, wasn't a deal maker)
- Decent game library now
- Decent connectivity
- Easier to maintain than a PS3 - quieter, and a little lower profile
- Can connect to media servers (is a bit of a disadvantage too)
- Can play videos and music off any USB device (my phone, for example) and a neat photo viewer (really, it's fluff tho)
- Online gaming is free (i dont do that very much, however)
- hard drive is upgradeable without voiding warranty (and there are tools for the PS3 to backup HD contents)

Disadvantages:
- Closed system (but I just want it for gaming)
- Web browser is an absolute POS
- Online store is a bit meh
- Only built in media choices are movie rental/purchase from the PSN store (meh)
- The media server connectivity (neat, but you do need another PC to be the server, which I already had, not good for gaming, but good for a PlayOn server) - and it does have a yearly cost ($40 for first year $20 per year afterward)
- Can't upgrade anything but the harddrive - so I could be obsolete in a few years

A Year ago I was saying "I would never buy a PS3" - but I was really afraid to buy a BreakBox 360, so PS3 it was
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