PS3 Losses May Top $2 Billion

According to UK technology site vnunet.com, Sony are looking at a total loss of US$2 billion from the cost developing and manufacturing their PS3 hardware. As it currently stands, the company has already lost more than US$1.65 billion.

[TheMART]

OMG

"While this might sound like more doom and gloom for Sony's besotted next-gen system, it should be noted that Sony make significant profit from software, rather than hardware; any refinement of the manufacturing process will also stem these large losses. Of course, this also makes a price reduction in the near future less likely."

No they don't with an attach rate @ launch of 1.5 game per unit... My god. 2 Billion dollars and no income. Not on games, not in online service. Bad business model!!!

[techie]

Dude...the attach rate of 1.5 will begin to change with the entrance of more games in March. I only buy one-two games with my console when I first buy it - in fact I know lots people who just bought the Wii with the Wii-sports included.

Secondly - PS2 software!? they make a hell of a lot out of that 100million installed fan base you know.

[TheMART]

So dude. As you tried to make a smart remark, you're failed and proved my case.

The attach rates history:

PS2/Gamecube 1.9 game average per unit
XBOX 1 had 2.4 game average
XBOX 360 had a massive 4.5 game average per unit @ launch (at this point in time 5.3)

So if the 360 had 4 times the higher attach rate @ launch, it means a couple of things. The 360 had:

1. Better launch games (average review scores on 360 games are over 80%, PS3 games are what 65% or so)

2. 360 users have more to spend or just spend more

So actually you're saying out of all the games that are available for the PS3 (more then the 360 had @ launch) only one or two games are worth it. So waiting untill March? Waiting again? Wii is another story, Nintendo already makes profit only on the unit, not loosing 300 dollars a unit like Sony does...

The 100 million fanbase could be a 50% rebuy. And PS2 users don't buy so many games with the console too bad...

[FirstknighT]

$2 BILLION??????????????? WOOOOOOOOOOOOOOW, that's insane! Talk about having a bad day!

[bung tickler]

how do i appove a story its all grayed out... this has really been pissing me off.

[bilal]

only contributors, moderators and administrators can approve a story...so u first have to become a contributor........

[AuburnTiger]

This happens to Sony every time they release a new system. However, after the 1st year is where they make up they money that was lost. Sony has been stating for the longest that the ps3 is a long term investment and it is a trend that has proven correct for the previous 2 systems. Sometimes you have to take a step back to move forward.

[TheMART]

And sometimes one takes the wrong step.

If I'm right, MS lost 4 billion dollars in total over the XBOX 1 life span. That's 4 billion in like what, 5 years or so. At least they sold games on the thing and XBOX Live came up and brought some money.

The PS3 launch attach rate of games is 1.5 game per unit. Even the PS2 and the gamecube had a higher rate at 1.9 game per unit. The original XBOX had 2.4 games per unit @ launch. The 360 had 4.5 games per unit @ launch. At this point in time it has 5.3 games per unit attach rate. Plus XBOX Live makes money.

The PS3 ain't selling games and don't earn on the online service. Which is free, but also not a premium service like XBL. So tell me. Taking a step back, with the view of above, doesn't seem a good investment, does it

@ True Gamer just below this post

2 billion in what, 2 months time that the PS3 is here, compared to 4 billion in 4 to 5 years of the XBOX 1???

Nice comparing there! You know with every 1 million PS3's sold, Sony looses another 300 million dollars, right? If you want to save Sony, don't buy a PS3, you'll be only bringing them into further problems ;-)

But for real. If they are able to sell let's say 10 million in the coming 1,5 year, they lose another 3 billion freaking dollars. No it's not the same as MS.

MS has billions of dollars laying around at the bank, doing nothing. Sony is in red marks since years already. Sony don't have cash, they just got a multimillion dollar bank loan last year to finance the PS3. They are cutting on shipments of PSP's to get funding for the PS3. TV market share they just lost massive to Samsung, Philips and Panasonic...

I guess you don't see the worrying part of these amounts of money when you say 2 billion dollars is a small fee to establish BR as a format winner. Pushing the BR in the PS3 won't make the movies sell if those people are mostly into gaming. It just isn't. And what if the next gen format is streaming/downloading HD content? Like XBL Movie marketplace? I am enjoying HD movies right here, right now, without any drive that needs to spin...

[True Gamer]

And you don't hear anyone b1tching about that, so why this?

Sony is the number #1 Movie Producer in the World and sold the most t.v's in 2006 in the USA than any other brand.

$2 Billion dollars is a small fee to pay to establish Blu-ray as the next-gen format winner.

[Zinswin]

Mart says (I can't confirm the #'s) that MSFT lost $4B in 5 YEARS over the life of XBOX 1. PS3 has so far cost SONY $2B in less than 3 months.

This is horrific news for SONY, especially when The PS2 was their top $$$ maker. They have been hemorrhaging money in all of their other devisions. Look it up...

[FirstknighT]

The #1 movie producer in the world? Not even close! They have 4 movies in the top 50 grossing films of all time (Spiderman 1,2, MIB, Ghostbusters)

Maybe they should just concentrate on the tv's than since the ps3 is failing!

[True Gamer]

And yes Sony is the #1 movie producer in the world, at least for 2006, look it up!

[joemutt]

I thought DJ said they were making money?

Guess he was wrong.

[gogators]

to be lossed in just a couple months to try and push Blue Ray. If they would have kept Blue Ray out of the PS3 there is no way they would have lost this much money soo quickly. Though you need to invest capital before you make capital, this just seems like a whole lot for company that hasn't been doing very well the year or two. Yeah MS has lost money and now they are in a position to start making a good return on their investment. The MS games division also has the ZUNE, which I can't see ever making money. Man if MS had price drop they could really bury Sony this go around.

[Harry]

Personally I would have opted for HD-DVD.

Let some other company do the BLuray and 2 years down the line design an adaptor that plugs in to your PS3. Now that's business sense. Making money and a Bluray player.

[techie]

Pardon?

[techie]

Why do we care that much how much debt these huge b@st@rd companies are in anyway. We all know Sony isn't going away. You all say they are trying to get Blu-ray to win the format war - yes they are. But don't forget that the game division is one of they're most important earners ever since the ps1. It's their thing and something they hold dearly and very high up there on their earnings - so if anything they want to establish the ps3 in homes.

Sony will make money enough to survive. What are we trying to say, that they will go bankrupt and will no longer be able to ship ps3's or fund game development and every game developer will get scared and stop making ps3 games? and blu-ray movies will not be able to be made....ummm keep guessing.

[Grown Folks Talk]

spider-man 3 will make up for quite a bit if that.

[Funky Town_TX]

I don't care how much $$$ they make. If I get good games then I good. They only people I care about are the factory workers. The big wigs are fine.

[kornbeaner]

They should've put a better GPU in the machine. But 2 billion is alot. But with their movies making the money that they make the company itself is fine. Spider-Man 3 is coming out soon and that alone will make mass amounts of money all over the world and then make more money when it comes out on DVD and Blu-ray. But if they can keep the PS3 floating for 7 years with high-quailty games they'll be fine.

[Eternal E 808]

its funny how the ppl that were talkin crap about microsoft not making money aint here to say the same for sony because the ps3 has only been out for 3 months and they have already lost that much money, i was expecting this from the beginning because the ps3 did not have a ground breaking opening like all these fanboys were expecting,also microsoft is not the one doing the catch up this time around because microsoft has been busy racking up all these games and exclusives that will only help them in the long run unlike sony in the other hand loosing a title every month and only time will tell to see if sony will catch up because microsoft has a great year ahead of them.

[Havince]

LOOK EVERBODY huge cash losses. EVERYONE LOOK.

Its a big deal when its Microsoft but not so here.

Whatever

[kornbeaner]

MS since it's start has never lost 4 billion doing anything. MS has pretty much a monolopy when it come to the PC market and have never lost 4 billion dollar doing anything. Now it doesn't speak much as sonys current losses, but sony as a company have always at some point been low and still manage to be a top of the world. Even though a 4 billion loss over 5 years is just launch money to MS, it was huge cause that from what i know has never happen to them.

[gogators]

including MS, Sony, etc. can be in a position to just bleed money. This just seems like a very heavy investment to be making for the pushing of just one disc format.

[kornbeaner]

But if we had the choice one it would microsoft. This company knows how to make money(A basic Monopoly of the PC OS world and XBL). Sony makes it then takes a wild-risk and somtimes it pay-offs(PS1, PS2, PSP) and somtimes it doesn't(Beta-max, Mini-CD, UMD as a movie format). Outside of Blu-Ray which is the main thing their pushing they are also trying to push Cell. Now if Sony by some big grace can manage to claim the #1 spot this generation 2 billion dollars now is not gonna seem like anything because they would have marketed and succeeded the way they wanted to. It's a risk that I believe could've been taken if they had the games to push out with their PS3 launch but now as is, they, just as we sony fans are waiting and hoping for somthing good to happen.

[FeralPhoenix]

It says Sony has already lost 1.65 billion....thats billion with a capital B, but not to worry, as long as PS3 is successful in the long run it will pay off....but those who laughed at M$ losing 289 million should be very, very quiet now. [ssshhh]

Edit: It's becoming a trend, really PS fans, correction I mean Sonyfanboys always make a big deal about something and then it turns out worse for the PS3.....they said 360 launch was terrible, but by most accounts PS3 was worst, they laughed at M$'s shortages, but PS3's was worst -at least for the first few weeks, but they did actually actually do alot better job over the next month and a half, they said the launch line-up was weak and PS3 games would blow them away, but most PS3 launch games were much worse, I suppose nothing will change, now recently they talk about M$ losing money from the 360(not all due to 360), when anybody with common sense knows that Sony would lose a whole lot more. In fairness it goes both ways, yes I have my share of criticism's but I hope at least, I try not to be a hypocrite. You would think WE ALL would learn our lesson by now and accept that there will be bumps in the road for both consoles, and not jump on the other (un-neccessarily) at the first sign of blood.