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Sony expects to immediately recoup PS4 hardware loss

A typical customer purchasing a PlayStation Plus subscription and one launch title will make the PlayStation 4 hardware profitable for Sony.

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Sony expects to be able to immediately make up the loss it will incur when selling PlayStation 4 hardware, the company has said to Eurogamer.

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Sony Japan executive Masayasu Ito said the loss, as Sony will sell the PlayStation 4 to customers for less than it costs to manufacture, will be recovered with typical users buying a subscription to PlayStation Plus and at least one launch title.

Eurogamer adds that Sony expects to make a $60 loss on each PlayStation 4 sold for $399, but Ito would not confirm the exact figure.

Ito also added that the losses Sony will make from selling PlayStation 4's will be less than the company incurred selling the PlayStation 3 at launch.

In August, Sony executive Andrew House said the PlayStation 4 "will not generate anything like the losses we did for the PlayStation 3."

One of the reasons Sony expects to save money is in its decision to use off-the-shelf computer parts. The PlayStation 4 features an APU developed with AMD, featuring an 8-core 64-bit processor and a custom Radeon GPU.

The PlayStation 4 will launch on November 15 in North America for $399, and on November 29 in Europe for €399/£349.

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Ganon316

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Sony is taking a $60 cut to make the price look prettier? Thank you company! That's an extra Playstation 4 game while still being $40 cheaper than the Xbox One. Being your average consumer who cares about saving money, this is a nice incentive.

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Javier

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@Ganon316 Its called "dumping".

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Flames03

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Yea looks like the PS3 all over again.I just wonder if the PS4 will loss over 5 billion like the PS3 did?.Xbox One on the other hand will make profit day one without selling xbox live to do so.Yea looks like we already have a winner just like this gen.While the PS3 has lost over 5 billion the Xbox 360 has made billions this gen in profit.Wow 5 billion loss on the PS3,2 billion loss on the PS Vita and now the PS4 will lose money unless you buy PS plus to play online.Yea things are not good for the Playstaion brand

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LucentWolf

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@Flames03 Lol.

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Sl4cka

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@Flames03 Hmm... get an xbone so a massive corporation can make a profit out of my hard earned cash, or get a ps4 and a few games for the same amount? Yeah, that's a really tough choice there.

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TristanPR77

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@Flames03 on current gen, PS3 surpassed xbox worldwide and Xbox is currently on last place. Second, PS4 have more demand than the xbone so it will easily made up for those losses. Oh and not that the information is not official is just an unidentifiedsource say ing that.

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Ganon316

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@Flames03 Honestly I think they'll both do fairly well. The PS4 is going to be a hundred dollars cheaper. The PS3 did bad last generation because it was so expensive. Now Microsoft is taking that route in hopes that their fan base will still buy them. A hundred dollars is a lot of money to a lot of people. For Christmas Shoppers, I'm sure a lot of people are going to probably want 1 PS4 and a couple extra games instead of an Xbox One and only 1 game for the same price. Sony has done just about everything right for next generation. Heck, Microsoft switched a lot of their policies to imitate what the Playstation is doing. And also, Yea is spelled Yeah. When you're spewing numbers and statistics, please sound like you at least have an IQ.

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northArrow

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Sony didn't get my money this gen, as the initial $600 asking price turned me off and I got hooked on the 360. Rest assured though, the PS4 will get my money next gen, as it's clearly offering the superior gaming experience for a reasonable price.

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Hellhound30x

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Well they got my money for having such a clear message, and not backtracking on everything, unlike another certain console out there....

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berserker66666

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Meanwhile at Microscam HQ.........

"We want to rip you off"

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lubbalots

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$399+60=$459. So an addition of Kinect actually cost $50! Sony fanbois tout free online on PS. I doubt Sony will make any money.

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XbotDestroyer

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@lubbalots enjoy your $500.00 cable box kid..

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lubbalots

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Edited By lubbalots

@XbotDestroyer @lubbalots I sure will dad ;)

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neowarrior121

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it's sad really if we all bought ps3's than 360's, sony probably would've given multiplayer for free on the ps4.

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bunchanumbers

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@neowarrior121 or they would have went bankrupt. At one point Sony was selling the ps3 at a 300$ loss. If they sold even 50 million consoles at that loss rate it would have cost sony 15 billion dollars. They really didn't think the ps3 through.

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Tech-head

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@bunchanumbers @neowarrior121

But in that scenario where everyone who bought a 360, buys a PS3, now you are talking about all the 360 3rd party game sales going to Sony.

Software is where console manufacturers make most of their money. Only Nintendo actually profits off the console itself, really.

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Megavideogamer

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I've paid for my PS4 and 2 launch games. So Sony has made a small profit from me. The PS4 is in a much better position than when Sony launched the PS3. Which is why Sony took a huge bath last time. Now Sony has gotten back on track. The PS4 could quickly make it's money back for Sony.

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streamline

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Is "huge bath" an industry term? How did that saying come about or was that a typo?

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SirNormanislost

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@streamline well it still works

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fanirama

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The PS2 did awesome. The PS3 did fine (although I'm not sure 100% I think they might've managed to eke out a small profit or break even for PS3 by now)

Now, If they were to stop being greedy with the PS Vita and PS Vita Memory prices, they have a winner which can get them a LOT of money. Make the PS Vita another $25 cheaper and reduce memory card price as well (32GB = $44.99 max) and then watch as the sales SOAR!

With more install base will come more developers/games and with more games will come more install base etc. Basically, the PS2 model of success.

It is time for those in charge in Sony to take their head out of their asses fully. It has come out a bit with PS4 but not enough.

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SirNormanislost

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@fanirama there's a new cheaper vita coming and they are dropping the price of memory cards at the same time so we shall see soon how well that works

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Monsterkillah

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Sonny will survive

with their maturity and experience they will outpaced the X1 sales easily

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lubbalots

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@Monsterkillah I will hire you for game analyst.

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mattcake

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Isn't that a weird thing to admit to? That we as the consumer are basically getting less value for money. "yay".

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Kalbent

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@mattcake I really hate that word consumer. Locusts are consumers. Cattle are consumers. I've been a part of the business development at a big name company and it's long been the biggest prank to call the general public this: mindless feeders.

You are not mindless. You are a customer. Just... some people are lazy and won't use the muscle in between their ears and lets TV make their choices.

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gf61

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@Kalbent @mattcake Eating is consumption, using toilet paper as well. Companies want you to consume their product. Animals consume as well.

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Sevont

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Edited By Sevont

@mattcake I'm confused....If we are spending 399, on something that costs them 459, then aren't consumers getting something more valuable than the money we spent on it?

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WheelerJared

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@mattcake I think they might be trying to reinsure their investors.

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gilldominic

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@WheelerJared @mattcake Indeed, it's a sign of the times that they have been much less ambitious and taken a much lower risk path with the consoles for this generation.

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bunchanumbers

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Sony lost 6 billion on the ps3. I wonder how much they'll lose on the ps4? 4 billion? 2 billion? Either way they need to rethink their strategies or they will be out of the console business.

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untouchables111

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U haven't been around gaming long enough with that comment. If someone looses 6 billion and doesn't kick the bucket than they are here to stay. Sony has done everything right for ps4 and that includes not losing Billions like ps3. I mean someone smacked all of them and then told them to consider everything wrong with the ps3 platform. And this far they have righted every wrong that plagued ps3.

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bunchanumbers

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Edited By bunchanumbers

@untouchables111 Oh it wasn't just the 6 billion lost on the ps3. They also lost a lot of money on the vita and the psp. They also sold their Tokyo and US headquarters as well. Its not like they are all shiny and happy times. Its all banking on if the ps4 will make money. And the 6 billion lost on the ps3 really did hurt them.

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bunchanumbers

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Edited By bunchanumbers

@PhoenixArisal @bunchanumbers @Master_Overlord @WheelerJared Nintendo is doing better. They already have over 33 million 3DSs sold and have already sold over 106 million 3DS games. And the majority of those are first party games. Sony can't say that about their Vita or their PSP.

While Wii U sales are slowly increasing their 3DS sales are keeping them afloat. Sony can't say that about the ps3 and vita. Nintendo never lost 6 billion on a console either. Nintendo more or less has been profitable even during their darkest days.

You are right though. You can't put Nintendo and Sony in the same league. Nintendo would destroy them profit wise.

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PhoenixArisal

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@bunchanumbers @PhoenixArisal @Master_Overlord @WheelerJared You are comparing cats and dogs, here. First of all, Super Mario Bros is a kids/classic Nintendo game, which is basically the sole purpose of buying a WiiU. Of course the people who buy the WiiU will also buy new Super Mario. However, The Last Of Us is not Sony's only horse to bet on.

Honestly, I don't even care about Sony, but to try to compare Nintendo with Sony and Microsoft is a ridiculous thought. Nintendo is barely even able to sell it's consoles at this point, while the titans of gaming, such as Sony and Microsoft are selling out of all the preorders they allow (Sony more-so, admittedly). You yourself stated that with only 4% of their console owners buying TLOU, they sold about 1.5X as many copies as WiiU's NSMBU sold with 59% of their console owners buying it (Your numbers). The reason Sony and MS sell so many more consoles is there is a lot more diversity in their games. Nintendo has generally the same fan-base, while Sony has varied fan-bases. This would account for the difference in percentages.

I like Nintendo, and everything, but they are not even in the same league as Sony at this point. Don't try to pretend that they are doing better.

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bunchanumbers

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@PhoenixArisal @bunchanumbers @Master_Overlord @WheelerJared According to wiki NSMBU has sold 2.15 million copies and TLOU has sold 3.4 million copies. Its not that far off. 59% attach rate vs 4% for TLOU. As sales of the Wii U increases the numbers will change but in the end their first party games outsell Sonys. The highest selling Sony game of all time is a Gran Turismo game that sold 15 million copies.

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PhoenixArisal

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@bunchanumbers @Master_Overlord @WheelerJared That's because WiiU hardly has any games. Of course most people will buy the same ones.

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bunchanumbers

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@Master_Overlord @bunchanumbers @WheelerJared ? by all means. 59% of all Wii U owners own NSMBU. I doubt that there is any Sony first party game that has that attach rate. Hell almost all of nintendos games have at least a 12-15% attach rate. Games like Mario Kart Wii has sold 30+million copies. Nintendo knows their hardware and know how to make games for it. Sony doesn't do that with their first party games even though they are the guys that built the hardware.

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Master_Overlord

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@bunchanumbers @WheelerJared Oh so you wana talk about Nintendo now? Okay lets looks at Wii U...

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bunchanumbers

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@WheelerJared their first party games don't sell on the scale that nintendo does. Because of that their profits aren't as big. Look at TLOU it isn't even owned by 10% of all PS3 owners. There's some other numbers too if you want to see more.

http://www.destructoid.com/blogs/The+Bowels+of+Trogdor/sony-is-flirting-with-death-and-death-is-showing-interest-261402.phtml

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untouchables111

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When does losing A billion not hurt? Lol. All those changes are simple cause and effect. The fact is Sony is ready for ps4. And they already know how many units they have sold on orders they are just not telling. Because u know who will follow suit and try to beat what they say. I will say look at the posting about then pushing for 5 million units by March!!!! That's 6 months. That's nearly 840, 000 units a month

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WheelerJared

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Edited By WheelerJared

@bunchanumbers @untouchables111

Sony doesn't only make gaming platforms. SCEA is a huge electronics company. Even if the playstation is losing money, it doesn't mean sony as a whole is. Also, playstation makes a lot of money through first party games. The ps3 didn't actually lose that much money. It made a lot of revenue from the large community buying games.

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strongmokus

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@bunchanumbers They lost $200-300 per console with PS3. From what I know with the PS2 they lost $180 per unit. So the $60 loss with PS4 it is not that dangerous, unless the new console will fail because they still have to recoup research and development expenses.

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gilldominic

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This is why I think that this generation MAY be shorter than the last.

They have produced consoles at the low-end of the performance range that you would expect. They are profitable almost from day one, which compares very differently to the 360 (which took a few years) or the PS3 (which took over half the life-cycle).

I believe that these consoles will age faster for this reason.

Of course, the real question is whether console gaming will exist the same way it does now in 5 years time, or whether the device we want then will be notably different beyond purely the CPU, GPU and RAM....

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