Does anyone else laugh at Sony demise talk?

I own a PS3 and only a PS3, but I can admit that there hasn't been much to brag about with the system. Still, the line-up for this year is incredible and despite the system being expensive, recieving a lot of bad rep and not really having a great game outside of Resistance which is really graphically inferior to anything 360 has right now, it still has sold 3 million units worldwide and is gaining quite a bit of steam.

All this talk about Sony's doom has me laughing. Sony doesn't want the system to sell as well as the Wii right now, they lose money on every PS3 sold! They only need the system to create an install base right now and then, in a year's time when they develop new ways to create it at a lesser cost, they will want it to sell like the PSone and PS2 which combined for over 225 million units sold worldwide.

Does anyone not remember that XBOX only sold 24 million units worldwide, had no Japanese market and cost Microsoft a 4 billion dollar loss? And still, they release the 360 and now it's talked about like the PS2 used to be back in the last generation.

If people think PS3 will fail like a Dreamcast, they need to remember that Sega died due to a string of failures and Sony has had nothing but success. Besides, on its current pace and with the line-up of games it will have for the next 2 years+ and its SCEA published exclusives, not too mention games like MGS4 and NG: Sigma (which are both still exclusive), do you not think that it will sell atleast 30 million units worldwide in the system's lifetime? If Microsoft's gaming division didn't die with only 24 million sales and a $4 billion loss and Nintendo didn't die only selling 20 million Gamecubes worldwide, then I doubt one little bump in the road is going to kill Sony.

Just wanted to give my two cents about that.

Ummmm trust me they want PS3 to sell well right now. Even with the Loss

But yeah anyone who thinks PS3 at a demise or talk about it failing is on crack. I feel the same with the Wii and 360 and DS and PSP really...  

Sony doesn't want the system to sell as well as the Wii right now, they lose money on every PS3 sold! They only need the system to create an install base right now and then, in a year's time when they develop new ways to create it at a lesser cost, they will want it to sell like the PSone and PS2 which combined for over 225 million units sold worldwide.SkyCastleDan

that doesn't make much sense.

Sony wants to get as much market share as soon as possible. Yes, it's marketing to a higher-income audience right now, but it doesn't mean they don't want maximal marketshare.

Sony wants to lose as much money as possible on hardware, because more money lost due to hardware means a greater install base --> a greater install base means more software purchases --> and software purchases recoup hardware production cost losses and determine the profitability of the console.

No, I just laugh at blind fanboys.htekemerald

No, I just laugh at blind fanboys.htekemerald

[QUOTE="htekemerald"]No, I just laugh at blind fanboys.jack_russel

Sony doesn't want the system to sell as well as the Wii right now, they lose money on every PS3 sold! They only need the system to create an install base right now and then, in a year's time when they develop new ways to create it at a lesser cost, they will want it to sell like the PSone and PS2 which combined for over 225 million units sold worldwide.SkyCastleDan

Yeah, that seriously doesn't make any sense whatsoever. Sony loses money on every PS3 MANUFACTURED. When they sell PS3s they simply gain a large portion of the manufacturing costs back. So, do you wager that Sony would be better off with 0 units sold? 

[QUOTE="SkyCastleDan"]Sony doesn't want the system to sell as well as the Wii right now, they lose money on every PS3 sold! They only need the system to create an install base right now and then, in a year's time when they develop new ways to create it at a lesser cost, they will want it to sell like the PSone and PS2 which combined for over 225 million units sold worldwide.fuzzysquash

that doesn't make much sense.

Sony wants to get as much market share as soon as possible. Yes, it's marketing to a higher-income audience right now, but it doesn't mean they don't want maximal marketshare.

Sony wants to lose as much money as possible on hardware, because more money lost due to hardware means a greater install base --> a greater install base means more software purchases --> and software purchases recoup hardware production cost losses and determine the profitability of the console.

Actually, think about it this way.

If it sells the way it currently is: Sony creates an install base that encourages developers to make software for the system. When that software comes out, Sony has found a way to reduce cost per unit and starts to sell the system at a profit. The new software creates more sales for sony, but this time making the company a profit. Plus, there will be greater opportunity for profitable sales because the system didn't sell as much when they were making a loss.

If it sells like the Wii is: Sony gets a bigger install base, but new software still won't come out until the same time if otherwise. They are losing quite a bit of money on each unit sold and in the future, when new software is out, the potential for sales when they are making a profit on the system is reduced because people who have demand for the system already own the system, meaning they lost all profitable opportunity selling the product too quickly...

Do you understand? It's called opportunity cost. What they give up today they get back in the future. Even if they did sell like mad, then they'd need software sales to make up for loses on the system and then they wouldn't make any profit on software costing every bit of potential profit entirely! Not good.....

[QUOTE="SkyCastleDan"]Sony doesn't want the system to sell as well as the Wii right now, they lose money on every PS3 sold! They only need the system to create an install base right now and then, in a year's time when they develop new ways to create it at a lesser cost, they will want it to sell like the PSone and PS2 which combined for over 225 million units sold worldwide.Tristam22

Yeah, that seriously doesn't make any sense whatsoever. Sony loses money on every PS3 MANUFACTURED. When they sell PS3s they simply gain a large portion of the manufacturing costs back. So, do you wager that Sony would be better off with 0 units sold? 

You contradicted yourself in your own post. Yes, they lose money on every system manufactured, but how is that loss generated? The loss is generated by the sale of the system. A company has to spend money to make a product, so you can't say they lose money on production, only on the products final sale. Of course they want to sell all they're current systems, but they've only shipped about 5.5 million or so and have sold 3.1 million overall. Those units can sit on shelves and then Sony won't have to make another shipment for a while meaning they won't have to manufacture any more at the high costs they currently pay now. They can wait till later to manufacture new consoles at a lower cost due to new technology.

Do you understand? If you enroll in business school you, like myself for the last 3 semesters, will learn this simple little fact about the introductory stage of a product's life cycle, especially one like the PS3.

Actually, think about it this way.

If it sells the way it currently is: Sony creates an install base that encourages developers to make software for the system. When that software comes out, Sony has found a way to reduce cost per unit and starts to sell the system at a profit. The new software creates more sales for sony, but this time making the company a profit. Plus, there will be greater opportunity for profitable sales because the system didn't sell as much when they were making a loss.

If it sells like the Wii is: Sony gets a bigger install base, but new software still won't come out until the same time if otherwise. They are losing quite a bit of money on each unit sold and in the future, when new software is out, the potential for sales when they are making a profit on the system is reduced because people who have demand for the system already own the system, meaning they lost all profitable opportunity selling the product too quickly...

Do you understand? It's called opportunity cost. What they give up today they get back in the future. Even if they did sell like mad, then they'd need software sales to make up for loses on the system and then they wouldn't make any profit on software costing every bit of potential profit entirely! Not good.....

SkyCastleDan

Okay, I see what you're saying. But two problems:

First, you've defined opportunity cost incorrectly. Opportunity cost is when I go to the store and buy an apple, I do so at the cost of buying a pear. The way you've employed the concept is incorrect.

Second, while your theory might seem intuitively appealing, it is not how Sony actually strategizes. It will be a long time--perhaps years--before sales of the PS3 console itself will turn profit. Why? Two reasons.

1) The console is very expensive to make as is. It loses Sony $200-300 per unit sold (Merrill Lynch estimate). It will be a long time before they can produce the silicon and other parts at a significantly reduced cost.

2) When production cost goes down, it is in Sony's interest to lower the price. Only three things matter when selling a console: marketshare, marketshare, and marketshare. The majority of profits lie in software, not hardware. That is true for even the Wii. People only buy one console; the buy an undefined amount of games. So Sony's primary interest is getting the console in people's hands. So even if production cost goes down, Sony is unlikely to keep the price high so it can get profits from hardware. Rather, it will drop the price correspondingly to expand the install base. 

The game media bashed PS2 vs. Dreamcast the same as we're seeing now with PS3 vs. 360. The only difference is there's a lot more internet anti-sony chatter. Dreamcast had better graphics than PS2 at launch..... but within a year PS2 was so far ahead of Dreamcast is was sad. We're going to see the same thing with PS3 vs. 360 except MS has the money to keep 360 alive. PS3 is going to definately lose fanbase because of the price.... but as long as the exclusives in the next year turn out good and outclass 360 visually it's going to get at least 60 million sales before PS4.Lazy_Boy88

The PS2 is far more powerful than the Dreamcast and that's not debatable. The difference between the PS3 and 360 however is not as clear-cut. I've read countless articles about how each have their advantages/disadvantages and there's not a big difference between the two at the end of the day, and the games we are seeing out or coming out back that up . You would have to look at a powerful PC with a DX10 card to see a significant difference.

[QUOTE="Tristam22"][QUOTE="SkyCastleDan"]Sony doesn't want the system to sell as well as the Wii right now, they lose money on every PS3 sold! They only need the system to create an install base right now and then, in a year's time when they develop new ways to create it at a lesser cost, they will want it to sell like the PSone and PS2 which combined for over 225 million units sold worldwide.SkyCastleDan

Yeah, that seriously doesn't make any sense whatsoever. Sony loses money on every PS3 MANUFACTURED. When they sell PS3s they simply gain a large portion of the manufacturing costs back. So, do you wager that Sony would be better off with 0 units sold?

You contradicted yourself in your own post. Yes, they lose money on every system manufactured, but how is that loss generated? The loss is generated by the sale of the system. A company has to spend money to make a product, so you can't say they lose money on production, only on the products final sale. Of course they want to sell all they're current systems, but they've only shipped about 5.5 million or so and have sold 3.1 million overall. Those units can sit on shelves and then Sony won't have to make another shipment for a while meaning they won't have to manufacture any more at the high costs they currently pay now. They can wait till later to manufacture new consoles at a lower cost due to new technology.

Do you understand? If you enroll in business school you, like myself for the last 3 semesters, will learn this simple little fact about the introductory stage of a product's life cycle, especially one like the PS3.

And if they wanted to minimize their loss they would want to sell as many PS3s as possible. Besides, like fuzzysquash mentioned, their primary interest is in accumulating a large install base as quickly as possible. Quite frankly, the notion that a company doesn't want to sell its product is laughable, a precious Econ 101 class under your belt or not. 

Only two things it still has going for it is Final Fantasy and Metal Gear Solid... Other than that theres really no reason to get one.black_chewbacca

Well that's not true.

Sony cannot die. They have their hands in completely other industries that are all doing well. Sony could possibly leave the console manufacturing market... but they will never be "doomed."foxhound_fox

This post is factually innaccurate.  Sony is involved in a lot of other markets, but has lost ground in ALL of them over the last decade.  The division specifically responsible for games and the Playstation brand was the only one making any profit for the company as a whole for quite a few years running.  Now, the games division is losing money, too.  Granted, a lot of that is due to the development and marketing costs of the PSP and PS3, but with the PSP not being the huge, runaway success Sony was banking on, and the PS3 not selling as well as they had hoped either, they may have gambled too much.  certainly enough to lose market dominance.  Doomed?  Not yet.  All it would take is one big thing (more than just one game, though), and that could cause them permanent damage as a company.

[QUOTE="Lazy_Boy88"]The game media bashed PS2 vs. Dreamcast the same as we're seeing now with PS3 vs. 360. The only difference is there's a lot more internet anti-sony chatter. Dreamcast had better graphics than PS2 at launch..... but within a year PS2 was so far ahead of Dreamcast is was sad. We're going to see the same thing with PS3 vs. 360 except MS has the money to keep 360 alive. PS3 is going to definately lose fanbase because of the price.... but as long as the exclusives in the next year turn out good and outclass 360 visually it's going to get at least 60 million sales before PS4.tubbyc

The PS2 is far more powerful than the Dreamcast and that's not debatable. The difference between the PS3 and 360 however is not as clear-cut. I've read countless articles about how each have their advantages/disadvantages and there's not a big difference between the two at the end of the day, and the games we are seeing out or coming out back that up . You would have to look at a powerful PC with a DX10 card to see a significant difference.

Well I'm sure people debated it then. PS2 superiority wasn't even visible for a year just like PS3 is looking just equal to 360 now. 360 is just like Dreamcast in that it had PC-like hardware that was easy to develop for so games looked good from the start.... hell it even had more video ram than PS2. PS2 started looking terrible compared to Dreamcast. Now PS3 looks about the same as 360 and they're not even close to fully using the Cell. I'm not saying PS3 is going to have this magical unlockable power... but since devs already have pushed 360 to the limit and PS3 is looking equal to 360 with the first waves of games, if PS2's developement is any indication, PS3 is going to look significantly better than 360 with each new wave of games. Lair is looking to be one of the first... and we haven't really seen anything substantial or final of Killzone2, MGS4, Heavenly Sword, and others.

I think the Cell is going to be the real wildcard in this generation considering what the emotion engine was able to do without a good graphics chip at all, which PS3 does have.

I own a PS3 and only a PS3, but I can admit that there hasn't been much to brag about with the system. Still, the line-up for this year is incredible and despite the system being expensive, recieving a lot of bad rep and not really having a great game outside of Resistance which is really graphically inferior to anything 360 has right now, it still has sold 3 million units worldwide and is gaining quite a bit of steam.

All this talk about Sony's doom has me laughing. Sony doesn't want the system to sell as well as the Wii right now, they lose money on every PS3 sold! They only need the system to create an install base right now and then, in a year's time when they develop new ways to create it at a lesser cost, they will want it to sell like the PSone and PS2 which combined for over 225 million units sold worldwide.

Does anyone not remember that XBOX only sold 24 million units worldwide, had no Japanese market and cost Microsoft a 4 billion dollar loss? And still, they release the 360 and now it's talked about like the PS2 used to be back in the last generation.

If people think PS3 will fail like a Dreamcast, they need to remember that Sega died due to a string of failures and Sony has had nothing but success. Besides, on its current pace and with the line-up of games it will have for the next 2 years+ and its SCEA published exclusives, not too mention games like MGS4 and NG: Sigma (which are both still exclusive), do you not think that it will sell atleast 30 million units worldwide in the system's lifetime? If Microsoft's gaming division didn't die with only 24 million sales and a $4 billion loss and Nintendo didn't die only selling 20 million Gamecubes worldwide, then I doubt one little bump in the road is going to kill Sony.

Just wanted to give my two cents about that.

SkyCastleDan

why did you say still exclusive

was there a rumor about them going multiplat

and i dont know about those games but arent they 1st party anyway? 

I'm confident my PS3 will provide the same quality gaming experience I enjoyed with my PS1/2.tcc024

Good things come to those who wait! In only a few short months this talk will be ending.

[QUOTE="tubbyc"]

[QUOTE="Lazy_Boy88"]The game media bashed PS2 vs. Dreamcast the same as we're seeing now with PS3 vs. 360. The only difference is there's a lot more internet anti-sony chatter. Dreamcast had better graphics than PS2 at launch..... but within a year PS2 was so far ahead of Dreamcast is was sad. We're going to see the same thing with PS3 vs. 360 except MS has the money to keep 360 alive. PS3 is going to definately lose fanbase because of the price.... but as long as the exclusives in the next year turn out good and outclass 360 visually it's going to get at least 60 million sales before PS4.Lazy_Boy88

The PS2 is far more powerful than the Dreamcast and that's not debatable. The difference between the PS3 and 360 however is not as clear-cut. I've read countless articles about how each have their advantages/disadvantages and there's not a big difference between the two at the end of the day, and the games we are seeing out or coming out back that up . You would have to look at a powerful PC with a DX10 card to see a significant difference.

Well I'm sure people debated it then. PS2 superiority wasn't even visible for a year just like PS3 is looking just equal to 360 now. 360 is just like Dreamcast in that it had PC-like hardware that was easy to develop for so games looked good from the start.... hell it even had more video ram than PS2. PS2 started looking terrible compared to Dreamcast. Now PS3 looks about the same as 360 and they're not even close to fully using the Cell. I'm not saying PS3 is going to have this magical unlockable power... but since devs already have pushed 360 to the limit and PS3 is looking equal to 360 with the first waves of games, if PS2's developement is any indication, PS3 is going to look significantly better than 360 with each new wave of games. Lair is looking to be one of the first... and we haven't really seen anything substantial or final of Killzone2, MGS4, Heavenly Sword, and others.

I think the Cell is going to be the real wildcard in this generation considering what the emotion engine was able to do without a good graphics chip at all, which PS3 does have.

I still think there won't be a big difference, and whatever difference there may be, I don't think it will be enough to help a $600 console to go on to sell 60 million. There will be more good games and a price drop eventually, but too little too late I think. Hopefully it will do OK though.

Sony cannot die. They have their hands in completely other industries that are all doing well. Sony could possibly leave the console manufacturing market... but they will never be "doomed."foxhound_fox

[QUOTE="foxhound_fox"]Sony cannot die. They have their hands in completely other industries that are all doing well. Sony could possibly leave the console manufacturing market... but they will never be "doomed."pundog

I would love to see a link for this stupid post. They're movie division, Columbia Pictures and Tristar, have led the boxoffice or have been in the top 3 in cummulative boxoffice intake the last 5 years straight. The Spiderman Franchise, Underworld, Click, Casino Royale...not too mention Sony Pictures has some of the top selling DVDS and of course Blu-Ray discs outselling HD-DVD 9:2 this month. Their music division is hard to say, I don't know much about that.

Besides, you want to get into losese? How about the 4 billion Microsoft lost in total during the XBOX's life. How about the millions they've lost with that Zune thing trying to compete with the IPod?

[QUOTE="SkyCastleDan"]

I own a PS3 and only a PS3, but I can admit that there hasn't been much to brag about with the system. Still, the line-up for this year is incredible and despite the system being expensive, recieving a lot of bad rep and not really having a great game outside of Resistance which is really graphically inferior to anything 360 has right now, it still has sold 3 million units worldwide and is gaining quite a bit of steam.

All this talk about Sony's doom has me laughing. Sony doesn't want the system to sell as well as the Wii right now, they lose money on every PS3 sold! They only need the system to create an install base right now and then, in a year's time when they develop new ways to create it at a lesser cost, they will want it to sell like the PSone and PS2 which combined for over 225 million units sold worldwide.

Does anyone not remember that XBOX only sold 24 million units worldwide, had no Japanese market and cost Microsoft a 4 billion dollar loss? And still, they release the 360 and now it's talked about like the PS2 used to be back in the last generation.

If people think PS3 will fail like a Dreamcast, they need to remember that Sega died due to a string of failures and Sony has had nothing but success. Besides, on its current pace and with the line-up of games it will have for the next 2 years+ and its SCEA published exclusives, not too mention games like MGS4 and NG: Sigma (which are both still exclusive), do you not think that it will sell atleast 30 million units worldwide in the system's lifetime? If Microsoft's gaming division didn't die with only 24 million sales and a $4 billion loss and Nintendo didn't die only selling 20 million Gamecubes worldwide, then I doubt one little bump in the road is going to kill Sony.

Just wanted to give my two cents about that.

Spartan-051

why did you say still exclusive

was there a rumor about them going multiplat

and i dont know about those games but arent they 1st party anyway? 

Dude, where have you been? It's been sick how many posts have been up all over the place that MGS4 was going multiplat till Kojima (sp?) denied that load of BS.

Projected loss from Sony's gaming division this year:  1.7 billion.
Projected profit from Sony as a company overall:  3.4 billion.

The gaming division has cost the company a third of its potential net profits.  No forecasts are putting the PS3 as a money maker for years to come as it is expected the gaming division will continue to bleed money for another year or two, perhaps even longer.

Don't be surprised if Sony cuts support for the PS3 to stop the rampant money loss.

I'm confident my PS3 will provide the same quality gaming experience I enjoyed with my PS1/2.tcc024

in the other hand wii didnt

Projected loss from Sony's gaming division this year:  1.7 billion.
Projected income from Sony as a company overall:  3.4 billion.

The gaming division has cost the company a third of its potential net profits.  No forecasts are putting the PS3 as a money maker for years to come as it is expected the gaming division will continue to bleed money for another year or two, perhaps even longer.

Don't be surprised if Sony cuts support for the PS3 to stop the rampant money loss.

RahnAetas

it was GREEN

/owned.

Projected loss from Sony's gaming division this year:  1.7 billion.
Projected profit from Sony as a company overall:  3.4 billion.

The gaming division has cost the company a third of its potential net profits.  No forecasts are putting the PS3 as a money maker for years to come as it is expected the gaming division will continue to bleed money for another year or two, perhaps even longer.

Don't be surprised if Sony cuts support for the PS3 to stop the rampant money loss.

RahnAetas

I'd like a link please. Though quite honestly, I can see this happening.

[QUOTE="foxhound_fox"]Sony cannot die. They have their hands in completely other industries that are all doing well. Sony could possibly leave the console manufacturing market... but they will never be "doomed."pundog

I'm confident my PS3 will provide the same quality gaming experience I enjoyed with my PS1/2.tcc024

same here!!

Sony as a company is doing well overall.  The gaming division, not so much http://news.bbc.co.uk/1/hi/business/6551591.stm

Check Sony's earning releases for the 1 billion already *confirmed* lost by it's gaming division http://www.sony.net/SonyInfo/IR/financial/fr/index.html

Again, don't be surprised if Sony cuts support for the PS3 if it continues to bleed money and shows no signs of stopping.