PS Vita 3G Just Costs Sony $159 to make; Sony Selling At Massive Profit?

[QUOTE="jonathant5"]Clearly most people here have never taken a business course or knows how they work. Sure the materials cost $160, but you have to factor in labor costs, as well as the costs of managing the supply chain (so delivery of materials, shipping, etc), and they also have advertising costs, and R&D. They have to include the R&D costs in the price, so they probably either amortize it over the life time of the product, or they estimate how many units they will sell within the products liftime, and assign he R&D costs that way. Either way, I am sure that the Vita costs way more than $160, just like how the 3DS cost more than 130 ( i think that was its BoM)Eponique

Why would anyone buy the 3G model anyway? But yes they are selling it at a prfit, if they weren't they would have pulled it from the shelves by now. People who think otherwise are just stupid and don't know how business works.

ShadowMoses900

Sony consumer products head Kaz Hirai said that the company expects to begin making a profit on the hardware within three years.

http://andriasang.com/comw7e/vita_loss/

This is good news, it means the Vita can easily get a price cut. :)tagyhag

Why would anyone buy the 3G model anyway? But yes they are selling it at a prfit, if they weren't they would have pulled it from the shelves by now. People who think otherwise are just stupid and don't know how business works.

ShadowMoses900

No, companies dont necessarily sell a product that makes them a profit on Day 1. They (oversimplified) make an NPV analysis predicting how much money they will make in each year that the product it sold. They discount those cash flows back and if the project has a positive NPV they will take it on (slightly oversimplified) but point being, a project can have negative cash flows for the first say 3 years, and have positive ones for the rest of its life. Anyway, clearly you are the one who is an idiot and how does not know how business works. Man, whenever I come on to SW (or even GS in general), I realize how so many people here are uneducated and only have an HS degree and either have a community college degree, or the are in a CC now.

I really wouldn't call that a massive profit, especially when compared to the 20$ it costs to make the 3ds

You are wrong about what is included in the cost. Yes companies, overtime, make money on the software and the licensing fees, but that does not mean that R&D costs should not be included as part of the system. Furthermore, you ignored the costs of the supply chain for the company (getting it to retailers, getting raw materials to factory, and etc). Realize that product cost!=material cost. Here is a link to educate yourself cuz clearly you dont know much about how businesses work

http://www.youtube.com/watch?v=Mi1QBxVjZAwjonathant5

That's irrelevant. We're talking about if the Vita gives a profit per unit, which they clearly do, not if Sony is not making a profit on the Vita overall, which they clearly aren't because no one is buying Vita to begin with.

If the Vita was selling at 3DS levels, it would have taken up the costs of employees, R&D, cost of factories, distribution etc. easily, and still leave some money. Software sales can also pay those costs.

Cost of production precludes getting the raw materials. These things are mass produced in the hundred thousands, no way does it cost Sony any more than $10 per unit. I included "profit to retailers" in getting it to retailers/shipping.

..its called trying to make a profit

[QUOTE="tagyhag"]This is good news, it means the Vita can easily get a price cut. :)yoshi_64

so $109 for the wifi model?PSP107

[QUOTE="PSP107"]so $109 for the wifi model?Nonstop-Madness

considering shipments and etc its probably not 159 all together

Remember how we were all crying foul at Nintendo selling the 3DS for $250, at what was clearly a massive profit? Well apparently, the Vita is very cheap for Sony to make too.

Apparently, the 3G version of PS Vita just causes Sony $159 to make. Considering that Sony will be selling this system for $300, you can imagine the massive profits they must be turning on the thing.

I remember how the cows jumped on the hate bandwagon against the 3DS last year, calling it 'overpriced.' Will they do the same for their precious PS Vita too?

SOURCE

Well, at least we know now that there'll be a price cut later. At the rate the Vita has been selling, heavens know that it needs one to avoid being completely dead by this point in timenext year.

crippled_ram

[QUOTE="crippled_ram"]

Remember how we were all crying foul at Nintendo selling the 3DS for $250, at what was clearly a massive profit? Well apparently, the Vita is very cheap for Sony to make too.

Apparently, the 3G version of PS Vita just causes Sony $159 to make. Considering that Sony will be selling this system for $300, you can imagine the massive profits they must be turning on the thing.

I remember how the cows jumped on the hate bandwagon against the 3DS last year, calling it 'overpriced.' Will they do the same for their precious PS Vita too?

SOURCE

Well, at least we know now that there'll be a price cut later. At the rate the Vita has been selling, heavens know that it needs one to avoid being completely dead by this point in timenext year.

White_Dreams

exactly

[QUOTE="crippled_ram"]

Remember how we were all crying foul at Nintendo selling the 3DS for $250, at what was clearly a massive profit? Well apparently, the Vita is very cheap for Sony to make too.

Apparently, the 3G version of PS Vita just causes Sony $159 to make. Considering that Sony will be selling this system for $300, you can imagine the massive profits they must be turning on the thing.

I remember how the cows jumped on the hate bandwagon against the 3DS last year, calling it 'overpriced.' Will they do the same for their precious PS Vita too?

SOURCE

Well, at least we know now that there'll be a price cut later. At the rate the Vita has been selling, heavens know that it needs one to avoid being completely dead by this point in timenext year.

Wow that's cheap. Good thing, because it sounds like a hefty price cut will be needed soon.

Just because it costs Sony less than $250 to make a PS Vita doesn't mean they're selling it for massive profit.

It's time to realize that PS Vitas don't just come off the assembly line, and right into your hands.

But I may be asking too much considering how naive many members here are about every single subject.

So basically the whole "Sony is doomed" thing will finally be over considering they are making a huge profit margin with Vita and it will probably sell more in the States and Europe than Japan. They are also making a huge profit on the SD cards as well as the games, etc...

Sony selling it at a loss

Debunked

http://andriasang.com/comw7e/vita_loss/

phonemug

[QUOTE="crippled_ram"]

Remember how we were all crying foul at Nintendo selling the 3DS for $250, at what was clearly a massive profit? Well apparently, the Vita is very cheap for Sony to make too.

Apparently, the 3G version of PS Vita just causes Sony $159 to make. Considering that Sony will be selling this system for $300, you can imagine the massive profits they must be turning on the thing.

I remember how the cows jumped on the hate bandwagon against the 3DS last year, calling it 'overpriced.' Will they do the same for their precious PS Vita too?

SOURCE

Well, at least we know now that there'll be a price cut later. At the rate the Vita has been selling, heavens know that it needs one to avoid being completely dead by this point in timenext year.

White_Dreams

Sony selling it at a loss

Debunked

http://andriasang.com/comw7e/vita_loss/

phonemug

Sony selling it at a loss

Debunked

http://andriasang.com/comw7e/vita_loss/

phonemug

[QUOTE="ShuichiChamp24"]

Right now Ninty is selling at a loss with the 3DS. Your right though on everything else.GunSmith1_basic

the 3DS was selling at a loss for a while but not any more.

as for the Vita Kaz said it was selling at a loss. The cost of materials is not the total cost, and I'm skeptical that the cost of materials is actually that low

Ya I know this about the PS Vita, but I'm curious about how you know 3DS is no longer selling at a loss? Link?

[QUOTE="ShadowMoses900"]

Why would anyone buy the 3G model anyway? But yes they are selling it at a prfit, if they weren't they would have pulled it from the shelves by now. People who think otherwise are just stupid and don't know how business works.

CanYouDiglt

Sony consumer products head Kaz Hirai said that the company expects to begin making a profit on the hardware within three years.

http://andriasang.com/comw7e/vita_loss/

Sony selling it at a loss

Debunked

http://andriasang.com/comw7e/vita_loss/

phonemug

It was stated that it would take them 3 years to begin making a profit. It's likely that they account for R&D costs/costs of employees/,arketing/etc to do with the Vita. The link TC posted stipulates that they will be making a profit on the hardware, not in terms of what they're making overall.

[QUOTE="White_Dreams"]

[QUOTE="crippled_ram"]

Remember how we were all crying foul at Nintendo selling the 3DS for $250, at what was clearly a massive profit? Well apparently, the Vita is very cheap for Sony to make too.

Apparently, the 3G version of PS Vita just causes Sony $159 to make. Considering that Sony will be selling this system for $300, you can imagine the massive profits they must be turning on the thing.

I remember how the cows jumped on the hate bandwagon against the 3DS last year, calling it 'overpriced.' Will they do the same for their precious PS Vita too?

SOURCE

Well, at least we know now that there'll be a price cut later. At the rate the Vita has been selling, heavens know that it needs one to avoid being completely dead by this point in timenext year.

XenogearsMaster

And do you think a store is going to give the Vita shelf space for free?

[QUOTE="XenogearsMaster"][QUOTE="White_Dreams"]But we're going to forget about the price to manufacture, package and ship the console? We're just going to talk about the price of the parts, do you not realise how idiotic this stance is?

SW__Troll

And do you think a store is going to give the Vita shelf space for free?

[QUOTE="SW__Troll"]

[QUOTE="XenogearsMaster"] Probably over $30. They are still making a huge profit.XenogearsMaster

And do you think a store is going to give the Vita shelf space for free?

Is that a no, or a yes?

[QUOTE="CanYouDiglt"][QUOTE="XenogearsMaster"] LOL, it's making a profit. Don't get butthurt by this news.XenogearsMaster

[QUOTE="XenogearsMaster"][QUOTE="SW__Troll"]

And do you think a store is going to give the Vita shelf space for free?

SW__Troll

Is that a no, or a yes?

[QUOTE="White_Dreams"]

[QUOTE="crippled_ram"]

Remember how we were all crying foul at Nintendo selling the 3DS for $250, at what was clearly a massive profit? Well apparently, the Vita is very cheap for Sony to make too.

Apparently, the 3G version of PS Vita just causes Sony $159 to make. Considering that Sony will be selling this system for $300, you can imagine the massive profits they must be turning on the thing.

I remember how the cows jumped on the hate bandwagon against the 3DS last year, calling it 'overpriced.' Will they do the same for their precious PS Vita too?

SOURCE

Well, at least we know now that there'll be a price cut later. At the rate the Vita has been selling, heavens know that it needs one to avoid being completely dead by this point in timenext year.

XenogearsMaster

Maybe, and even if they aren't making it on the vita, the overpriced memoryy card will help a lot, good news because they can have a big price drop.

[QUOTE="CanYouDiglt"][QUOTE="XenogearsMaster"] LOL, it's making a profit. Don't get butthurt by this news.XenogearsMaster

When has Sony sold a new major console at a profit initially? Never. The Vita is being sold at a loss, like the PS1, PS2, PSP and PS3.

[QUOTE="XenogearsMaster"][QUOTE="CanYouDiglt"]Have a link from Sony saying this? I have one from Sony saying the opposite.CanYouDiglt

[QUOTE="XenogearsMaster"][QUOTE="CanYouDiglt"]Have a link from Sony saying this? I have one from Sony saying the opposite.PillyChickle

When has Sony sold a new major console at a profit initially? Never. The Vita is being sold at a loss, like the PS1, PS2, PSP and PS3.

[QUOTE="SW__Troll"]

[QUOTE="XenogearsMaster"] I know damage control is kicking in.XenogearsMaster

Is that a no, or a yes?

So you think a place like Best Buy just puts products on the shelf for free?

And then when they sell the product they just send all the money that was paid straight to the manufacturer?

You've literally never, in your life, heard the phrase "cost of shelf space"?

[QUOTE="CanYouDiglt"][QUOTE="XenogearsMaster"] LOL, strategy and marketing usually changes instantly. You don't know their business plans and with this new information, we can assess that Vita is making a huge profit margin.XenogearsMaster

[QUOTE="PillyChickle"]

[QUOTE="XenogearsMaster"] LOL, strategy and marketing usually changes instantly. You don't know their business plans and with this new information, we can assess that Vita is making a huge profit margin.XenogearsMaster

When has Sony sold a new major console at a profit initially? Never. The Vita is being sold at a loss, like the PS1, PS2, PSP and PS3.

What do you mean? If you're being serious, that is. ;)

[QUOTE="XenogearsMaster"][QUOTE="SW__Troll"]

Is that a no, or a yes?

SW__Troll

So you think a place like Best Buy just puts products on the shelf for free?

And then when they sell the product they just send all the money that was paid straight to the manufacturer?

You've literally never, in your life, heard the phrase "cost of shelf space"?

[QUOTE="SW__Troll"]

[QUOTE="XenogearsMaster"] If you actually have a link to whatever you are talking about otherwise, it's really damage control.XenogearsMaster

So you think a place like Best Buy just puts products on the shelf for free?

And then when they sell the product they just send all the money that was paid straight to the manufacturer?

You've literally never, in your life, heard the phrase "cost of shelf space"?

So you've never heard that phrase.

You must be really young.

Is it payback for the damage control 3ds users had when it was 250 and only cost 101 in partsp4s2p0

If you want a cake you need to buy the right ingredients. You also need to mix the ingredients together and bake them - that only comes with extra investment. ;)

[QUOTE="XenogearsMaster"][QUOTE="PillyChickle"]

When has Sony sold a new major console at a profit initially? Never. The Vita is being sold at a loss, like the PS1, PS2, PSP and PS3.

PillyChickle

What do you mean? If you're being serious, that is. ;)

[QUOTE="XenogearsMaster"][QUOTE="CanYouDiglt"]We can assess nothing because we do not know all the other expenses needed for the Vita from shipping, licenses, takes, ect. You are making a assumption off of parts alone when Kaz Hirai even says 3 years till profit. You do not even know how much Sony is actually paying for the parts since it is a 3rd party giving the amount.CanYouDiglt

[QUOTE="PillyChickle"]

[QUOTE="XenogearsMaster"] LOL, damage control again.XenogearsMaster

What do you mean? If you're being serious, that is. ;)

I think the evidence lies with the opposite, actually. Looking at Sony's history of console launches you'll find that they were all sold at a loss, and that their strategy was always to regain the losses with peripherals and software - particularly the memory cards. Looking at the fact that Sony didn't equip the Vita with any internal storage capacity of any kind, and that memory cards are sold seperately at an extortionate price, do you really think the Vita is profitable as it is now? Coupled with the fact that Kaz Hirai himself last year stated that Sony expects to be making a profit on every PSV unit sold in around three years time. If you're right, then he's obviously lying. Why? I don't know. All I know is the idea of Sony making a profit on the Vita right now doesn't add up one bit.

[QUOTE="XenogearsMaster"][QUOTE="PillyChickle"]

What do you mean? If you're being serious, that is. ;)

PillyChickle

I think the evidence lies with the opposite, actually. Looking at Sony's history of console launches you'll find that they were all sold at a loss, and that their strategy was always to regain the losses with peripherals and software - particularly the memory cards. Looking at the fact that Sony didn't equip the Vita with any internal storage capacity of any kind, and that memory cards are sold seperately at an extortionate price, do you really think the Vita is profitable as it is now? Coupled with the fact that Kaz Hirai himself last year stated that Sony expects to be making a profit on every PSV unit sold in around three years time. If you're right, then he's obviously lying. Why? I don't know. All I know is the idea of Sony making a profit on the Vita right now doesn't add up one bit.