Reported $60 PS4 hardware loss will be recovered at launch via PS Plus subs & launch titles

PlayStation 4 is expected to make a loss at launch, Sony has confirmed, but the company hopes to regain some of the outgoings via the new paid PS Plus requirement for online gaming. Launch titles are also hoped to stem the loss.

[Bundi]

I wish them good luck! There have been far too many studios and publishes going out of business lately and any success story the gaming world is fantastic.

[black0o]

they'll be fine if they keep it at this rate
and gaming industry is doing fine .. GTA just hit the sky 800+ millions within 24H

[Bundi]

there's a reason why grand theft autos success is such a big news, it is because it stands out, it isn't the norm.

Just have a look at the financial woes of Capcom and Nintendo, also Square Enix seem to be feeling the pinch.

heck Sony themselves have had financial troubles and not just overall but the PlayStation brand specific, examples include PlayStation Vita and the fact that the PlayStation 3 although profitable per unit sold right now has yet to recoup all the losses it made from day one.

[black0o]

^^ capcom lost it touch they are making sh#$y titles
look at capcom 10 years ago
RE series were way better stronger
DMC series as well ..etc

and for SE they dont want our money
FFv13 announcement was 6 years ago and it moved to next gen and fans were bagging for it
KH series skipped the 7th gen tho the fans were bagging for it as well
parasite EVE skipped the 6th/7th gen
and FF series well u know FF13 happened ''which did well'' 7 millions
but they had to make 13-2 and soon RL

it's a management problems with those companies not the gaming world

[Niv]

Ps4 is worth $460

Xbone without Kinect eye is worth ?? $350

[Gekko36]

@Niv What a load of bollocks! You have no basis for that and since the kinect is integral to the system, your comment comes off as total drivel.

[Nekroo91]

what a load of bollocks?! if the X1 used the ps4 hardware + kinect it would cost arround 600. it was their choice weaker specs to make the console affordable and kinect

[Gekko36]

Yes total Bollocks. We are talking about the cost of components, which you have no idea how much they cost or where they were sourced let alone how much assembly cost and I'm not even going to go into either R & D or logistical planning.

Unless you can produce a shipping manifest for components to the factory your comments are "head in clouds thinking".

Both companies keep that info locked up tighter than a ducks arse so how can you just throw figures out there and expect anyone to agree with you?

Think before you open your mouth.

Step one: Engage brain

Step two: Consider what you're about to say before you say it

Step three: Speak / Type

[rainslacker]

Kinect isn't really integral to the system anymore though is it? Since the reversal, MS only showed that it is just a optional peripheral like the first Kinect, although they initially said otherwise.

[Salooh]

That's bullshit. They are selling with profit + the ps+ money. That's how companies work these days. They don't care about bringing the best tech . They make decisions based on profit not evolve . That's why ps4 is cheap because that's what people want for now but they don't think about the future. That's why if i were them i would create 600$ console to really use the tech instead of waiting another 7 years to use the new tech which will be old when these years pass .

This is not hate for the ps4. This is a fact. X1 is worst.

[Gekko36]

@14Feb-R Again, total head in the cloud view point.

Stop sniffing glue and have a word with yourself!

[Salooh]

What do you mean ?. :)
All i'm saying people/sony chose present instead of future and that's a bad thing in my opinion since the life cycle of these consoles are 10 years old.

I'm expecting PS5 after 5 years not 7 for that reason. Developers will max the ps4 in 2 years. Then we will get better games by small tweaks with different visions with understanding of hardware. faster + easy development = max power faster.

It's not future proof. Just look at the pc's for next year. DDR4 coming soon. Existing graphics cards and cpus already surpass the ps4 tech so imagine after 5 years from now. Ps4 will be nothing. The only advantage it have from pc is the ram but will eventually come to pc .

[Death]

Nothing is future proof. Consoles are/were dedicated to gaming only. You get more out of less. GDDR5 coming to PC? Not in the form you are thinking. GDDR5 is very bad for CPU calculations which is why DDR4 is coming and we have never seen GDDR5 for system memory. The combo chip in both consoles makes it so they have only one type of ram to pool from. Sony went with faster graphics memory and wants the GPU to do some CPU tasks to help due to latency. According to Cerny they will use the GOU for audio computes too. Microsoft went with CPU memory when they chose DDR3. Great for everything but the GPU which is why they went with the complex eSram and flash ram. Different solutions to a common problem.

[DoesUs]

That's a much better scenario from where they were at the PS3 launch....

In a year or so i think they'll get to the break even point on the hardware alone, 2/3 years start making profit. Given the price of GDDR5 and the fact Sony will no doubt be the biggest single customer of modules, they should be getting a good discount which will continue for the next 7/8 years, so i think the price of these should drop rather quickly. And they're right about the PS+ adoption rate, i think the vast majority will also be purchasing at launch.

So far Sony are making all the right calls.

[bahabeast]

dnt companies usually sell at loss for the first year or soo till the components get cheaper or something? i think they will be ok the ps3 sold at a 200 dollar loss of somewhere close. controllers, games, psn cards, digital downloads, camera are all stuff they will profit from and dnt forget pen multiplayer is now priced soo they will be fine.

[Jihaad_cpt]

usually costs are held in the R&D and the production start up costs but economies of scale usually kick in a year or so as production costs come down. I'm not sure why people think Sony would lie, why would they?

[rainslacker]

That's been the common trend since the PS1 generation. Not really sure about before that. Consoles were quite costly before that actually.

In business class it's called the razor blade model. Sell the razor at a loss, make money on the blades. It works if the software attach rate is high enough, or there is some other subsidy to offset the cost, such as a subscription model.

Eventually costs come down, and every system sold makes a profit.

[Marius_Titus]

Enjoy that price advantage while it lasts.
http://www.mcvuk.com/news/r...

[Kayant]

"The strategy will continue which is that we're looking to be break even or low margin at worst on [Xbox One] and then make money selling additional games, the Xbox Live service and other capabilities on top,” he told the Citi Global Technology Conference, as reported by Gamesindustry.

Breaking even is not making a profit & we don't know how low that margin is. So like Sony they're planning on making money elsewhere because that's where the most money comes from (services/games).

Both consoles will probably not drop in price anytime soon if they sell well this year/next year.

[MasterCornholio]

Unless Microsoft kills kinect I don't see that price advantage going away anytime soon.

Nexus 7 2013

[nevin1]

So they should be profitable faster than they did with PS3.

If we go by Sony saying they hope to sell 5 million PS4s by March 2014, than most likely of those 5 million, the majority will have

1. 2-3 games(they get more if bought digital)

2. Signs up to PSN+

3. Buys Digital content(avatars, movies, tv, music etc.)

4. Buys accessories

5. DLC

6. Gaikai(I don't think it will be free)

[Hicken]

So far, it seems unconfirmed by Sony. If it IS true, though, it's good news for Sony, as they'll no doubt be making a profit day 1 with people picking up PS+ and Killzone, or Drive Club, or Knack, or any number of other titles.

Actually, I should say AND any number of other titles, as it seems like folks plan to pick up at least two games at launch for PS4.

So, either way, no worries for Sony.

[Godlovesgamers]

Well that's good, right Hicken? I'm sorry why do you care exactly? You have some stock in the company, right?

[Hicken]

Maybe because things like losses per unit have an effect on the company, overall, and can thus have an affect on what the PlayStation division is able to produce.

And that, dear child, is something I should care about, as a gamer. Shouldn't you?

[Godlovesgamers]

Dear Child?? Yeah, you must think everyone here is a child with the way you push your half-truths, lies and faux logic.

You're a consumer, plain and simple. You buy the product and it ends there, you don't worry about stock prices or unit sales. You're not a board member, stockholder or any part of the financial dealings of Sony.

If you seriously worry for a corporation that you're not a part of then it's probably time to take a step back and get back in touch with reality.

Speaking of reality...

How are those "few dozen novels (36-ish?)in varying states of completion" coming along? LOL, in seriousness though, I laughed aloud when I read that the other day. As always, you're so full of beans.

[Ulf]

Now it all makes sense. You can't have a console for too cheap, without somebody suffering. They want to sell 5M PS4s by March, too... that's $60 x 5M == $300M lost by March. Ouch.

I have some faith that early adopters will buy PS+... but then again, they probably already have it, don't they? Throwing launch titles profit at this seems like a bad idea, since those titles will only be significantly profitable for about 3 months...

Is the cost to build PS4s going to drop after that? I'm thinking no. It'll be at least 2 years.

[xKugo]

That's a really low hardware loss when looking at the overall spech sheet of the PS4. They'll more than make up up for that lost with PS+ Plus and game downloads.

[Godlovesgamers]

I don't believe any of that crap. Anyone who is in business is in it to make a profit, a $60 loss on what they estimate to be 3-5 million units sold within the first fiscal quarter of it's launch?

Something smells funny...smells like B.S.

[Hicken]

See, many, many manufacturers of consoles sell their consoles at a loss at the start. The Wii U is- or was- being sold at about the same level of loss per unit. The PS3 and 360 were both taking losses at launch, and I think everything but the GameCube sold for a loss last generation.

These companies usually make their money back on the software side, which is why attachment rate is important. See, business in the gaming industry is a little different than business in other areas, and selling products at a loss is just part of how the gaming industry works.

[rainslacker]

Wii U was sold at a loss. Nintendo stated they made their money back after one game sale, for the most part. PS1 was sold at a loss, and can't find the link but believe 3 game license fees made the money back. Saturn, PS2, PS3(Big loss), Dreamcast, Xbox, 360, all sold at a loss. Think the only console in the past few gens that wasn't sold at a loss was the first Wii, and probably Nintendo handhelds. Think the Vita is reported to be sold at profit.

[Pancit_Canton]

That's not bad at all. Considering PS3 production loss is $120 per unit when it first came out in the market. Blu-ray and other components are finally paying off. Sony cut down the losses in half.