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PS4 development costs eats into PlayStation profit

Sony said this figure was reached by a mixture of slowing hardware sales and an uptake in software. Unit sales of PS3, PSP, and PS2 hardware all fell

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golding891028d ago (Edited 1028d ago )

Well..What did you guys expect? Sony is sell PS4 for 399 with such good specs just to outsell Xbox one?

I understand they are trying to outdo
MS but we all know they are eating the cost badly....

Hope they don't have to sell more buildings.

ShugaCane1028d ago

There are going to sell the PS4 for $399 because they realized that overpricing their consoles is not the right move. They certainly wish to outdo MS but I think their main concern is not the reiterate the mistakes they've done with the PS3.

golding891028d ago (Edited 1028d ago )

lol yea 600 bucks ps3 was crazy. They did learn their lesson

Need4Game1027d ago

"PS4 development costs eats into PlayStation profit"

Perhaps The PS4 console simple design isn't costing playstation profit.

Maybe PS4 games costing playstation Profit.

Probably Not a bad trade-off, more Games for PS4.

shivvy241027d ago

yep selling a ps3 for $1000 in australia was insane ! i got mine when they rolled in the 40Gb model for $689

GameNameFame1027d ago

Sony will be bringing out great games, software and hardware.

Good for gamers then. It's better than MS's common strategy of cheaply buying timed exclusive. Or investing on kinect and casual crap.

SuperLupe1027d ago (Edited 1027d ago )

If Sony not had lost around 50 million customers to the Xbox 360 moving from the PS2 era to this gen they would not have come out with a 399$ PS4.

I'm pretty sure they still can't believe how this gen turned out. PS2 like success was the minimum they were expecting. At the end of the day it took them 6/7 years to catch up with the 360. They were vexed by MS and to a lesser extent Ninty and are now out there to get revenge. They're like "enough playing now, we gonna see who's the boss around here".

They arent taking any gambles this time around: no overcomplex and overhyped CELL chip, no ludicrous price, no overconfidence. Just a simple powerful console for just the right price ... you can't go wrong with that. Sounds like the Xbox 360 of next gen :)

mouzone1026d ago

@golding89

yeah it was but when you consider that at the time the cheapest blue ray player was about 800 bucks it is kinda understandable

blitz06231026d ago (Edited 1026d ago )

They aren't trying to outdo MS. Do you really think they changed the price to $399 after hearing MS at E3? They already said they had decided the price even before Microsoft announced the Xbox One price. Without Kinect the X1 would be about $399 as well. Sony was smart to not force the camera issue

nukeitall1026d ago

Sony could have matched MS at $500 while throwing in a camera, and made a bigger profit.

You can claim Sony is doing it for the good of gamers, and to some a better business decision. However, to me, Sony way under priced the PS4 relative to what the market would have payed.

This will hit Sony's bottom line, and again less investment back into the division. A very profitable division and healthy competition is the way to go.

gaffyh1026d ago (Edited 1026d ago )

@nuke - That would have been the most stupid decision, because if they are priced the same, and they BOTH had cameras, it would come down to who had put the most resources into making camera-based games, in which case MS would have won because they have more casual titles. Cutting the camera and launching $100 cheaper is a genius move by Sony, and the fact is they decided the price way in advance.

I will never understand why people always say "it should have launched at $499", it COULD have, but you're getting the console $100 cheaper! Be happy about it.

Second thing is, how will it cut into their bottom line? How do you know that they aren't making a profit on each console sold? Granted that's a stretch, but I'd bet that at a maximum, they are making a loss of $100 (although I've got a feeling they aren't making much of a loss at all), which will easily be offset by 2 or 3 games, and early adopters always buy the most games in the long run. The PS4 development costs mentioned is the R&D that goes into making the actual system and manufacturing the system in advance of launch. Once the console launches, they will make that money back in no time.

Loki861026d ago

@blitz they said they removed the camera and lowered the price directly because of the backlash from the public of the X1 pricing.

gaffyh1026d ago (Edited 1026d ago )

@Loki - No they didn't. Jack Tretton said on the GT interview that they had decided the price weeks in advance, and I think Pachter had a chat with one of the execs who said they were watching MS conference and were hoping they were not priced at $399, because Sony couldn't go down to $349.

LordNikon1026d ago

I don't remember them saying anything like that. The PS4 would've been cheaper no matter what... even if the camera was included, but... from the get-go Sony was always offering consumers a choice. Hence why the PS camera is an OPTIONAL DEVICE.

wishingW3L1026d ago (Edited 1026d ago )

PlayStation consoles has never been overpriced, PS2 and PS3 were sold at a loss you know... They were badly planned though. The PS2 was successful with the DvD and it sold tons of games but the PS3 had blu-ray and it didn't became successful until the slim and price cut.

Overpriced would be the $250 Wii, 3DS at $250 and the $350 Wii U.

+ Show (11) more repliesLast reply 1026d ago
Chaostar1028d ago (Edited 1027d ago )

"I understand they are trying to outdo
MS but we all know they are eating the cost badly"

Do we? There hasn't been any info leaked to suggest what kind of profit/loss either console will be making per unit. This is an assumption on your part.

edit @nicknacktack: No, but making negative assumptions based on nothing is. Since you joined less than a day ago and your only two comments are in this article, one of which is also spouting misinformation about Sony's business, it's safe to be suspicious of your agenda.

nicknacktack1028d ago

Wow.. every little criticism of sony is Trolling?

Come on man..

nicknacktack1027d ago

@Chaostar When you joined 27 Mar 2010..was everyone suspicious of your agenda on your first 2 comments?

Smh.. idiot.. get a life.

Chaostar1027d ago

aaaaaand out come the personal attacks, bravo, you'll fit in well here.

I didn't troll or spread fud with my first comments so... no.

s8anicslayer1026d ago (Edited 1026d ago )

He joined three days ago and he lost 2 bubbles already? I can't imagine why...lol

awesomeperson1026d ago

@nick

Generally, people don't have a problem with those joining recently. However, in the past few months there are many, many accounts joined very recently, all which seem to spurt off the same type of comment.

It's the start of a new console gen, which inevitably leads to new console arguments - hence, there is reason to be suspicious of new accounts joining, especially when they comment in a biased fashion.

That being said, golding89's comments do tend to reflect a strong bias towards Xbox, take a look at his comments from his profile and see for yourself.

I'm not saying that's a bad thing, I'm inclined towards Playstation, as that's the brand I currently use the most. It is when people go in articles and say the same thing over and over that gets to the level of trolling, and is really just an annoyance.

British_Knight1026d ago

Nevertheless, one thing is certain, PS4 has to be a huge success for Sony. Microsoft, on the other hand, is made of cash (check Forbes). Hopefully, Microsoft continues to invest their vast resources into XB1. The Yankees bought a slew of championships by outspending their competitors. Microsoft probably could do the same if they wanted to, but XBOX is a marginal percentage of MS revenue.

+ Show (3) more repliesLast reply 1026d ago
nicknacktack1028d ago

I think it's safe to say the only thing keeping sony in the market is the PS brand. Because all their other product are crazy overpriced..from laptops/tvs..etc

I guess they are trying not to make that mistake with ps4.

Muffins12231027d ago

Their music and movies are doing pretty good and the new xperia's also doing well.

jukins1026d ago

Sony products are not overpriced they are totally inline with all the competitors. Even in the past when they were a premium brand price was inline with other premium manufacturers. Some products may be expensive but overpriced is a stretch.

dredgewalker1026d ago

It's not overpricing, new hardware costs a lot to develop. The PS3 was priced high in the beginning because of the cost of the bluray drive and other new components. They even sold PS3's at a loss. The PS3's gamble with bluray payed off and the PS4 is reaping the benefits.

rainslacker1026d ago

Their financial division also pulls in a tidy sum. Sony is pretty diverse. They even make chemicals...although I think they offloaded that part of the business because it wasn't profitable. Can't remember if that's right or not, and looking up facts would be lost on someone like you.

+ Show (1) more replyLast reply 1026d ago
GribbleGrunger1027d ago (Edited 1027d ago )

Just business as usual for the launch of a new console. There's nothing here.

gedden71026d ago

Ummm Nintendo doesn't do that lmao and THEY MAKE THE MOST MONEY! LMAO

MoveTheGlow1026d ago

Yeah. R&D is a necessary expense.

@gedden7, I get it, but Nintendo *does* spend a lot on R&D. They develop their next console as soon as the current one releases - sometimes before that. The WiiU was an idea from way back, but it cost way too much money until it was too late. This time around, R&D didn't hit them hard, since they had this "war chest" of money they made off of casual gamers with the original Wii. Now, the WiiU sales are finally biting them.

R&D was definitely misguided with the WiiU (to say nothing of their dumb marketing decisions, including the name), hence why they consolidated their handheld and home console R&D departments. I'm guessing they put the handheld director in charge.

Muffins12231027d ago

Even at $399 sony has said that they still make profit on the console

Thatguy-3101027d ago (Edited 1027d ago )

Well after reading the article it clearly just stated how their profits could have been higher than 30 million but the didn't because of the research and development that went into the ps4. If I'm not mistaken sony will be profiting from each PS4 sold.

Minato-Namikaze1026d ago

I think you are misunderstanding whats happening. PS4 R&D ate into the PS profits It has nothing to do with how much they are selling it for. All companies take a hit when R&D starts up for a console. Sony made a profit last quarter.

gedden71026d ago

23 Disagrees for telling the truth????

What this gamer said IS 100% TRUE... SONY did have to SELL property JUST TO MAKE A PROFIT. THAT IS TRUE...

SONY HAS ALWAYS BEEN ABOUT TECH AND OUTDOING MS IN THAT DEPARTMENT.

I know the truth hurts but damn people OPEN YOUR EYES, Stop being a fanboy and BE OBJECTIVE..

British_Knight1026d ago

Sony did sell property due to their financial problems.

HiddenMission1026d ago

Actually making a profit off of the sell was not the motivation Kaz wanted to get rid of excess spending and resources that were not needed and if they made money off of the deal even better.

Sony has been about hardware way before MS even considered entering the hardware game so competing with them was not their intention...competing in general was.

Since Sony is a top end hardware company their goal is to produce top end quality product and it's that simple.

You are the one coming off fanboyish and I hate using that term but your not being objective you're painting a anti Sony agenda picture and nothing more.

rainslacker1026d ago

"SONY HAS ALWAYS BEEN ABOUT TECH AND OUTDOING MS IN THAT DEPARTMENT"

Always huh? Sony's been around for over 65 years. Longer than MS has been around. I have to give Sony some credit for seeing so far into the future that they knew they'd have to go up against MS one day. MS was barely on Sony's(or many others I might add) radar until the 360 came out. The first Xbox never got close to the popularity of the PS2. It was that arrogance that cost Sony a lot this gen, but they did their thing, and still came out ahead of MS.

Now I could agree with that they are going head to head against MS for this past gen, and going into the next gen, but I don't think it's about outdoing MS, I think it's about them doing what they always have with the PS brand. That's to deliver a quality gaming machine. Competition has pushed both companies to be better, and no one should have a problem with that.

medman1026d ago (Edited 1026d ago )

golding89...just another intellectually challenged and perpetually confused individual who thinks when a corporation rapes him that means they love him. Good luck with that. PS4.

LordNikon1026d ago (Edited 1026d ago )

Sorry, double post.

GraveLord1026d ago

You are delusional. Research and Development takes money. This literally has nothing to do with how much PS4 will cost at retail. NOTHING.

This is about DEVELOPMENT costs.

Bubble down for you.

3-4-51026d ago

News Flash !

Having to pay workers cuts into profits.

+ Show (9) more repliesLast reply 1026d ago
ShugaCane1028d ago

They're spending a lot to provide the best next gen console possible. Now I hope gamers are going to take that into consideration and buy the PS4 in masses, so that Sony can support it as long as possible.

golding891028d ago (Edited 1028d ago )

@ShugaCane hope so

wishingW3L1028d ago (Edited 1028d ago )

PS4's not even out yet, so of-course... Like if you open a new store you invested in the stuff you're gonna sell and the rent of the place etc., you first need to start selling to recoup it. -__-

FrigidDARKNESS1027d ago

Well an industry report says that Sony were taking the hit on the 8gb GDDR5. Sony back tracks from a statement made that they will not sell the ps4 at a loss.
http://www.eurogamer.net/ar...

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