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Analyst: Sony Must Sell 30 Games for Every PS3

A report from prestigious British economic publication Financial Times shows how Sony's hardware strategy for the PlayStation 3 is anything but straightforward.

The Financial Times report posits that a weak Yen value may "rescue Sony from an estimated four years of losses on its complex machine" as it sells the high-priced game systems in Europe in early 2007.

The article also claims that Europe is expected to be a "strong market" for the PlayStation 3, citing past successes with the PS2.

According to an analyst quoted in the article, Sony will need to sell roughly 30 games for every PS3 console sold in order to break even on hardware costs, assuming that the company receives a $10 royalty on every PS3 game sold. By the same formula, Sony only had to sell an estimated eight games for every PS2 in order to break even on hardware costs.

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power of Green 3797d ago (Edited 3797d ago )

I try to be as logical as possible but after this artical if Sony doesn't do something big their game branch is finished.

PS2 will have to continue to be on the market to keep Sony's head above water milking console might pay of for Sony.

People will be buying 360 for exclusives and ports and folks will be buying PS3 only for the few exclusives that we know of, can Sony pump out 30 console selling AAA's anytime soon?.

HH-DVD vs Blu-ray could hurt Sony, HD-DVD is quikly getting popular and people will stray from buying PS3 because of the less popular format.

Color(matters) or lack of will hurt Sony bad with Nintendo and Microsoft stealing cartoon/artoon/anime fans from Sony.

30 games per unit, Sony would have trouble doing the impossible even if the Dev's were giving away games, consumers just don't play that many games and often only keep about 10 at any given time (casual gamers which make up the bulk of any fanbase which MS will win over this generation).

DJ3797d ago

Nice one TG. =] Guess you 'accidentally' forgot that hardware costs greatly decrease with time. They're losing $200~300 on day one, but that goes down dramatically. Even the 360 was sold at a $250 loss when it was launched. Sony was losing $200 on every PS2 sold at launch, just for comparison purposes, and some analysts back then said the exact same thing (attributing most of the costs due to the 'unproven' DVD drive).

Either way, Blu-ray's obviously going to win. More market awareness, more industry support, superior tech, and it's popularity is increasing. So that'll help production costs even more. It's kind of funny that the RSX costs more to manufacture than Cell, but I guess that's what happens when you have a two-year gap between initial production schedules.

BrotherSic3797d ago

"However, analysis of the PS3’s high-end – and in some cases unique – components has led some to doubt that Sony can quickly cut production costs in order to reduce losses on the machine in Japan and the US.

CLSA wrote in a recent note to investors that while “it took seven to eight quarters after the launch of the PlayStation2 for Sony to break even, it could take 15-16 quarters for the company to recoup its initial PS3 investment”.

Because the new console has involved significantand PS3-dedicated research investment by many of the component manufacturers, Sony is understood to have less scope to force prices down at its suppliers."

power of Green 3797d ago

" Blu-ray's obviously going to win. More market awareness, more industry support, superior tech, and it's popularity is increasing"

^^^ $1000 dollar DVD players will not win over the Masses nor will a $600 game console's people are renting 360's(the Core) from Rent & Center.

Betta max ect was hot also untill consumers told Hollywood we don't care what you think we should buy.

Superior Tech?" no one's going to care about a few more gigs when they have to pay in some cases $800 more dollars.

PS3n3603797d ago

ask 10 random people on the street what blue ray is and you will hear "Blue what? there is no possible way this format will prevail. It is another umd in the making.

FadeToBlack3797d ago

You can always deped on DJ for damage control lol

calderra3797d ago

Nevermind when the article clearly and explicitly covers and refutes what he tries to say, he'll say it anyway!

Shadow Flare3797d ago

...periferals and microtransactions?

I think this article is just giving an example of how many games would be needed to break even. But think of how many ps3 eyetoys will be sold, especially in europe. Then think of how many microtransactions people will make. These would all certainly help towards breaking even. And yeah, production costs DO go down over the years

MicroGamer3797d ago

And they say 360 having an attach rate of 5.2 is bad news. Sheesh.

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