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PlayStation (Games) The Almighty Buck Businesses Sony

PlayStation 3 to Sell For $399, Going Underground 491

Posted by Zonk
from the money-loss dept.
Merrill Lynch Japan has conducted research that indicates that the PlayStation 3 will retail for $399. According to Gamespot's coverage of the paper, the unit will cost $494 to manufacture. Sony will thus be taking an almost $1 Billion loss in the first year of the PS3's lifespan. From the article: "It is normal for game companies to take a loss on hardware whenever a new console launches, since they typically focus on acquiring market share rather than generating a profit during the first year. During the second year and afterward, they can recover the losses with the savings that come from mass production and with licensing fees from publishers." Meanwhile, Press the Buttons is reporting on a Pro-G article in which SCEE Chief David Reeves states that "I feel proud that E3 went well from the presentations that they did...I feel very happy about that, but I told the troops: OK now we go underground. The PS3 goes underground until it comes out next year."
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PlayStation 3 to Sell For $399, Going Underground

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  • No surprise here (Score:5, Interesting)

    by JonN (895435) * on Thursday June 30, 2005 @09:54AM (#12950243) Homepage
    This isn't quite a surprise, as there has been a loss on consoles ever since the switch from cartridges to the inexpensive discs. The price for a disc at the high amounts they purchase them would probably be under 10 cents/disc. Now when you see that each game is going to be priced at ~$60 [ebgames.com] it is easy to see where the profit is.

    Don't get me wrong, I'm not saying that video games only take a nickle/disc to make, there are so many games out there that fail, even to the point of being fully developed but never shipped, that these companies need to balance the costs.

    • I'm curious -- does anyone know roughly how much of profits from games goes to the console manufacturer? I wouldn't have thought it'd be much because the retailer/game producers/distributers/etc would want their cut first. Would revenue from the games be enough to make up Sony's shortfall?
      • I don't know that any money from the game profits go to the console manufacturer. I believe Sony just charges a licensing fee and provides an SDK to developers that want to create games. The nice thing about this model is Sony gets paid regardless of the success of the game.
    • Re:No surprise here (Score:2, Interesting)

      by Daxx_61 (828017)
      It's exactly like Gillette, when they first released safety razors. They sell the razor itself for almost nothing, and the blades are really expensive. They even give them away - I got one for my birthday from them!
    • You have your economics a bit mixed up here. You're confusing two separate product lines: consoles and game manufacturing. The two have extremely different cost structures.

      The literal manufacturing cost of a game has very little to do with the final price of a title. Using your $.10 a disc model (which isn't that far off actually) it doesn't take into account the content of the disc. When you're spending $10 million to produce a game, you've got to recover your investment somehow. Outside of the royal
    • Re:No surprise here (Score:3, Informative)

      by nitehorse (58425)
      That's actually not really true [actsofgord.com].

      (from the linked page)

      By the time the PlayStation came out in North America 4 months later, a lot
      had changed during the year. RAM had gone from $50US a megabyte to $20. The Yen had gone from 80 yen per US dollar to 110. And Sega had dropped the price of the Saturn to $299. At this point the PlayStation was indeed profitable, and the Saturn was a minor money pit for Sega.

      and:

      In the end, before the first PS2 rolled off the production line for consumers, Sony had s

      • by Belial6 (794905)
        I'm with you. The line that the console manufacturers loose money on each sale is not likely. It amazes me how many people can accept the "creative accounting" done by the MPAA and RIAA to rationalize the price/profit in the movie and music industry, but don't believe that the same goes on in the console industry.

        Really, I understand that the music and gaming parts of Sony are different divisions. But, to think that the Music division of Sony uses smoke and mirrors in their accounting, but the console
      • Re:No surprise here (Score:3, Informative)

        by NanoGator (522640)
        "That's actually not really true."

        I wouldn't look at Acts of Gord for 'truth'. Not only does he mention a blurb in a stock report that he didn't even quote, but he draws an extreme conclusion from it.

        Here are the two basic problems I have with his claim:

        1.) It's a quarterly stock report. Those are MEANT to sound compelling. Since we don't even have the exact quote from the report, we have no way of knowing what type of math Sony was using to impress their stockholders. Also, it's a quarterly report.
  • PS3 for $399 (Score:5, Insightful)

    by Anonymous Coward on Thursday June 30, 2005 @09:54AM (#12950246)
    Unless of course you wait like 3 months until it is $299.
    • Re:PS3 for $399 (Score:5, Interesting)

      by MyLongNickName (822545) on Thursday June 30, 2005 @10:00AM (#12950299) Journal
      Yup. That's what I like about electronics... the "First on the Block" tax. Perfectly voluntary. If it is important enough for you to be the first to have it, then you can pay. If not, then you don't.

      It helps to subsidize electronics for the masses without a convoluted gov't based needs program.
      • Re:PS3 for $399 (Score:5, Interesting)

        by dpilot (134227) on Thursday June 30, 2005 @11:29AM (#12951143) Homepage Journal
        OK, let's play a simplified math game.

        Let's pretend we have a game console, and it's planned competitive lifetime is 4 years. It introduces at $400, and a year later it's available for $300. But really, $400 for a 4 year lifetime means you're "writing down" $100/year. In that case, the early-adopter and the wait-for-the-price-to-drop users have gotten equal value out of the consoles. In fact, the early-adopter may have gotten better value, because his first game is being written down over 4 years instead of 3, so it costs less per year.

        I know it's overly simplified, but there is one point that lasts... The early adopter does fork out the big bux, but he also gets that early usage out of the console, and perhaps more usage than the price waiter. The latter argument has holes too, in that the early adopter probably adopts the next generation early as well, so both get about the same amount of usage. Still, you buy it to use it, and if you buy early, you get to use early. The idea model, from a cost basis, would be to be an early adopter for every other generation, either skipping the in-between generations or getting them really cheap on eBay.

        But if you're strictly on a cost basis, skip the game consoles entirely, and take up real-world activities that also improve your fitness.
        • Re:PS3 for $399 (Score:5, Insightful)

          by xstonedogx (814876) <xstonedogx@gmail.com> on Thursday June 30, 2005 @12:10PM (#12951496)
          That only makes sense if the unit self destructs at the end of that 4 years. Us waiters are perfectly happy to play the unit long after the end of its competitive lifetime. By the time the "price waiters" by the unit, there are more titles, tons of reviews, and everything - games included - costs less money.

          The only positive the early adopter gains is the bragging rights of playing it while it's new and exciting.

          The negatives include higher cost, a possible lack of titles, possible hardware/software failure, and competition in finding the new console. If any of those other negatives co-exist with the higher cost, he may in fact be getting LESS value over those 4 years than someone who buys it a year later, even if they pay the same amount per year.

          For example, if you pay $100/yr, but there are only 20 titles out that first year of which you like 1 or 2, are you really getting the same $100 worth of use out of it?
        • Re:PS3 for $399 (Score:3, Insightful)

          by Zarian (797222)
          No

          If someone doesn't care about getting the new stuff when it's new, then to them, there is no life of the console.

          Does the fun factor of a game change because it's purchased and played a year after the game came out?

          You are forgetting that game prices also drop. And hell if I can get an Xbox for $99 and 20 games for $10 each, that's $300 I just spent and I have 20 games to play and have fun with.

          If I purchased the Xbox when it first came out at $300 and each game when they first came out at $50 a game
  • Ouch! (Score:5, Interesting)

    by DrMrLordX (559371) on Thursday June 30, 2005 @09:56AM (#12950260)
    A $1 billion loss in the first year of production? That's going to hurt a lot, considering how much cash they had to dump to get Cell production ramped up this early. Their ability to mass-produce the processor was supposed to help them keep costs down and let them recoup the investment of building fabs in the first place. So much for the economy of scale.
    • More R&D Coming (Score:3, Informative)

      by JonN (895435) *
      I cannot say I agree with you, however just an fyi; Sony's new CEO Howard Stringer is saying [bignewsnetwork.com] that Sony is going to cut back on other research and development in order to finance more R&D into the two parts of PS3 which is supposed to seperate it from the competition (XB360). No surprise, these two things are: the Cell processor, which will be used not only to power the PlayStation 3 but also many of Sony's electronics, and the much ballyhooed Blu-ray disc, which will be the standard hi-def format for th
    • Losing 1 billion in the first year of a console's introduction is nothing. MS Still loses more than that every year on the XBox.
      • I doubt microsoft loses money on the xbox anymore. The parts inside the xbox and the cost of manufacturing are most likely even, or lower than the MSRP of the xbox.

        Sony will not lose $494 on every PS3 sold forever. Eventually the prices for the parts that go into the PS3 will go downand before the end of PS3 production they will be able to make a profit.
    • If Sony has their way, though, the Cell will find its way into other products. While the Cell's primary intent may have been for the PS3, I'm sure they'll look to more than make up lost dollars with other licensing and such.
  • by Omega697 (586982) on Thursday June 30, 2005 @09:59AM (#12950291)
    With all these consoles coming out in such a spread-out schedule, I wonder if it will be possible for anyone to keep the hype up.
  • How much does that thing cost to make? It feels faaar more expensive than the $250 asking price.

    But yeah (re: hardward discounts), when you have your name on every game, those props comes with a couple bucks, so they do make the initial loss in volume.
  • Meh.. (Score:2, Interesting)

    by kutsu119 (883719)
    Would it be wrong of me to hope that Sony taking this sort of risk backfires and means the playing field is a bit more even this generation?

    I'd love to see what would happen if all 3 companies had 33% market share.. Besides the obvious multi-platform title increase, specific and exclusive games could really swing the buying public.
    • by Fr05t (69968)
      Yes it would, and this isn't the kind of "risk" you think it is. It's the same risk MS took with the XBox, and will with the 360. I'm guessing XBox was your first console right?
    • Re:Meh.. (Score:2, Informative)

      by JonN (895435) *
      It is not really that much of a risk that Sony is taking, as Microsoft is taking nearly the same risk [bignewsnetwork.com]. It is reported that the XB360 will be selling for $299, which still means a ~$75 loss per system for Microsoft.
  • If a silicon manufacture in Japan/Korea/etc sells chips below cost, it's considered "dumping". Folks start yelling for import tarifs and whatnot. The manufacture is generally painted as being "evil".

    How come this is ok?

    Is it because this is a direct consumer product?

    • There are a lot of sony developers in the US. Getting the thingy capable of playing the stuff the developers writes ... think about it.

      Though yeah, it is anti-competitive as it bars newcomers to the field since they can't afford the cut.

      But alas... whatever, we're all gonna work for Taco bell anyways ... ;-)

      Tom
    • by Omega697 (586982) on Thursday June 30, 2005 @10:04AM (#12950351)
      Well first off, they're not just "dumping" it here, they're "dumping" it in Japan too (and anywhere they can sell it). I think dumping has to do with attempting to invade a particular market by offering goods (ones that are extremely similar to others offered on that market, i.e. the PlayStation brand alone is enough to differentiate it) at well below what they are worth. However, just because it costs Sony $494 or whatever to make them, doesn't necessarily mean they are worth that much. They're only worth what people will pay for them, and I'd bet dollars to doughnuts that Sony's going to be asking exactly what they think people will be willing to pay.
    • by parliboy (233658) <parliboy&gmail,com> on Thursday June 30, 2005 @10:11AM (#12950401) Homepage
      Because dumping refers to selling a cost in a foreign market at a cost below a product's home market cost. Here's it's not dumping, simply a loss leader, as the cost is low in all markets. http://www.wto.org/english/tratop_e/adp_e/adp_e.ht m [wto.org]
    • by reporter (666905) on Thursday June 30, 2005 @10:14AM (#12950429) Homepage
      When a company sells a product below cost, such behavior is consistent with free-market principles except in 2 situations: government subsidy or monopoly. When Korean companies like Hynix sell their memory chips at very low prices (or at prices below cost) in the USA, Hynix is receiving financial support from Seoul so that Hynix can afford to sell at a loss or at no profit. Such financial distortions (which are common in Korea) materially impact the American economy because Washington opens the American economy to "free" trade with Korea.

      The other situation that is prohibited is for a monopoly to sell a product at a price below cost in order to destroy the competition. In such situations, the monopoly aims to destroy the competition so that the monopoly can, at a later point in time, dramatically raise the price of the product to reap monopoly profits. Such actions also hurt the American economy.

      Except for these two problems, there is no issue with companies using selling-at-a-loss to gain market share. IBM sells its server hardware at zero profit or at a small loss in order to reap the profits from a service contract. Sony sells its Playstation at a loss in order to reap the profits from software sales. Neither IBM nor Sony is a monopoly. Further, neither IBM nor Sony (unlike Korean companies) are being subsidized by either the American or Japanese governments.

      • "Hynix is receiving financial support from Seoul so that Hynix can afford to sell at a loss or at no profit. Such financial distortions (which are common in Korea) materially impact the American economy because Washington opens the American economy to "free" trade with Korea."

        What absolute rubbish. Your disregard for the facts is astonishing, and you've never taken Economics 101. Which fallacy would you like me correct first?

        Lets start with Hynix recieves financial support from the Korean government. W
  • Weird.. (Score:4, Insightful)

    by seti (74097) on Thursday June 30, 2005 @10:00AM (#12950304) Journal
    Correct me if I'm wrong, but doesn't the loss or profit made on each unit depend initially on the development costs, and then on the actual amount of units produced?

    i.e. if the development costs were a theoretical $1000 and each unit has a cost of $1, making 1000 units will be $2 each, whereas making 2000 will cost $1.50?
    • I'd imagine they're talking about the marginal cost rather than initial outlay, so it's a $1bn loss plus whatever they spent developing it.
    • Moreover (Score:4, Insightful)

      by mcc (14761) <amcclure@purdue.edu> on Thursday June 30, 2005 @10:41AM (#12950648) Homepage
      I saw this link a few days back, and I haven't been able to red the report, but I really think Merill Lynch is kind of looking at some things as unit costs that really ought to be considered to be sunk costs.

      Example: They're assuming $100 the Bluray Disc player. A DVD player would be... what, I dunno, definitely less? Let's make up a random number and guess that they're spending $80 more per unit because they went with Bluray instead of DVD. Except wait a minute. Does it really make sense to lump this in $80 or whatever in with the per unit cost of the PS3? For one thing, this money is subsidizing the portion of Sony's business that's interested in selling Bluray drives and discs, and that's something Sony has a lot of money riding on. For another thing, I'd assume one of the main reasons the BD drives are so expensive is that they are new and unproven technology. But the PS3 manufacturing itself will help to break the technology in. To some extent by spending this money on the BD drives for the PS3 to break in the production lines and all, Sony probably is relieving money that it will have to spend later on manufacturing BD drives for other consumer products. To some extent that $80 per bluray represents a sunk cost that Sony would have had to have paid anyway for other purposes.

      So I question how important these numbers are. If you look at previous Sony Playstations, Sony's been pretty good at the whole thing of bringing down production costs relatively quickly. If they can keep this up they can probably afford to just eat a high production cost since they know their costs are eventually going to come down.
  • by Vonotar82 (859920) on Thursday June 30, 2005 @10:00AM (#12950305)
    Well, I can't say I'm that surprised at the price tag, as all new technology is rather pricey. Will that stop all the random single people from buying one immediately? Not at all. In fact, I'm pretty sure we'll see those self same buyers out on street corners with signs saying "Will max out materia for food".
  • by slusich (684826) * <slusich.gmail@com> on Thursday June 30, 2005 @10:02AM (#12950324)
    Putting the PS3 underground for a year with the 360 coming out in a few months seems like a mistake to me. It would seem they would want as much exposure as possible during this time to keep from being completely overshadowed by Microsoft.
  • WTF?! (Score:4, Funny)

    by LegendOfLink (574790) on Thursday June 30, 2005 @10:03AM (#12950328) Homepage
    The PS3 goes underground until it comes out next year.

    I feel bad for the poor bastard who has to dig the hole to bury all of those units...
  • Pricing (Score:3, Interesting)

    by dannyitc (892023) on Thursday June 30, 2005 @10:04AM (#12950344)
    I wonder if MS and Sony are creeping up on the ceiling price of what consumers are willing to pay for a new console. With an initial price of $400 and games costing $60 apiece, it'll be interesting to see their sales figures for the first few months after launch.

    Also, anyone else think that Nintendo may be a bit more successful at undercutting MS and Sony with MS and Sony both ramping up prices? I would assume that Nintendo will make the Revolution's price point a large issue.

  • From TFA: (Score:5, Funny)

    by Shadow Wrought (586631) <shadow.wroughtNO@SPAMgmail.com> on Thursday June 30, 2005 @10:05AM (#12950354) Homepage Journal
    Sony estimates that the aging console has only completed 10% of its lifespan in Iran. No, seriously. There's a Sony office in Iran.

    I can only imagine how well GTA: San Andreas is doing over there...

  • Dumping (Score:2, Interesting)

    by DarthVeda (569302)
    This sounds a lot like:

    "Dumping [answers.com]: selling goods at less than the normal price, usually as exports in international trade. It may be done by a producer, a group of producers, or a nation. Dumping is usually done to drive competitors off the market and secure a monopoly, or to hinder foreign competition."

    Drive off competitors? Secure a monopoly? Sony? Never!
    • The reason they can do this is that the Playstation is not a useful product by itself, it becomes a useful product when combined with the games for the platform. Thus Sony is selling one part of it at a loss, and recuperating the rest on games.

      This is not uncommon, nor illegal (IANAL). It is used for mobile phone services and digital cable boxes (giving away the hardware and earning money on the subscription), or razors (think Gillette).

      It is also extensively used by others in the Game console industry. F
    • [i]Dumping: selling goods at less than the normal price[/i]

      If the normal price is $399, and the price they're selling at in the USA, Europe, Japan, etc. is all approx. $399, then what makes you think it's dumping?
  • From TFA:

    The press was saying that it was expensive, but it was a huge hit. It's the same thing with the PlayStation Portable from last year. The Game Boy Advance is a same handheld gaming machine, and it costs less than 10 thousand yen ($91). On the other hand, our PSP had cost 25,000 yen ($229). But people lined up overnight to buy it, and it sold out on the day of its launch. It all depends on whether people want it. Of course, I'm confident that the PS3 is a product that people will definitely want.

  • by Orion83 (448477) on Thursday June 30, 2005 @10:08AM (#12950376)
    The hubris of these guys... how many times in history has a $399 game console sold well?

    Oh wait, it's not just a game console "this time"?
    It's an entire entertainment center? A supercomputer too? Gee, in THAT case....

  • by mr_luc (413048) on Thursday June 30, 2005 @10:08AM (#12950384)
    I have to hand it to Sony.

    They really know how to do this "business" thing.

    Microsoft comes to E3 with a console that is looking amazingly polished, down to the extensive new XBox Live features, and with tons and tons of in-engine first looks.

    Sony comes to E3 with a gigantic press event held at their cinema, with 2 simple real-time tech demos, prerendered (although using PS3 hardware) gameplay footage that blows away any other *footage* to date, and a bunch of video clips featuring their spider-man franchise.

    There is no doubt about it -- MS is shipping earlier, MS has a better online infrastructure, and many of MS' games are already playable ...

    But Sony won E3. All anyone wanted to talk about was the KillZone trailer.

    Now, to keep anyone from pointing out that the Emperor has no clothes, they're disappearing. So all anyone will talk about, until they're ready, will be ... the KillZone trailer. Which is not a bad situation to be in, because that trailer was pretty amazing.

    It's absolutely a great idea. For the record, I have nothing against MS, but I'm WARY of them. Anything, even something unfair, that keeps them on their toes is probably a good thing for the rest of the world.

    I won't buy either until they're both out next summer, though, so it's sort of moot.
    • If you think Sony is launching anytime before Christmas 2006 you're dead wrong. Know any US devs with _beta_ hardware? I sure don't. Japan before June, US in October.
  • If they decide to take a $1 Billion dollar loss they should make sure this time no extra finances will have to go into system recalls, fixes etc.

    I have a strange feeling that two giants may fall hard from a war this huge.
  • I just think it's too bad that SEGA isn't around anymore in the console market.
    With more constructor on the market : more concurence and thus even better prices and more efforts to put out something inventive.
    Too bad they never learned to do good marketing to better sell their products. They did have some quite descent consoles in the past (IMHO: Genesis/MegaDrive and DreamCast were good, not to mention the fantastic hack-ability of the latter. Saturn would have been ok too, if only more titles have been tr
  • Um? (Score:5, Insightful)

    by oGMo (379) on Thursday June 30, 2005 @10:10AM (#12950397)

    People seem to be taking this for gospel, when both numbers are analyst estimates.

    Of course, retailing for $399 on lauch is probable: in Japan, the PS2 retailed for about this. When it came here, it went for... $299. The PS1 retailed for $599. When it came here, it went for... $299.

    So let's wait for a real number from someone with a clue, as opposed to an analyst.

    • Yeah, like most of the time we have misleading headlines and article.

      Most analysts thought there was no way the the PSP would be less than $350-500 when it came out. Analysts are the people who were saying "Apple should become a software company" in 1996. Anaylists are the people who saw "significant upside" in Pets.com and Webvan. More recently, Merrill Lynch [who issued this report] paid $35 million in penalties for their involvement in the Enron scandal.

      Also, the "go underground" thing was in reference
  • Ahem!!! (Score:5, Interesting)

    by alvinrod (889928) on Thursday June 30, 2005 @10:12AM (#12950410)
    From article:

    It is normal for game companies to take a loss on hardware whenever a new console launches, since they typically focus on acquiring market share rather than generating a profit during the first year. During the second year and afterward, they can recover the losses with the savings that come from mass production and with licensing fees from publishers.

    Nintendo will probably launch the Revolution somewhere between $200 and $300 and still manage to make a profit on every console they sell. A while back there was an excellent article on /. that explained how Nintendo's business model was different from Sony and Microsft, and that even though they came in third place against the Xbox and PS3, they were still the most profitable.

    For Sony to release a console after Microsoft and for a higher price could cause problems for them like the article stated. Microsoft has deep enough pockets to launch the console at around $350 when it comes out and cut it down to $300 when the PS3 launches. They'd be taking some huge hits in the pocketbook, but it would probably get more people to buy Xbox 360's.

    However, as illustrated with the PSP, some people will buy something no matter how much it costs just because they want it. Sony is really going to need to count on its fan base to help out a lot.

    • A while back there was an excellent article on /. that explained how Nintendo's business model was different from Sony and Microsft, and that even though they came in third place against the Xbox and PS3, they were still the most profitable.

      I think the major reason for Nintendo needing to have an entirely different business model than Sony and MS, comes from the fact that Sony and MS create, research, develop, etc... a lot more consumer electronics, software, and participate in so many different markets m
    • by alexhmit01 (104757) on Thursday June 30, 2005 @10:29AM (#12950571)
      What was smart about Nintendo, is instead of joining the fray and getting bashed by Sony and Microsoft (three companies in cutthroat competition means profits drop considerably...) Microsoft didn't make any money, and Sony didn't mint money the way they did with the Playstation.

      Nintendo took their limited Monopolies (Mario, Metroid, Zelda, Pokemon, etc.) and pushed them into that market. They made money along the way, kept their costs down, and sold most of their own titles. Sony/MS make something like $8/game on third-party games. Nintendo makes considerably more per game.

      Even if customers bought fewer games/console, Nintendo probably made more per customer, and wasn't trying to recover a $100/customer acquisition cost.

      Sony ONLY makes money on its fan base. A recreational player that buys a few sports games each year will never pay Sony enough in its fees to cover the $100 Sony spent subsidizing their hardware.

      HOWEVER, in this case, Sony has another advantage. Getting the PS3 out means getting Blu-Ray DVD players into millions of homes. When the HD-DVD crew comes out with their $1000 HD-DVD players, and Apple and Sony have moved their Blu-Ray DVD machines (including Apple machines that will no doubt let you burn HD Blu-Ray DVDs of your kid's little league game), this might be the first time that the superior technology wins DESPITE being backed by BOTH Apple and Sony... :) I loved Blu-Ray, and was saddened to see adoption by Apple, because I feared that it would go like Firewire/iLink that Apple/Sony managed to kill through poor technology marketing (they both rock at consumer marketing, but technology marketing is NOT their strong point). Note, I am typing this from my Powerbook. :)

      Alex
  • Since Merril Lynch owns Sony [sd68.bc.ca] and all... they'd know what Sony plans to charge for things...

    Right?
  • by xiando (770382) on Thursday June 30, 2005 @10:16AM (#12950445) Homepage Journal
    Gilette did it with razors.
    The printer corps do it with printers.

    1. Sell some product which addicts you to something cheap.
    2. People must buy more of your razor-blades, printer-ink, games/controllers,
    3. ???
    4. Piles of profit.


    Anyone know a Playstation owner will spend at least ten times what the console cost on other things.
    • Anyone know a Playstation owner will spend at least ten times what the console cost on other things

      Maybe some playstation owners do. I doubt I've spent even the cost of the console since I bought it. I paid for one extra controller and a memory card, and I have about a half dozen games, only one of which cost me more than $20. I know quite a few other playstation owners who are the same way. One of my best friends has a PS2 that only gets used for the three Grand Theft Auto games. Everything else he
  • by AvantLegion (595806) on Thursday June 30, 2005 @10:18AM (#12950468) Journal
    Microsoft has already confirmed that they're targeting the $299 price point, and have said that it will definitely be "in the neighborhood of $300" (translation: definitely shooting for $299 but not yet ready to commit to it).

    Not only is that $100 less, but by the time the PS3 launches, the Xbox 360 will be out long enough to cut its price. It could conceivably go down to $250-275.

    For the casual gamer that isn't necessarily married to the Sony brand label, the 360 price point will certainly look much more attractive. To the slightly more technical buyer, one would note that the PS3 price doesn't even include the damn hard drive (sold separately!), while the 360 does.

    I don't see a really good "win" scenario for Sony here. If they do price competitively with the Xbox 360, then they'll be taking losses per unit that blow away the losses MS was taking with the original Xbox (and those were crazy enough that MS built their new console with keeping losses in control - and apparently have succeeded).

    There's still plenty of Sony faithful that want their Final Fantasys and Metal Gears, but Sony could stand to lose a huge share of the massive casual fan base that made them the #1 console seller this past gen.

    (This post was written by a decidedly non MS cheerleader - he likes Ubuntu, Gentoo, and Apple)

  • by moankey (142715) on Thursday June 30, 2005 @10:20AM (#12950493)
    Isnt this the same company that laughed at M$ when they came out with Xbox with the same model of losing money on the hardware and making it up with games?
    Seems even though Sony claims Xbox has not hurt their sales and is not a threat, taking up this give away the razors and make money on the blades approach says otherwise.
  • Worth It For HD (Score:4, Interesting)

    by DeadBugs (546475) on Thursday June 30, 2005 @10:26AM (#12950538) Homepage
    If Sony comes to the market with the first High Definition DVD player in it's PS3, $399 would be a steal of a deal.

    My first DVD player was $300, I can only imagine what the first HD-DVD players will cost.

    Maybe they will even bundle a 1080p version of Spider-Man 2 to with it.
  • Press the Buttons is reporting on a Pro-G article in which SCEE Chief David Reeves states that... ...what??

    corrected:

    Pro-G is reporting SCEE Chief David Reeves states that...
  • by Namarrgon (105036) on Thursday June 30, 2005 @10:30AM (#12950581) Homepage
    The original Xbox was late to the party, oversized, had weird controllers, was technically advanced, and cost way more to make than it sold for. The sleek PS2 wasn't, and didn't.

    This time round, looks like it's Sony coming out second with the advanced yet fridge-sized beast & freakshow controllers, and it's going to really cost them a bundle, while the Xbox 360 seems to taking it more carefully...

    I'm guessing that Nintendo will stay right where they were before though.

  • All that they have to do to recoup that billion is get their own PlayStation VISA, which will be approved to all applicants. You can pay for the PS/3 for 48 low monthly payments of $24.95 at only 27% interest! Hey, it certainly beats having to pay $399 + tax all at once, doesn't it?

    Yes, that's partially sarcasm, but don't underestimate those who want it now and are willing to pay more over time with a manageable monthly payment. After all, look at how many people have store cards at 24% interest inste
  • by Naikrovek (667) <jjohnson&psg,com> on Thursday June 30, 2005 @10:48AM (#12950726)
    if the gave it away for free they'd have near 100% market share.. ah maybe its just me that thinks so. can anyone hear me? is this thing EVEN ON?!
  • by Ceallach (24667) on Thursday June 30, 2005 @10:54AM (#12950781) Homepage
    Most consoles have NEVER been sold at a loss, and the PS2 made OODLES of profit from day one (enough to recoup the R&D costs within a year).

    The Sega Saturn was sold at a loss and failed. The Xbox was sold at a loss but M$ could afford it. We'll see if the PS3 actually gets sold at a loss or not.

    Don't believe me? The numbers and such are available if you search, or just read the Gord's little article ... http://www.actsofgord.com/Proclamations/chapter02. html [actsofgord.com]
    • The PS1 cost me $299 and the Saturn cost me $399. Both were bought in the US on the first day.

      I took both apart. Although the Saturn did look more expensive (mostly unnecessarily, due to how it was put together with several boards instead of the PS1's one), I'd be shocked if it couldn't be built and shipped to the US for $399.

      I took apart my first gen US PS2 ($299?), and I have to say that was probably on the fence. There was a huge cooling solution and a couple sandwiched boards in there, and DVD drives
  • by SetupWeasel (54062) on Thursday June 30, 2005 @11:29AM (#12951139) Homepage
    Expect a launch like the PSP:

    March 2006 in Japan with 100,000 units. ("We launched on time!")

    November 2006 in the US with a million units ("We are focusing on the PSP")

    And Summer 2009 in Europe, proscuting anyone who tries to import one.

That does not compute.

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