Sony Finally Turning a Profit On PS3s

When the PS3 launched in 2006, estimates pegged the price of producing the consoles to be as much as $250 more than the price at which they were sold. Production costs have dropped since then, but there have been several price cuts as well. Now, almost four years later, Sony Worldwide Studios president Shuhei Yoshida says they're finally turning a profit on the hardware. "This year is the first time that we are able to cover the cost of the PlayStation 3,' Yoshida said. 'We aren't making huge money from hardware, but we aren't bleeding like we used to.' In May, Sony began shipping new PlayStation 3 consoles with smaller and more cost-effective graphics chips. Now, Yoshida said, Sony is looking at replenishing retail stock that has been running on empty since January rather than cutting the price. 'When we bring the cost of hardware down, we are looking at opportunities to adjust prices if we believe that will increase demand,' he explained. 'At the moment, we are trying to catch up our production.'"

Why cut prices?

[CaptainNerdCave]

Why not return the features that were removed? Why not add more features? I was going to buy a PS3, but scrapped those plans when several things went out the window. How many other people are like me?

A cheaper turd is still a turd.

Re:Why cut prices?

[GrumblyStuff]

Features such as PS2 backward compatibility. I'd mention Linux but, frankly, the backward compatibility is the big one.

Funny that they don't mention dropping hardware for PS2 games. Wikipedia says they don't even emulate anymore. Guess that saves them some time and money too.

Re:Nintendo says...

[GrumblyStuff]

I was thinking more in terms of home console (profits from base system) vs home console (profits from base system). You know, Wii vs PS3. Yes, yes, they're not direct as in beer competitors Coors and Bud (in that they're selling the same piss flavored shit) but they are still aiming for the same function so there's a pretty big overlap of markets.

Also, PS3 is getting its own motion controller. Different products are becoming not as different.

Re:Why cut prices?

[Totenglocke]

My thoughts on the PS2 compatibility? I think that it's a simple software feature that they removed once they saw that there was still demand for new PS2 consoles. Once they reach a point where no one wants to buy PS2 consoles anymore, I have a feeling that they'll push an update that adds PS2 compatibility (seeing as there's no reason it can't do it since the PS3 will play PSX games).

Re:Why cut prices?

[Troed]

This earlier post [slashdot.org] in this same thread corrects you.

(My european PS3 does indeed have hardware to do PS2 emulation)

Re:Has the console arms race ended for now?

[indeterminator]

Maybe they noticed the success of casual gaming (Wii mostly), and figured that better profits await if they can sell equipment to wider audience. That instead of pushing expensive bleeding-edge hardware to small group of hardcore gamers.

Hopefully a break in hardware race forces the game publishers to move from "my effect-bling is better than yours" mode to actually compete in gameplay and quality content.

Re:Nintendo says...

[delinear]

It seems like Sony's usual mis-step of creating nice hardware but completing misjudging the mood of the market. They released a be-all-end-all console that could play games from the current and last two generations, contained a Blu-Ray player and was a Linux computer, but they charged an astronomical price at launch. It then transpired that there market wanted a cheap, dedicated game console and didn't care about the bells and whistles. The world economy starting to collapse a year later probably didn't help, but disregarding even this it was badly judged - if they'd stuck to their guns and produced a cheap, solid gaming console they'd have likely hit profit much sooner and wouldn't now have a bunch of angry customers who've seen the feature set of their purchase pared down. The flip side of the coin is that the PS3 helped them win the BD/HDD war, and taking a long term view maybe they're going to reap back far more than they'd have lost with a cheap console and HDD being the market standard - time will tell on that score.