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PlayStation (Games) Sony Games

Sony Says It Sold 4.5 Million PlayStation 5 Consoles Last Year and Took a Loss on Sales (polygon.com) 41

Posted by msmash from the tough-luck dept.
Sony shipped more than 4.5 million PlayStation 5s from the console's Nov. 12 launch to the end of the year, but it took a loss on those sales because the PS5's "strategic price point" is lower than what it cost to manufacture it. From a report: The disclosure was part of Sony's quarterly report to investors, delivered in Japan earlier today. The losses on PS5 sales were not specifically broken out -- and they were part of an overall Game & Network Services Segment that saw a 26.7 billion yen ($2.5 billion) increase in operating income over the same quarter in 2019. Sony's PlayStation revenue from game sales (both PS4 and PS5, add-on content included) plus larger profit margins on the outgoing PlayStation 4 more than made up any shortfall, the company said. By comparison, the PlayStation 4 sold more than 4.2 million units from its November 2013 launch to the end of that year. The company in November said the new PlayStation 5 is facing "unprecedented" demand, making its availability scarce, even though more PS5s have been available, in whole numbers, than their predecessor. Microsoft's Xbox Series X has faced the same issue, with the company's chief financial officer telling investors back in November that a console shortage could last until April.
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Sony Says It Sold 4.5 Million PlayStation 5 Consoles Last Year and Took a Loss on Sales More

Sony Says It Sold 4.5 Million PlayStation 5 Consoles Last Year and Took a Loss on Sales

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  • Subsidize razor to profit off blades (Score:3, Insightful)

    by Tablizer ( 95088 ) on Wednesday February 03, 2021 @04:16PM (#61024472) Journal

    Consoles are loss-leaders. It's commissions on game sales they really want.

    • That is one business model. Nintendo for example doesn't use that model, and Sony and Microsoft typically don't either towards the end portion of a console generation (eg, if a console gen lasts 7 years they're still making hardware with the same capability towards the end, and it's typically much cheaper to make by then).

      Overall though consoles still represent a pretty good value. $400-500 for a system that is guaranteed to play everything for the next 6-7 years without worrying about upgrading specific

      • Good value??

        Have you looked at the price of those games??
        And they're all generic total horseshit too. Zero innovation.

        It's a giant rip-off. Nothing else.

      • Uh... yeah. Nintendo doesn't charge less money for their games than anyone else.

        I remember when Nintendo was bragging that no 1st-party Wii game would cost more than $50... and they completely broke that promise.

        • That's not the point. The point is that they don't typically sell the consoles at a loss. They make a profit on both the consoles and the games.

    • Consoles are loss-leaders. It's commissions on game sales they really want.

      Exactly. I'm not sure how the concept of a loss-leader is so foreign here. Grocery stores have done this for decades to get you in the door.

      IMHO, the price isn't low enough. Provide the console for free. Charge for the games. You'll probably get more customers that way.

      • Until someone figures out how to boot linux on it and people will have free hardware.

      • IMHO, the price isn't low enough. Provide the console for free. Charge for the games. You'll probably get more customers that way.

        Yeah of course they'd get more customers. Like me. I'd get one if it was free. I'd never pay $500 for one however.
        I may even end up buying a game or two at some point. But most likely, I'd just use it as an HTPC or install Linux on it at some point if someone finds a way. But one thing is sure, they'd loose money with me.

      • I need a console but they are nowhere to be found for MSRP. The real story here is that the price is too low, leading to scalping and supply problems.

        • I need a console but they are nowhere to be found for MSRP. The real story here is that the price is too low, leading to scalping and supply problems.

          There's a pandemic going on right now which has driven up gaming demand for obvious reasons. As people return to work (hopefully), that demand won't be quite as strong. In fact, it may not be anywhere near as strong. That's probably the first reason you can find plenty of consoles selling at MSRP, but completely out of stock.

          Since the pandemic hit in the US early in 2020, and consoles weren't due to be released for at least another six months, console manufacturers had plenty of demand statistics to go b

      • One of the reasons I don't really like consoles is the high cost of games in the first place, and the inability to run older games. Maybe 5-7 years seems like an eternity to a teenager (key market demographic) but I regularly play games older than that. So I pay more for a PC (though I'm going to have one of those anyway so I'm really just paying for the graphics card upgrades), but I don't have to pay console subscription fees, I can wait for prices to go down on the games themselves, I can play my older

      • Wait, bait-and-switch schemes aren't illegal where you live?

    • Well, I can't very well buy PS5 games until I can get a PS5 to play them on. Well... I *could* I guess... but why would I buy what is nothing more than a coaster to me because Sony massively screwed up their demand forecasting AGAIN, and PS5s are all but unobtainable?

      Honestly, after the fiascos that were the PS2 and PS3 launches (I don't recall if the PS4 launch was botched so badly as well. But given Sony's track record, my guess would be that it was.) I would have thought that Sony would *eventually* fi

    • Re: (Score:2)

      by alvian ( 6203170 )
      You didn't consider the scalpers. Last I checked the attach rate for PS5 was less than one. That means for every PS5 console sold, less than 1 PS5 game was purchased. I don't know about you, but real gamers would buy at least one game on the new console to see what the new console can do. That's not happening with so many consoles being hoarded by the scalpers. Just take me for example. Guy with a job and limited time but got money to spend. There are plenty of PS4 games still in their shrink wraps because

    • And the outrageous, permanent prices of the games are why I don't buy console games anymore.

      Hey, if I can own a game and play it right off the disc, the price premium may be worth it. Games on discs depreciate over a year and I can pick them up for cheap. If I have to deal with the same digital downloads, day 1 patches, endless firmware updates, DRM, and online activation as I do on the PC... I may as well stick to the PC and save a few bucks.

    • Comment removed based on user account deletion

  • Most aggressive companies operate at losses - they're buying the market for that product line. They'd rather spend that money for more customer base later than make money on each sale now.

    Same reason you'd rather spend more on expanding your hotel chain now, rather than be seen as the third-rate place a bit later.

    The hardware sales are not their endgame in this strategy.

    Ryan Fenton

    • I don't know how much faith I'd put in what's being claimed here, particularly without seeing how Sony is doing all of their accounting, which isn't available to us. Sony would very much like everyone to believe that they're selling these consoles for less than they cost to manufacture, because that just makes it seem like one hell of a deal that you and I really ought to get in on. Anyone who spends the smallest bit of time thinking about it realizes that they have to make their money somewhere and satisfi

  • One thing I think is pretty strange, is how much money both Sony and Microsoft are giving up with console launches.

    We all knew both console launches were going to be - shortages and scalping aplenty.

    So why not actually charge more in the first few months after launch? I was looking at eBay proceeds off and on for a long time after launch/ Even now, on eBay a PS5 disc edition is selling pretty constantly for around $800. Sony could have easily charged $700 from launch, for the first six months. I'm sure

  • easy.
    it is a business loss
    under produce.
    then new price with enhanced stuff.
    bets anybody

  • If consoles are still sitting in scalpers' basements and not in consumers' living rooms, then I would imagine game sales (and profit) are suffering. Why aren't they doing more to get consoles in the hands of consumers. (Yes, I'm annoyed that I still don't have one.)

    • Re: (Score:2)

      by samdu ( 114873 )

      They're building the things as fast as they can. And they have no control over how many someone buys unless they're buying them directly from Sony.

      • They're building the things as fast as they can. And they have no control over how many someone buys unless they're buying them directly from Sony.

        It sounds like that's the solution...Sony sells directly to users with PSN IDs six months old or older, each PSN ID can order a maximum of two consoles, orders drop ship in the order they were received.

        If people are going to have to wait a month to get a system, they can wait a month 'in line' and at least get occasional e-mails with their status. If Sony sells directly in this way, suddenly retailers have incentive to do their own sign-up program to help facilitate distribution, rather than letting them en

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      If consoles are still sitting in scalpers' basements and not in consumers' living rooms, then I would imagine game sales (and profit) are suffering. Why aren't they doing more to get consoles in the hands of consumers. (Yes, I'm annoyed that I still don't have one.)

      Because the data has been sketchy and anecdotal. Only around mid-January did the extent of the problem be known in Japan - the attach rate of the console was well under 1 (typically a launch console attach rate is around 1 - that is, 1 game per c

  • Prepare your wallets for that games ink!

  • Open up the old hardware (Score:5, Insightful)

    by stikves ( 127823 ) on Wednesday February 03, 2021 @10:30PM (#61025754) Homepage

    Lots of PS4s, Xbox Ones, and even PS3s are lying around, waiting to be discarded. That is a shame.

    PS3 had Linux, which was nice, until Sony decided to block it in an update. In a strange twist PS4 was the only console hacked last gen, and it is actually possible to install Linux on it now:
    https://github.com/fail0verflo... [github.com]

    Xbox One and Series has "developer mode", which is a one time unlock ($10?), and then you can run custom applications, including emulators:
    https://arstechnica.com/gaming... [arstechnica.com]
    Including even the PS2, which is missing on PS4/PS5 for some reason:
    https://www.theverge.com/2020/... [theverge.com]

    Nintendo Switch forgot to lock their bootloader, and now has a very vibrant community:
    https://switch.homebrew.guide/ [switch.homebrew.guide] (this is fixed on the second hardware update though).

    And let's put PS Vita here as well, for those who still have one: https://vita.hacks.guide/get-s... [vita.hacks.guide]

    Overall consoles either get hacked, or have limited dev modes. They are no longer for sale, and there is obviously not much to worry about pirates (they already have their way).
    Why not open up the old hardware to reduce e-waste? A PS4 or a Xbox One would make a nice entry level desktop, especially useful in the stay at home season.

    • Why not open up the old hardware to reduce e-waste?

      Please send me your private key so I can do this one specific thing... do you see the problem with the request? In the world of cryptography you entire build something insecure or you build something secure and control the private key. You're making a big assumption that the key isn't reused / used elsewhere.

  • After looking at the price of the new consoles AND the trouble of trying to obtain one AND the cost of each game I decided to go in another direction. I paid $300 for a nice couch input combo of lapboard, keyboard, mouse, and game controller for my PC.

    Now I can play any PC game I want from the comfort of my couch.

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