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Print 56 comment(s) - last by EasyC.. on Aug 31 at 12:31 PM

Sony loses money on hardware, but the platform as a while is profitable

Sony unveiled the new PS3 Slim officially last week at Gamescom in Germany. The new console was officially announced after months of speculation swirling about not only the slimmer PS3, but a price cut as well. Thankfully, both the price cut and new PS3 console became reality.

Times Online sat down with Sony Computer Entertainment's Kazuo Hirai and had a talk with him about the PS3 and the success of Sony as a whole. Hirai said that the time was right for the slimmer PS3 because Sony wanted to pass the savings on to the customer since it had to put less hardware into the PS3 than it was when the console first launched. The pressure from game developers to cut the price of the console likely figured into the decision as well.

When asked if the price cut was an admission that the PS3 sales have been disappointing, Hirai said sales were slower than the PS2, but on track with what Sony saw with the original PlayStation. He also says Sony looks at things on a 10-year life cycle and with the third anniversary, now coming it's too early to say how well the trajectory for the PS3 is doing.

One of the more telling questions in the interview was whether Sony is still losing money on the PS3. Hirai said, "If you're just talking about the hardware alone, the quick answer is yes. That makes good headlines, but I don't actually know that that's the true nature of the business that we're all in, whether it's PlayStation, Xbox or the Wii. I think the better indicator is to look at the business as a whole platform, to ask are you profitable in terms of the hardware, software, and peripherals. And the answer t o that question is yes on a gross profit level since the last fiscal year."

Hirai said in the interview that the "magic wand" motion controller for the PS3 is set for release in the Spring of 2010. He also said that Sony is working hard to be sure that software supporting the controller is available when it launches as well.

Hirai also says that Sony will not be ditching physical media altogether as some expected with the announcement of the UMD-less PSP Go. He points out that in many countries and locations downloading a full PS3 game would take inexcusably long to do.

He said, "We are committed to the PSP 3000 and the UMD business. A lot of people like to speculate that we're getting out of that business, but nothing could be further from the truth. We're not going to deprive consumers in all those other countries."





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RE: Still?
By jrb531 on 8/28/2009 3:50:19 PM , Rating: 2
The problem is, as always, that a console is pretty powerfull at release but year after year loses ground.

At the time of release the Xbox 360 and it's ATI x1950 xt with 512meg was pretty powerful. Who today would use that type of hardware in their system???

So they need "cutting edge" just to try and get some life out of a system. Sure the Wii has "some" fun games but 90% of the Wii games are utter crap that were quick-ported over just to take advantage of the systems popularity.

Let me ask an honest question here...

How many 360/PS3 owners here would buy a Wii and play games on that if the 360/PS3 were not available as opposed to moving back to a computer based gaming system?

Real gamers might have a Wii but it's always a secondary system to either a computer, PS3 or 360. Some of the games on the Wii are very fun but some games just cannot be done correctly on the Wii because it's basically a slightly upgraded Gamecube.

The real insult is that Nintendo is making a huge profit (it costs less than $90 to make a Wii) and they will not budge one bit as the more powerful consoles (with a larger selection of "quality" games) cost about the same.

What Nintendo is doing is a great business decision. As long as the teaming masses of "fools" keep paying $250 for something that costs them under $90 to make... why drop the price?

How many "quality" Wii games come from companies other than Nintendo? A few maybe but look at all the crap that is on the Wii? The half-assed ports and 10+ year old games from dead systems.

So let's keep buying the Wii in record numbers. Let's show everyone that they can put any old crap out there and as long as it's the "in" thing (rem pet rocks???) we'll buy it :)


RE: Still?
By EasyC on 8/31/2009 12:31:01 PM , Rating: 2
AMEN!

I've had all three and I would definitely prefer a PC over a Wii if no 360/PS3 were available.

You are dead on with the marketing. It's all about supply and demand. Since they set their sites on the largest group of consumers (read: Lemmings), they have no need to lower the price until their sales start getting affected since the demand is still there.

Most of the people I know with Wii's don't even use them anymore, except for the occasional party.


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