Is Sony pocketing any money off console sales?

[fuzzydvd]

It's been a while since launch. Any ideas?

What about the Wii and 360?

 

[RESmonkey]

I don't think there is any loss in selling a Wii. It's age-old hardware. They probably spent more on advertising then making the hardware. And no, I'm not flaming.

 

[Dacalo]

To my knowledge:

PS3 - yes
Wii - no
360 - no

 

[mugs]

Originally posted by: Dacalo
To my knowledge:

PS3 - yes
Wii - no
360 - no

I assume you're answering the question "Is console X selling for a loss?" Which is pretty much the opposite of what the OP asked. 😛

Wii has sold for a profit from the start. 360 started off selling for a loss, but after a year or so started selling for more than cost of goods sold... when you factor in warranty costs though, who knows.

 

[Schadenfroh]

Originally posted by: mugs
when you factor in warranty costs though, who knows.

Yeh, the three year warranty against RROD combined with the RROD rate will probably dent their profit margins on the hardware. Did they not give refunds to people who had proof that they had their 360s repaired for RROD as well before the extended warranty started?

 

[fuzzydvd]

Originally posted by: Schadenfroh

Originally posted by: mugs
when you factor in warranty costs though, who knows.

Yeh, the three year warranty against RROD combined with the RROD rate will probably dent their profit margins on the hardware. Did they not give refunds to people who had proof that they had their 360s repaired for RROD as well before the extended warranty started?

yes they did

But they always ship back refurb consoles, repeating the RROD cycle

 

[Kromis]

Nintendo makes about $25 or $75 for each Wii sold. I forgot which it was.

 

[Sadaiyappan]

No one but the console maker knows for sure. Other third parties like to speculate, they say Sony loses money on each console it sells. My guess is that depends on the model, I think they break even on the 40GB and lose money on the 60/80 GB.

 

[mugs]

Originally posted by: Sadaiyappan
No one but the console maker knows for sure. Other third parties like to speculate, they say Sony loses money on each console it sells. My guess is that depends on the model, I think they break even on the 40GB and lose money on the 60/80 GB.

I think it would be the other way around. The 80 GB costs $100 more but doesn't come with nearly $100 more worth of hardware. Maybe an extra $40 worth of hardware. Of course there's a game included, so there is some opportunity cost there.

 

[Dacalo]

Originally posted by: mugs

Originally posted by: Dacalo
To my knowledge:

PS3 - yes
Wii - no
360 - no

I assume you're answering the question "Is console X selling for a loss?" Which is pretty much the opposite of what the OP asked. 😛

Topic Summary: or are they losing money on each console sold?

I assume OP would have common sense to know which part of his question I was answering. :lips:

 

[MrPickins]

Originally posted by: Dacalo

Originally posted by: mugs

Originally posted by: Dacalo
To my knowledge:

PS3 - yes
Wii - no
360 - no

I assume you're answering the question "Is console X selling for a loss?" Which is pretty much the opposite of what the OP asked. 😛

Topic Summary: or are they losing money on each console sold?

I assume OP would have common sense to know which part of his question I was answering. :lips:

Assuming people possess common sense is risky...

 

[CasioTech]

man, wise up they never lose money on anything they make. If they say they do, it's complete BS.

 

[CasioTech]

Originally posted by: mugs

Originally posted by: Dacalo
To my knowledge:

PS3 - yes
Wii - no
360 - no

I assume you're answering the question "Is console X selling for a loss?" Which is pretty much the opposite of what the OP asked. 😛

Wii has sold for a profit from the start. 360 started off selling for a loss, but after a year or so started selling for more than cost of goods sold... when you factor in warranty costs though, who knows.

I'm assuming the cost to fix every console 10x is a big time loss to MS.

 

[CasioTech]

Originally posted by: Kromis
Nintendo makes about $25 or $75 for each Wii sold. I forgot which it was.

It was $50 when it first came out, it's probably over $100 today.

 

[BladeVenom]

Originally posted by: Schadenfroh

Originally posted by: mugs
when you factor in warranty costs though, who knows.

Yeh, the three year warranty against RROD combined with the RROD rate will probably dent their profit margins on the hardware. Did they not give refunds to people who had proof that they had their 360s repaired for RROD as well before the extended warranty started?

But in the 360's second fiscal year, they set aside a large amount of money for repairs so they could show a profit in the third fiscal year. So I would guess this last year they made a profit, at least on paper. On the whole though it's lost billions.

 

[ric1287]

Originally posted by: CasioTech
man, wise up they never lose money on anything they make. If they say they do, it's complete BS.

Even the rough estimates of the ps3 had it costing hundreds more than they sold it for in the beginning. But you're right, its probably a giant conspiracy.

 

[mugs]

Originally posted by: CasioTech
man, wise up they never lose money on anything they make. If they say they do, it's complete BS.

When the PS3 came out, analysts calculated the hardware cost to be nearly $900 for the 60 GB. Even if that was a high estimate, do you really think it was $300 high?

 

[Bateluer]

I know Nintendo actually makes money on each Wii sold, but Sony and MS lose money on each PS3/Xbox sold. MS probably loses more money because of the increased money to replace defective consoles plus the increased money for R&D to resolve the various issues with the 360, and Sony because they went for extremely complicated, top end hardware.

Its a wonder MS can still sell consoles, the Xbox line makes Windows ME look down right reliable.

 

[imported_Imp]

IIRC, there was an article recently that said that Sony has lost so much selling the PS3 at a loss that they don't plan on recovering all of it through the games division alone. Doubt it will be a problem for them...

 

[CasioTech]

Originally posted by: mugs

Originally posted by: CasioTech
man, wise up they never lose money on anything they make. If they say they do, it's complete BS.

When the PS3 came out, analysts calculated the hardware cost to be nearly $900 for the 60 GB. Even if that was a high estimate, do you really think it was $300 high?

I think when they calculate 'hardware cost' they would price a state of the art processor to cost $300 when in fact it costs less money than an obsolete processor which they value at $30.

One of the biggest things are they also factor in R&D into the price of hardware and most likely base the prices it will cost the 'average' consumer to build a machine not a company which makes millions of units using plants and technology which are completely paid off and developed in house.

Basically, if I bought the ps3, it should cost me $900 for Sony to make the usual 300-400% markup, so even if they sell them at cost, that is not to say they ever or ever will lose money on any hardware or device.

No company wants to lose billions of dollars and if they say they have it's 'potential' money which they expected to make and haven't but hardly loses of any kind.

 

[RandomFool]

The Wii has made money from the get-go, probably to offset the risk of creating such and odd console. Makes you wonder if Nintendo had a beefier replacement ready to release if the Wii had failed.

The 360 itself started being profitable to sell a few months back but the RROD issues have probably kept them from making any money overall.

The PS3 is and has been a money pit but it's slowly been getting better. They might start to make a profit on sales after they shrink everything down later this year.

 

[ric1287]

Originally posted by: CasioTech

Originally posted by: mugs

Originally posted by: CasioTech
man, wise up they never lose money on anything they make. If they say they do, it's complete BS.

When the PS3 came out, analysts calculated the hardware cost to be nearly $900 for the 60 GB. Even if that was a high estimate, do you really think it was $300 high?

I think when they calculate 'hardware cost' they would price a state of the art processor to cost $300 when in fact it costs less money than an obsolete processor which they value at $30.

One of the biggest things are they also factor in R&D into the price of hardware and most likely base the prices it will cost the 'average' consumer to build a machine not a company which makes millions of units using plants and technology which are completely paid off and developed in house.

Basically, if I bought the ps3, it should cost me $900 for Sony to make the usual 300-400% markup, so even if they sell them at cost, that is not to say they ever or ever will lose money on any hardware or device.

No company wants to lose billions of dollars and if they say they have it's 'potential' money which they expected to make and haven't but hardly loses of any kind.

You should start your own company, you seem to have this whole "business" thing down.

 

[CKDragon]

Originally posted by: ric1287

Originally posted by: CasioTech

Originally posted by: mugs

Originally posted by: CasioTech
man, wise up they never lose money on anything they make. If they say they do, it's complete BS.

When the PS3 came out, analysts calculated the hardware cost to be nearly $900 for the 60 GB. Even if that was a high estimate, do you really think it was $300 high?

I think when they calculate 'hardware cost' they would price a state of the art processor to cost $300 when in fact it costs less money than an obsolete processor which they value at $30.

One of the biggest things are they also factor in R&D into the price of hardware and most likely base the prices it will cost the 'average' consumer to build a machine not a company which makes millions of units using plants and technology which are completely paid off and developed in house.

Basically, if I bought the ps3, it should cost me $900 for Sony to make the usual 300-400% markup, so even if they sell them at cost, that is not to say they ever or ever will lose money on any hardware or device.

No company wants to lose billions of dollars and if they say they have it's 'potential' money which they expected to make and haven't but hardly loses of any kind.

You should start your own company, you seem to have this whole "business" thing down.

:laugh:

 

[erwos]

Originally posted by: CasioTech
No company wants to lose billions of dollars and if they say they have it's 'potential' money which they expected to make and haven't but hardly loses of any kind.

Sony is _losing money_ in their games division right now. It's right on their quarterly earnings report. Read it, and be informed. The things you're discussing are related to opportunity cost, which is generally not on the balance sheet.

 

[CasioTech]

Originally posted by: ric1287

Originally posted by: CasioTech

Originally posted by: mugs

Originally posted by: CasioTech
man, wise up they never lose money on anything they make. If they say they do, it's complete BS.

When the PS3 came out, analysts calculated the hardware cost to be nearly $900 for the 60 GB. Even if that was a high estimate, do you really think it was $300 high?

I think when they calculate 'hardware cost' they would price a state of the art processor to cost $300 when in fact it costs less money than an obsolete processor which they value at $30.

One of the biggest things are they also factor in R&D into the price of hardware and most likely base the prices it will cost the 'average' consumer to build a machine not a company which makes millions of units using plants and technology which are completely paid off and developed in house.

Basically, if I bought the ps3, it should cost me $900 for Sony to make the usual 300-400% markup, so even if they sell them at cost, that is not to say they ever or ever will lose money on any hardware or device.

No company wants to lose billions of dollars and if they say they have it's 'potential' money which they expected to make and haven't but hardly loses of any kind.

You should start your own company, you seem to have this whole "business" thing down.

yeah and you can be my janitor.