PS3 losses surpass PS2 profits

Livewire_19 | August 19, 2008 | Industry News | Playstation 2 Playstation 3 Company

According to DFC intelligence figures cited by Dave Perry, Sony has lost more money on the PlayStation 3 hardware than it made on the PlayStation 2 during its five most popular years. In pure numbers speak it's lost $3 billion on the PS3, which is about equivalent to everything it made selling PS2s during its peak years.

But Sony's PS2, the best selling videogame console of all time, was making a healthy profit on each unit sold as of a few years ago. Seemingly all of that went to fund the PS3 hardware that Sony has been selling -- and for the foreseeable future will continue to sell -- at a loss. (Some estimates at one point put it at $260 per console, though manufacturing costs have steadily come down in the past year).

Putting things in perspective, though, Sony did lose quite a bit on PS2 hardware in its first year or so -- likely not $3 billion, but still. If things continue to move in Sony's favor and the PS3 manages to have a healthy 10-year life cycle (it's possible...the 8-year old PS2 managed to outsell both the Xbox 360 and the PS3 last year), it's still possible, when all is said and done, that the company can break even on hardware costs this generation. Or maybe eventually even make a profit. At this rate it'd better; who knows what the PlayStation 4 could end up costing the company.

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Most recently commented on by Slumpy monkey on Aug 24, 2008

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0 thumbs!
iLLmatic | August 20, 2008

We already know this. Thing is, PS2 has been out twice as long as it's peak selling period, it's still selling today, and PS3 is finally turning a profit.
- 2 thumbs!
  Red 9 | August 20, 2008
  
  This whole article is just a crack at trying to downplay the PS3.
  
  I love the final line in this article: "The PS4 could end up costing Sony the company."
  
  Utter bullcrap. Just bullcrap.
  - 1 thumbs!
    Livewire_19 | August 20, 2008
    
    How is submitting facts downplaying the PS3? It's still a great console even if it's bringing Sony down financially.
    - 0 thumbs!
      Fatal Error | August 20, 2008
      
      Well the thing is that it isn't bringing it down anymore because they're turning a profit (not to mention sales are increasing).
    - 1 thumbs!
      Slumpy monkey | August 20, 2008
      
      No, there not turning a profit at all.
    - 2 thumbs!
      Red 9 | August 20, 2008
      
      Last I checked actually, Sony found themselves $3M further in debt from the PS3.
0 thumbs!
Twisted | August 20, 2008

Really? Haha, thats funny. I thought the PS3 would be doing good, but I guess not. Dunno what its like though, never played a PS3.
3 thumbs!
RabidChinaGirl | August 20, 2008

I think it's been given that Sony as a company hasn't been doing as well since they started half-assing their products, which goes beyond the PS3. Why do you think they even bother with the PS2, still? It's trying to pick up the slack for them, and phasing it out would cost the company.

I remember reading an analyst's take on the situation, and there was talk of Sony relying too much on its existing fan base when they made a console, thinking that everyone would jump at the chance to buy their platform, despite the price and early hardware issues (which still occur, but at least they're replacing them). It wasn't a smart move, and Sony is learning the hard way that you can't always rely on fan loyalty, just like fans can't rely on company loyalty.
- 2 thumbs!
  iLLmatic | August 20, 2008
  
  A lot of it was rumors or false information. Sony sold the most TVs and cameras of all electronics manufacturers, I believe last year.
- 1 thumbs!
  Fatal Error | August 20, 2008
  
  I find it funny because Sony is the company that really isn't "half-assing" anything.
- 1 thumbs!
  VeGiTAX2 | August 20, 2008
  
  iLLmatic you had it with the TV's they outsourced all LCD production to Sharp to handle now, they just take all their hardware and repackage it at this point.
  
  The camera front is a bit different, they let their other acquired divisions retain their name and develop technology and now they're doing the badge game with minor tweaks to continue their DSLR line. It's not as bad as people make it out to be though the components are still high end, just dated a bit, their personal camera market is still going well.
  
  They did push off their Cell contracts to Toshiba as well and they've made some other market related calls to shape up their situation.
  
  Overall they've probably ditched some things they might not have if they didn't need to appease their investors so much though.
  
  I wouldn't say they entirely half assed anything but they did slice up their SKU's to death trying to make them cost effective to produce ignoring pretty much the original pitch to the consumer before launch. I guess they could only eat themselves to death for so long before they snapped out of it though.
0 thumbs!
Goldva_X | August 20, 2008

I couldn't expect anything else from a guy who's avatar is Fable 2. So. Very. Sad.
- 1 thumbs!
  Slumpy monkey | August 20, 2008
  
  An avatar means jack, You shouldn't judge someone because they like a certain game.
  
  If it was a MGS avatar what would you be saying?
1 thumbs!
Livewire_19 | August 20, 2008

I said the PS3 was a great console. goldva x mabye you should try Fable once your old enough to buy it.
It looks like some of the rabid Sony fanboys forgot to take their meds today. So. Very. Sad.
- 2 thumbs!
  Goldva_X | August 20, 2008
  
  I never said I hate Fable 2 you dumb *bleep*. If you weren't a goddamned bigot you would know that Fable 2 is one of the games i like the most on the 360.
0 thumbs!
Fatal Error | August 20, 2008

Rabid fanboys? Where? Real quick, tell me the relevance of this article in the big scheme of things.
- 2 thumbs!
  Seproth | August 20, 2008
  
  WTF?! What is the relevance of anything in the big scheme of things? I'm not sure you grasp what you mean by the big scheme of things...Humanity is nothing in the big scheme of things much less an article.
0 thumbs!
Zeon I | August 20, 2008

All they need to do is lower the price. Lower the *bleep*ing price.
1 thumbs!
Final Blade | August 20, 2008

_{iLLmatic Fatal and Red has hit all the points this article needs. We knew this already from months ago. Yes the PS3 has lost alot of money, so have 360. But the PS3 IS turning profit despite what Slumpy likes to believe.

@Livewire the thing is Games is just one part of Sony, they have MANY divisions keeping the company strong, in fact even if they can't make another game system, the company will still live strong. They aren't hurting them financially as you make it out to believe. Maybe for the game division but thats hardly there main thing.

And there's no fanboys here, just people trying to point out the FACT we knew this already and the system is making profits now. Sony never had real competition with the PS1 and PS2 before, now its a whole new ballgame and Sony has some tough competition this generation with Nintendo and MS. But stuff like this benefits the gamer more so then the companies, they'll keep pushing games and we'll end up buying them. I don't think we should worry much on Sony this point, they've been outselling the 360 per month since January this year.}
1 thumbs!
Livewire_19 | August 20, 2008

People don't shoot the messenger. I did not write the article, it came from 1up.com take your anger out on them. I didn't say anything bad about Sony. I will probably get a PS3 when some exclusives come out that I actually want to play.
- 0 thumbs!
  Final Blade | August 21, 2008
  
  quote Livewire_19
  It's still a great console even if it's bringing Sony down financially.
  quote Livewire_19
  It looks like some of the rabid Sony fanboys forgot to take their meds today. So. Very. Sad.
  _{These are what people are shooting at, not the messenger, just your poor choice of words and knowledge of the fact Sony isn't doing badly financially cause of the PS3; that and the fact the PS3 IS turning profits and has been outselling per month on the 360 for 7 months now.}
  - 1 thumbs!
    Slumpy monkey | August 21, 2008
    
    Its all fine and well selling more consoles, But not when your making a loss on every console you sell.
    
    Ps3 Is NOT making profit at all, its scheduled for profit in 09/late 08.
    
    You also forgot that the 360 actually outsold the ps3 in march 08.
    
    don't know how you think only are turning a profit.
    - 1 thumbs!
      Red 9 | August 21, 2008
      
      The point being made, slumpy, is that they're not losing nearly as much money as before. Losses are decreasing. They're not turning a profit, no, but the point at which they do gets closer and closer as sales improve, which they are.
      
      And so 360 outsold for one month; that's hardly an argument.
    - 0 thumbs!
      Slumpy monkey | August 21, 2008
      
      I know, I never ment to really make a point.
      
      I was just responding to him being arrogant towards me, and how he said the PS3 was outselling the 360 for 7 months.
      
      I was just pointing out some of the flaws in his post.
    - 1 thumbs!
      Seproth | August 21, 2008
      
      You think Microsoft is making money on 360s sold? They aren't...
      
      That's how it works. They essentially give away the consoles and make money on games and accessories. It's like razors you give away the razors and make your money on blades. It's very much an established business strategy.
    - 2 thumbs!
      Red 9 | August 21, 2008
      
      @slumpy: ah well, no harm done then.
      
      @Seproth: Microsoft turned a profit on the 360 ages ago. So no, they're not losing money on it.
    - 1 thumbs!
      Slumpy monkey | August 21, 2008
      
      Seproth:
      
      Did I ever state that Ms was making a profit? NO
      
      Were talking about the PS3 not the Xbox 360.
    - 0 thumbs!
      Final Blade | August 21, 2008
      
      _{I was talking to Livewire not you Slumpy, I could honestly give two shits about your posts here, its just the poorly words Livewire keeps spewing thats making me respond. Im sure Sony is making profits with the PS3 right now, but since they did lose alot of money before it made it hard to say they regained all loses. Thats the difference.}
    - 0 thumbs!
      Slumpy monkey | August 22, 2008
      
      "But the PS3 IS turning profit despite what Slumpy likes to believe. "
      
      ORLY
      
      And no there not making a profit at all yet.
    - 0 thumbs!
      Final Blade | August 22, 2008
      
      _{Slumpy you replied to the wrong message I made thats why it made no sense. But I do know and heard from sources online, which I don't have the links offhand, the PS3 IS turning profits. But think what you like Im not going to sit here and play who's right.}
    - 0 thumbs!
      Slumpy monkey | August 22, 2008
      
      Ok lets leave it at that, But type in PS3 making profit in google and all of them are about predictions for 09/08
0 thumbs!
BANDITO ATTACK | August 20, 2008

so ... 5 years of ps2 profit have effectively been lost by the ps3 after just 2 years?
ohwell. at least the ps3 is worth the losses. @__@
0 thumbs!
Red 9 | August 21, 2008

Except that the PS2 didn't have the world's most powerful processer, nor does it double as a media hub.
1 thumbs!
Livewire_19 | August 22, 2008

Uhhh, Final Blade did you just contradict your self? "poorly words".
And my overall point in this article was that even though the PS3 is now turning a profit it is going to be hard for Sony to dig itself out of the financial hole that it made. Same goes for Microsoft.
- 0 thumbs!
  Final Blade | August 22, 2008
  
  quote Me
  _{@Livewire the thing is Games is just one part of Sony, they have MANY divisions keeping the company strong, in fact even if they can't make another game system, the company will still live strong. They aren't hurting them financially as you make it out to believe. Maybe for the game division but thats hardly there main thing.}
  _{Just re-quoting this just in case you missed. Sony's game division might be slightly affected, but not the whole company of Sony. Which is what I mean by "poorly choice of words".
  Sony has MANY divisions in which they're making lots of money. And its going to be hard for Sony this generation with 360 and Wii yeah but not because of financial problems, but for install base issues. 360 has been out first and has the best library to date with better online features and now Sony is getting more top quality games now. Wii is still selling like hotcakes everywhere.
  So its not going to be easy for Sony but this is better news for gamers then the company. We shouldn't worry about the company as of now. They're all fine. MS has loads of money, and Sony has alot of money themselves they're not broke you know.
  
  You're making something into something thats no there. Both company's are just fine and the PS3 is outselling the 360 every month mostly, the PS3 is now very close to being even terms with 360 in sales.}
0 thumbs!
iLLmatic | August 23, 2008

slumpy, why are you saying Sony and Microsoft are not turning a profit?
- 1 thumbs!
  Slumpy monkey | August 24, 2008
  
  I'm not, I'm just saying final blade is wrong saying the PS3 is turning a profit for ps3, which it isn't.
  
  I didn't mean for it to get blown into some argument ffs.