Do you think it is possible for Sony to reach profitabilty with the PS3?

[patsu]

I can't see Blu Ray in PS3 as a spearhead for Blu Ray adoption as they could have simply written a cheque to the content houses sooner and it would have been cheaper in the end.

PS3 plays a pivotal role in Blu-ray adoption. It is much MUCH more than writing bigger checks. For the most part, Blu-ray arrived 6 months to a year later than HD DVD, with lot's of FUDs working against it (e.g., BD-50 is impossible, Java is too slow, Blu-ray is too expensive for the industry and consumers, Blu-ray discs will be scratched !). The studios would want hard proofs of good, trouble-free consumer adoption before going exclusive. HD movie is their future as well. When PS3 was released, Blu-ray movie sales immediately overtook HD-DVD sales and has never let up once for the next 24 months. During which the studios and manufacturers used real consumer data to understand and forecast their growth. The dominating PS3 presence and its high tech specs also helped to simplify testing and development.

Last year, naysayers were still citing DVD and digital download as reasons why Blu-ray would remain niche/small despite winning the HD movie war. Fortunately, Blu-ray movie sales and rental are increasing at a good pace thanks to the large, growing and enthusiastic user base. Today, we know DVD is giving way, and digital download does not work against Blu-ray adoption in general.

Because PS3 is able to play 3D movies, the existing PS3 user base also helps to simplify 3D push (significantly !). Afterall, these are mostly people who like gadgets. It's too early to say 3D will succeed, but the point is -- if Sony plays their cards right -- PS3 can help to push future media standards because of its large footprint and extremely high specs compared to regular, fixed CE devices.

Now that Blu-ray is entering mainstream, the cost cutting measures (e.g., Broadcom's chipset) will play a bigger role in expanding the base. Sony make money from professional BD equipments, components, blank discs, movies and royalties.

 

[Laa-Yosh]

I don't think it's a valid simile considering the vastly different dynamics of the original Xbox business, particularly hardware wise.

The dynamics might be different but, the amount of money they've burned is quite similar, in fact I recall the PS3 making an even greater loss, but then again PS2 was more then profitable. But all those profits were spent on the PS3 and some more, so you can see how deep a hole Sony is in now. It'd take another PS2 to turn them back to profitability and there's no way the PS3 can do that.

But, just as with the Xbox, this won't stop Sony from moving on into the next generation. They'll try what they can with the current system, and make sure they don't make the same mistakes with the next one, just as MS did.

 

[corduroygt]

I can't see Blu Ray in PS3 as a spearhead for Blu Ray adoption as they could have simply written a cheque to the content houses sooner and it would have been cheaper in the end.

Toshiba did that with Paramount, look how well that worked out. Blu-ray is still an adolescent format, but in 3-4 years in time for the next console generation, it should be as mainstream as DVD was when the 360 was launched. And don't forget, with each BD disc pressed, Sony gets money, sometimes even more money than just royalties, because they are actually in the replication business themselves. Blu-ray was Sony's branching out to different businesses and the cost they paid was with the PS3.

 

[eastmen]

They wont make their money back on the ps3. Just look at some of the numbers posted and thats with the psp and ps2 selling software and hardware for profit.

The ps3 cost them alot of money. I'm sure though the ps4 will turn a large profit based on alot of the groun work laid out on the ps3. But i'm thinking even the ps4 will cost them money in the short term.

The ps3 will be a memory at the point the ps4 makes money and by the time the games division starts remaking the bulk of what the ps3 lost the ps5 will be out.

Thats not to say it matters to sony. Its already sunk the money in. Its really what happens in the future.


I think they can reuse the cell (double it i guess)and put in another nvidia or even possibly power vr gpu in and have a new system without most of the growing pains of the ps3 out of the way.

Of course Sony's fortunes may be to closely tied with Japan's gaming companys future and thats not looking to good. More and more of the popular games in the west (europe and the usa) are games that western devs do extremely well and japanese type games are becoming lessp opular. The playstation brand was really tied to that. They may never become dominate again in the market.

 

[eastmen]

Toshiba did that with Paramount, look how well that worked out. Blu-ray is still an adolescent format, but in 3-4 years in time for the next console generation, it should be as mainstream as DVD was when the 360 was launched. And don't forget, with each BD disc pressed, Sony gets money, sometimes even more money than just royalties, because they are actually in the replication business themselves. Blu-ray was Sony's branching out to different businesses and the cost they paid was with the PS3.

of course bluray can just become a foot note in history. Lots of bluray players are coming standard with streaming solutions so bluray may be pushing its own demise.

I personaly want ms to go disc-less next gen and i'd love sony to do the same. Steam has changed the way I and many others buy games and we'd love to see it happen on the console side. Not ot mention that a single 3.5inch drive would be smaller and much faster than any bluray drive and considering a 1TB drive now costs $80 or less to a consumer it could be a viable way foward.

 

[baten]

What I would love for the next generation of consoles would be a "sort of" subscription model.
You pay a certain amount monthly - say 20-30 USD - and, for a month, you get access to play any number of games you want that month, new or old, for as long as you want.

The money/profit will be split between the platform owner and the developers, proportionally with the number of hours you spent playing each game. Games with good value/content/replayability/multiplayer will be rewarded more, half-assed games will get much less.

Games could be downloaded through a torrent-like system, no need for huge severs, or could be distributed freely through game outlets, magazines etc - but they wil not work unless you have a valid account.

PS3 has proven that you can produce a pirate-free console, so this should work nicely.

This also take care of second-hand market.

 

[Shifty Geezer]

The limiting factor I guess wasn't PS3 sell through rates it was the time to disperse their service amongst their other products.

I agree with that. However, despite Sony's ineptitude limiting what they'll make back from PSN, it is still a revenue stream that's going to need to be factored into PS3's investment/return considerations.

I can't see Blu Ray in PS3 as a spearhead for Blu Ray adoption as they could have simply written a cheque to the content houses sooner and it would have been cheaper in the end.

Not by any stretch. Why did all those in the BRD consortium join the BRD consortium in the first place? How far would BRD have got if Sony bought out the movie studios' support and they didn't release discs on HD-DVD, but no-one bought BRD players and movies? PS3 established BRD before the machine ever launched. Luckily for Sony the brand was on such a high expectations were going to be higher than the machine managed. No PS3 would have meant a lengthy format war IMO that could well have gone HD-DVD's way for being cheaper and sooner to market.

 

[corduroygt]

of course bluray can just become a foot note in history. Lots of bluray players are coming standard with streaming solutions so bluray may be pushing its own demise.

I personaly want ms to go disc-less next gen and i'd love sony to do the same. Steam has changed the way I and many others buy games and we'd love to see it happen on the console side. Not ot mention that a single 3.5inch drive would be smaller and much faster than any bluray drive and considering a 1TB drive now costs $80 or less to a consumer it could be a viable way foward.

It's too early to go discless, even in 3-4 years. The infrastructure is just not there. I use comcast and they have a 250GB limit for example. Also bear in mind these consoles are sold worldwide, in some areas where infrastructure is even worse or non-existant.
However, I can see PS5 and the next-next xbox as DD-only for sure. Blu-ray is the last great physical media before DD will take over, but that's not going to happen in the next 10 years.

 

[eastmen]

It's too early to go discless, even in 3-4 years. The infrastructure is just not there. I use comcast and they have a 250GB limit for example. Also bear in mind these consoles are sold worldwide, in some areas where infrastructure is even worse or non-existant.
However, I can see PS5 and the next-next xbox as DD-only for sure. Blu-ray is the last great physical media before DD will take over, but that's not going to happen in the next 10 years.

Don't know how important it is. The 360 has 20m live accounts so people have some form of internet connected to 2/3rds the 360s

 

[zed]

Don't know how important it is. The 360 has 20m live accounts so people have some form of internet connected to 2/3rds the 360s

very important, since that includes the free accounts i.e theres no real reason not to setup one yet only ~50%(*) of xbox users choose to have one, couple this with the disaster of psp go shows next gen will not download only, as corduroygt saiz its possible the generation after that (circa2020) will be download only

(*)~36million xbox360s + a couple of million xbox users

 

[obonicus]

Depends on what profitability means. Actually making money per PS3? I think that's quite possible. Making up for the money they lost this generation? No way in hell.

 

[corduroygt]

Don't know how important it is. The 360 has 20m live accounts so people have some form of internet connected to 2/3rds the 360s

First, 360 install base is nearing 40 million, not 30, so it's close to 1/2, and then you have to consider both the case of multiple accounts, and also the quality of those connections. It doesn't take much bandwidth to play online, but when the only way you can get a game is a 20GB download, those people going online in 768kbit ADSL connections are screwed.

 

[Shifty Geezer]

Multiple accouts is a big issue. At CES, Sony spoke of something like 36-39 million PSN accounts. Forget which, but that's more accounts than PS3s. We now some people created accounts just to get the free Transformers film!

Both companies have access to the unique consoles accessing them. I imagine those figures would be more accurate, but they're not given.

 

[Laa-Yosh]

very important, since that includes the free accounts i.e theres no real reason not to setup one yet only ~50%(*) of xbox users choose to have one

Connecting your Xbox online may require some extra work if your internet connection is not in the same room or you don't have a router from the start (or wifi). It may simply not be worth your time (and money) if you don't plan to subscribe to Gold and play online games; or if you can fill your gaming hours without any online content.

If the 360 had a builtin wifi adapter and every internet subscription would give you a wireless router, I'm sure the number of online Xboxes would be a lot bigger.

 

[tuna]

First, 360 install base is nearing 40 million, not 30, so it's close to 1/2, and then you have to consider both the case of multiple accounts, and also the quality of those connections. It doesn't take much bandwidth to play online, but when the only way you can get a game is a 20GB download, those people going online in 768kbit ADSL connections are screwed.

Are not something like 25 - 33 % of all 360s dead from RROD? That would cut the install base quite a bit...

 

[Laa-Yosh]

Edit: as far as I know replacements for RROD Xboxes are not included in any sales data, so the only ones out of the picture are where the owner did not get it repaired.

 

[Squilliam]

Not by any stretch. Why did all those in the BRD consortium join the BRD consortium in the first place? How far would BRD have got if Sony bought out the movie studios' support and they didn't release discs on HD-DVD, but no-one bought BRD players and movies? PS3 established BRD before the machine ever launched. Luckily for Sony the brand was on such a high expectations were going to be higher than the machine managed. No PS3 would have meant a lengthy format war IMO that could well have gone HD-DVD's way for being cheaper and sooner to market.

You're right. I guess I was a little short sighted to assume that BR could have won without PS3 support.

 

[BadTB25]

Multiple accouts is a big issue. At CES, Sony spoke of something like 36-39 million PSN accounts. Forget which, but that's more accounts than PS3s. We now some people created accounts just to get the free Transformers film!

Both companies have access to the unique consoles accessing them. I imagine those figures would be more accurate, but they're not given.

Yup,
I have 3 accounts on mine.

My brother has 4 on his as well.
I guess the more accurate way to track this would be PS3s that have connected on-line. The same should apply to the 360 unless there are multiple gold accounts per console. PSN is free so counting each account per console is pointless as it doesn't add any revenue.

 

[LordNerevar]

Do we know how many XBox Live Gold accounts are there?

EIDT: Found some info:

These non-gaming applications, such as Facebook, Netflix, Twitter and Zune equate to 50% of the Xbox Live audience. In addition, using the services requires having a Gold Xbox Live account, meaning that at least half of Xbox Live’s users pay for the service from Microsoft.

http://terminalgamer.com/2010/01/07/xbox-live-boasts-20-million-users/

 

[corduroygt]

Multiple accouts is a big issue. At CES, Sony spoke of something like 36-39 million PSN accounts. Forget which, but that's more accounts than PS3s. We now some people created accounts just to get the free Transformers film!

Both companies have access to the unique consoles accessing them. I imagine those figures would be more accurate, but they're not given.

I don't know anyone who only has a single PSN account, all my friends have multiple accounts. However, that PSN figure also includes PSP's, and I'd bet almost all PSPgo's would be included there too.