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[Gamer_By_Proxy]

Like a Dragon and Prince of Persia getting outsold by Suicide Squad is disappointing. Get better tastes people!!!

 

[mckmas8808]

The real numbers tell a significantly different story (in favor of PS5).

PS4 Pro released @ $399 during late 2016, right alongside PS4 Slim @ $299.

PS4 Slim was then bundled with U4 and reduced in price to $249 during the BF 2016 week, however, much like the PS5 SM2 bundles, that bundle was available for most of the holidays at $249.

In contrast, PS5 has been $500 with Spider-Man 2 during the holidays, and that’s really about all there was for PS5.

These facts makes me so confused when it comes to Playstation's low profit margins. WTH is happening? Has inflation really hit corporations this bad?

 

[Clear]

These facts makes me so confused when it comes to Playstation's low profit margins. WTH is happening? Has inflation really hit corporations this bad?

Sony have invested in a lot of new hardware over the last few years, which is probably relative low margin due to global economics. Obviously if PS5 Pro is a thing, there's significant sunk-cost in there too. Even if retail production isn't starting until the new fiscal year they'll need a production run to upgrade and refresh dev-kits in advance.

Revenue isn't the issue, its great, The "problem" is capex generating that revenue, and that's naturally going to fluctuate based on many factors. For example even if staffing within first-party studios is constant, outsourcing and contract work is still going to be in flux based upon where in the dev process the majority of titles are. This normally can be well regulated but I expect that lockdowns and other disruptions may have created backlogs and shifted things around some.

A big obvious issue as well is them taking over Bungie, which was/is a huge expense that has yet to pay off.

Bottom line is that there are many reasons why this has happened. It could simply be a case of Jim wanting to set as much stuff in motion before stepping down and expected bumper sales in the holiday quarter to underwrite it.

Either way, it doesn't seem like a problem that's beyond fixing in relatively short order.

 

[mckmas8808]

Sony have invested in a lot of new hardware over the last few years, which is probably relative low margin due to global economics. Obviously if PS5 Pro is a thing, there's significant sunk-cost in there too. Even if retail production isn't starting until the new fiscal year they'll need a production run to upgrade and refresh dev-kits in advance.

Revenue isn't the issue, its great, The "problem" is capex generating that revenue, and that's naturally going to fluctuate based on many factors. For example even if staffing within first-party studios is constant, outsourcing and contract work is still going to be in flux based upon where in the dev process the majority of titles are. This normally can be well regulated but I expect that lockdowns and other disruptions may have created backlogs and shifted things around some.

A big obvious issue as well is them taking over Bungie, which was/is a huge expense that has yet to pay off.

Bottom line is that there are many reasons why this has happened. It could simply be a case of Jim wanting to set as much stuff in motion before stepping down and expected bumper sales in the holiday quarter to underwrite it.

Either way, it doesn't seem like a problem that's beyond fixing in relatively short order.

I've totally forgotten about the $3.5 Billion Bungie purchase. That no one seems to like to talk about when it comes to low margins with PS.

 

[Klayzer]

I've totally forgotten about the $3.5 Billion Bungie purchase. That no one seems to like to talk about when it comes to low margins with PS.

Yeah, it seems to get overlooked during financial discussions, concerning Playstation buisness. It's most certainly eating a large chunk of the profits.

Though, there was a report Sony had a substantial sum ear-marked for acquisitions.

 

[mckmas8808]

Yeah, it seems to get overlooked during financial discussions, concerning Playstation buisness. It's most certainly eating a large chunk of the profits.

Though, there was a report Sony had a substantial sum ear-marked for acquisitions.

I think they just said that they've paid off the last of the Bungie acquisition too. So profits should rise from here.