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[M3wThr33]

Wow. Thanksgiving just became hell.
My uncle, who makes molds for hub caps of cars, insists that Sony is still making a profit on the PS3, they're just showing a loss on paper.
Standard crap, artificial shortage, over-reporting cost, loss to avoid taxes...

*sigh*

 

[Alex Anderson]

Pretty hellacious.

Eat some pie.

 

[Son of Godzilla]

Of course they are making a profit producing em. It's just that for the last 3-4 years they've been losing money developing the damn thing.

 

[StoOgE]

Alot of people think holiday shortages are done on purpose for everything from Tickle Me Elmo, Cabbage Patch kids and videogame systems. Obviosly all of this stems from anger at not getting the hot gift for your kids that holiday.

It doesnt make sense though. If you were a major company and new you could sell 1 million systems on day 1 why would you release 200K? Sony doesnt give a shit if they are going for a million dollars on ebay, they dont get it.

Trust me companies want to get as many of these hot items out the door as they can.. because come March alot of these things (not really videogame consoles) will go from hot holiday item to no one giving a shit.

More importantly though, why the **** are you having fanboy wars with your family at Thanksgiving?

 

[Deku]

Well Sony CAN make money if they shift all their costs out of SCE into other divisions and hide it elsewhere.

How do you think Enron scammed the public.

 

[M3wThr33]

I already brought up the cost of developing the cell as being a huge chunk of that.

 

[Log4Girlz]

Most older people cannot conceive how an item which they perceive to be a toy can possibly be sold at a loss if its sticker price is over 500 dollars.

 

[Learn2read]

People actually talk about this stuff in real life?

IF so, yell "BAIL OUT" and jump out the top floor window, it'll be a hit...please.

 

[emomoonbase]

I wish I spent my thanksgiving arguing with my uncle about sony profit margins.

 

[StoOgE]

People actually talk about this stuff in real life?

IF so, yell "BAIL OUT" and jump out the top floor window, please.

Alternatively, hold a giant amusing picture of Shawn Michales or a Owl above your head that has nothing to do with anything.

 

[Galactic Fork]

Even not counting development, how much is the per-unit cost compared to the wholesale cost? Remember, Sony isn't selling the PS3 to retailers for 500 and 600, it's probably closer to 380 and 450.

 

[M3wThr33]

Oh dear god.



My dad runs his own business that our grandfather founded. He's the one agreeing with me.

They somehow think the cost of a guitar or hubcap is exactly parallel to the cost of computer components.

They don't comprehend the whole Xbox=Loss, 360=Profit concept, or PS3 + Emotion Engine until software is ready.
Also, my brother explained the yield of blu-ray diodes being at about 10% and my relatives called him a liar.

Console profit margins are very low, $5 at most, usually. Hence why stores force bundles, so they CAN make money selling it.

 

[Log4Girlz]

Even not counting development, how much is the per-unit cost compared to the wholesale cost? Remember, Sony isn't selling the PS3 to retailers for 500 and 600, it's probably closer to 380 and 450.

No its probably pretty close to 500, they don't give retailers that juicy a margin.

 

[emomoonbase]

Oh dear god.



My dad runs his own business that our grandfather founded. He's the one agreeing with me.

They somehow think the cost of a guitar or hubcap is exactly parallel to the cost of computer components.

They don't comprehend the whole Xbox=Loss, 360=Profit concept, or PS3 + Emotion Engine until software is ready.
Also, my brother explained the yield of blu-ray diodes being at about 10% and my relatives called him a liar.

What a bunch of idiots! Don't they realize ANYTHING!

 

[xaosslug]

how did this covo. even come about? Y'all should've been talking about how Dallas is BACK and Tony Romo is a demi-God. :lol

 

[Error]

ok?

 

[Galactic Fork]

No its probably pretty close to 500, they don't give retailers that juicy a margin.

I'm curious what the actual margin is, I was just pulling those numbers out of my butt.

 

[StoOgE]

No its probably pretty close to 500, they don't give retailers that juicy a margin.

This is correct. Thats why they try and force bundles.. its also why you see very few discounts in stores or sales on hardware.. you normally wind up with official price drops only. Stores carry the consoles knowing they can get some software sales down the road.

 

[Learn2read]

Alternatively, hold a giant amusing picture of Shawn Michales or a Owl above your head that has nothing to do with anything.

Our just draw a some up speech balloons with some cutely misspelled phrases and hold it above the family cat.

 

[Armitage]

I envy you. My relatives never talk about diode yields.

 

[Log4Girlz]

I'm curious what the actual margin is, I was just pulling those numbers out of my butt.

Someone posted a while ago the exact number for x360 and wii and proposed margins for ps3, wii is much healthier than the other two and its not even 20 dollars less expensive than MSRP.

 

[Log4Girlz]

This is correct. Thats why they try and force bundles.. its also why you see very few discounts in stores or sales on hardware.. you normally wind up with official price drops only. Stores carry the consoles knowing they can get some software sales down the road.

Exactly, the manufacturers want to guarantee a certain price, the bigger the margin the more enticing it is to unofficially drop the price. The big money makers for stores are software and peripherals.

 

[Galactic Fork]

Someone posted a while ago the exact number for x360 and wii and proposed margins for ps3, wii is much healthier than the other two and its not even 20 dollars less expensive than MSRP.

What? Retailers are barely making 20 bucks a unit? With the way software's going in japan, the retailers must hate sony right now. Well, maybe not, they're almost sure sellers and it's getting people in the store.

 

[Gahiggidy]

Wow. Thanksgiving just became hell.
My uncle, who makes molds for hub caps of cars, insists that Sony is still making a profit on the PS3, they're just showing a loss on paper.
Standard crap, artificial shortage, over-reporting cost, loss to avoid taxes...

*sigh*

Print this out. Shove it your uncle's face and promptly inform him that he's just been "OWN3D".

 

[Zombie James]

Playstation discussion over Thanksgiving dinner? Untapped market.

 

[Sephiroth]

You talk with your uncle about Sony's profits?

 

[argon]

My uncle, who makes molds for hub caps of cars

Well he's obviously well-qualified to comment on the console gaming industry.

 

[M3wThr33]

They seem convinced that all companies make money... I don't understand how they insist on this. Seriously...

Sega
Acclaim
Sierra

Print this out. Shove it your uncle's face and promptly inform him that he's just been "OWN3D".

Won't do shit. He insists that they lie about their numbers. He keeps going back to "I 'pay' Alberta $18 an hour" because he's over-reporting how much money his illegal immigrant makes.

Also, because it seems right:

 

[Bloodwake]

Just realize that your relatives are ignorant.

I did that a long time ago, it really helps to make the experience much better for everyone.

That, and the cheap red wine.

 

[Gahiggidy]

They seem convinced that all companies make money... I don't understand how they insist on this. Seriously...

Sega
Acclaim
Sierra

Do what I said and get back to us later with thier reactions.

 

[MrToughPants]

Did you tell them that the companies sell the hardware at a loss but make money from software and peripheral sales?

 

[SantaC]

uh this thread is pretty dumb

 

[OatmealMu]

uh this thread is pretty dumb

Which is why it's so great.

 

[M3wThr33]

Did you tell them that the companies sell the hardware at a loss but make money from software and peripheral sales?

My brother has been trying that for a while. But these old farts refuse to believe business runs any different then they are used to. My gramma's new husband *ugh* resells houses or some shit and is so set in his ways.

Old people aren't open to new ideas.

 

[Spire]

Wish my family talked about blu-ray diode yield rates around the dinner table.

 

[Son of Godzilla]

I don't get why you people are making like it's that big a deal. Videogames are pretty well-accepted culturally, and ever since the 360 ebay fiasco the launch phenomena is pretty widespread too. I've had two large family get togethers so far and each time the 360 and PS3 were brought up either in comments about the profit margin or related to Christmas gifts. Even heard talk about the Wii launch and the waggle wand. And it's not like I or anyone marginally into videogames are bringing these up.

 

[StrikerObi]

Alot of people think holiday shortages are done on purpose for everything from Tickle Me Elmo, Cabbage Patch kids and videogame systems. Obviosly all of this stems from anger at not getting the hot gift for your kids that holiday.

It doesnt make sense though. If you were a major company and new you could sell 1 million systems on day 1 why would you release 200K? Sony doesnt give a shit if they are going for a million dollars on ebay, they dont get it.

Trust me companies want to get as many of these hot items out the door as they can.. because come March alot of these things (not really videogame consoles) will go from hot holiday item to no one giving a shit.

More importantly though, why the **** are you having fanboy wars with your family at Thanksgiving?

Actually, you don't want to get as many on shelves as you can. You want to get as many on shelves that will sell. Also, you don't want to stockpile for too long because product sitting in inventory actually COSTS you money. Product launches are a tricky thing. Lots of people think companies like Sony should just over-produce and make as many as possible. In fact they don't want to, because that would cost them more money.

Now, as for the PS3 specifically, I'm sure they wanted more than they actually shipped, but they had a target number, and there would have been a shortage no matter what because demand is so high that in order to meet in adequately they would have to over-produce, thus losing money while stockpiling systems in their warehouses.

 

[Joe Molotov]

People actually talk about this stuff in real life?

Yeah, seriously, WTF? Watch a football game or something. Geez. :lol

 

[skybaby]

I envy you. My relatives never talk about diode yields.

:lol :lol

 

[Pimpbaa]

Old people aren't open to new ideas.

Not exactly an old idea, sell the razor at below cost, and make a profit off of selling the blades for the damn thing. Or for someone a bit more recent, sell a printer below cost of materials, and sell ink cartridges for retarded prices.

 

[Dr. Kitty Muffins]

Alot of people think holiday shortages are done on purpose for everything from Tickle Me Elmo, Cabbage Patch kids and videogame systems. Obviosly all of this stems from anger at not getting the hot gift for your kids that holiday.

It doesnt make sense though. If you were a major company and new you could sell 1 million systems on day 1 why would you release 200K? Sony doesnt give a shit if they are going for a million dollars on ebay, they dont get it.

Trust me companies want to get as many of these hot items out the door as they can.. because come March alot of these things (not really videogame consoles) will go from hot holiday item to no one giving a shit.

More importantly though, why the **** are you having fanboy wars with your family at Thanksgiving?

Thanks for giving th e forum a healthy dose of reality. Now if only you could post this in every dang thread as of late......

 

[AniHawk]

I've had customers insist on the same thing.

"Oh, you know they're actually making money off this whole thing. And you know they're just driving up demand on purpose."

Yyyyyyyyeah. This is pretty much a first-party's second-to-worst nightmare (the worst nightmare would be shipping so few with such a huge loss and NOT SELLING THEM)

 

[Hitokage]

Won't do shit. He insists that they lie about their numbers. He keeps going back to "I 'pay' Alberta $18 an hour" because he's over-reporting how much money his illegal immigrant makes.

Ask if he wants to have the same discussion with the IRS.

 

[∀ Narayan]

uh this thread is pretty dumb

You win!

 

[medrew]

Actually, you don't want to get as many on shelves as you can. You want to get as many on shelves that will sell. Also, you don't want to stockpile for too long because product sitting in inventory actually COSTS you money. Product launches are a tricky thing. Lots of people think companies like Sony should just over-produce and make as many as possible. In fact they don't want to, because that would cost them more money.

Now, as for the PS3 specifically, I'm sure they wanted more than they actually shipped, but they had a target number, and there would have been a shortage no matter what because demand is so high that in order to meet in adequately they would have to over-produce, thus losing money while stockpiling systems in their warehouses.

That's quite an overly simplistic viewpoint. Inventory is only bad if there is a net cost associated with it (just because something costs something to have in a warehouse doesn't mean that it is cheaper than having not made that product. Point being that by having more available they are able to sell more systems and games that generate benefits that outstrip any costs) or if there is the likehood that it won't sell -- thereby meaning they have very expensive paperweights; not the case with the PS3.
Arguably with a product like the PS3 some inventory is good, it means there is less pressure to chun those suckers out without the necessary care and testing during production. Recall/warranty costs are typically far more expensive than inventory costs. It is also a safeguard against any issues that may arise due to supplier shocks (e.g cell or lasers).

 

[thetrin]

I spent thanksgiving in Gyu Kaku eating all you can eat yakiniku, and all you can drink beer and umeshu with my neighbors. Then we played Gears of War and got drunk on margaritas.

I win.