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Sony to sell PlayStation Vita for a loss, Profitable within 3yrs

Vinci

Danish
Oct 12, 2007
22,075
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United States
gofreak said:
They said less than 3 years, and I still think they were probably referring to it hitting hardware profitability sooner than PS3 did - which I think took 3 years. Without the context of the journalist's question it's hard to say.

But even if they did mean it could take up to 3 years to reach hardware profitability, I've little doubt the business overall will be profitable much sooner than that. It's fine to design things that make a loss on one end if the profits overall justify it.
Yes, those unknown profits. I'm not saying it cannot work. I'm saying it's extremely risky, following something like the PS3, to do it for this projected period of time. Some are assuming that they'll reach profitability sooner - what if they don't? What if they have to drop price on the thing out of schedule with their projections? For something like this to work, things have to go in a predictable and stable way, but that's hardly the case in the real world.

Sometimes it just seems like Sony creates products that depend on a very slight window of opportunity with little forethought as to how the hell they'll get out of it if that window is missed. And that concerns me for them. I like the company.

ToyBroker said:
You honestly think, going forward, Sony or Microsoft are going to close shop in video gaming? YA. FUCKING. RIGHT.


Gamers talking about all this business stuff is so ridiculous. 
Companies, even Sony and MS, have shareholders to answer to. I'm not suggesting that Sony will close shop on video gaming, but it's not impossible for them - or any other company - to collapse the same way Sega did. It is unrealistic, given the nature of this business, in which platform holders have dropped out one after another and other companies have fallen after reaching high heights, to assume any company is future-proof.
 

funkystudent

Member
Apr 3, 2010
29,270
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Vinci said:
They haven't.



Y
but havent they been making money on ps3 HW for a few years now? Pretty sure its been confirmed a few times.

considering it launched at 600 and cost nearly 900 to manufacture at the time and they are now making a bit of money on each on at 300 I thinks that pretty damn impressive.
 

Vinci

Danish
Oct 12, 2007
22,075
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United States
funkystudent said:
but havent they been making money on ps3 HW for a few years now? Pretty sure its been confirmed a few times.

considering it launched at 600 and cost nearly 900 to manufacture at the time and they are now making a bit of money on each on at 300 I thinks that pretty damn impressive.
Oh, you mean in that sense? Yes. I believe they sell each system for a profit at this point. I was commenting on how its earlier losses will never be recouped.
 

Drek

Member
Jun 10, 2004
6,725
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Angry Fork said:
PS1 and PS2 were both sold at a loss and recuperated, PS3 is the only one that fucked up for them. I will be supporting Vita day one, shit is monstrous and Nintendo needs a smack in the head to get them straight.
I bet if you could drag a real honest answer out of Sony's upper management they'd suggest that the PS3 worked out extremely well for them.

They used it as a Trojan Horse for blu-ray and yet despite saddling it with a huge out of the gate burden to carry it not only gave them a quick and decisive format victory over HD-DVD, it is now a very competitive console with the 360, which had a year head start and Microsoft leveraging all of its muscle behind stealing Sony's market.

Was it a good move for gamers? No, but for Sony having Blu-Ray quickly crush HD-DVD is far more valuable than any console war. Especially a console war against Microsoft who had all of their considerable resources aimed at supplanting Sony this generation.
 

Wazzim

Banned
Sep 21, 2009
11,432
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Dark Octave said:
Crazy how Sony is selling it at a loss and some people still think $250 is too expensive.
Those people probably don't know how shit goes in the tech world, $250 can never be too much if you really want it. Just save it up and be happy for the shit you get for your buck or stop complaining and don't buy it till the price drops.
 

Vinci

Danish
Oct 12, 2007
22,075
0
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United States
Drek said:
I bet if you could drag a real honest answer out of Sony's upper management they'd suggest that the PS3 worked out extremely well for them.

They used it as a Trojan Horse for blu-ray and yet despite saddling it with a huge out of the gate burden to carry it not only gave them a quick and decisive format victory over HD-DVD, it is now a very competitive console with the 360, which had a year head start and Microsoft leveraging all of its muscle behind stealing Sony's market.

Was it a good move for gamers? No, but for Sony having Blu-Ray quickly crush HD-DVD is far more valuable than any console war. Especially a console war against Microsoft who had all of their considerable resources aimed at supplanting Sony this generation.
Blu-Ray royalties will likely never make up for the losses Sony has sustained with that system, nevermind the fact that Blu-Ray would likely have won without sacrificing the video game market on its behalf. This has been discussed to death many, many times.
 

Cheech

Member
Aug 14, 2007
6,653
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Booshka said:
Every PS Vita owner better buy 15 games if they want this to work out.
Indeed. I literally am in disbelief that Sony has apparently learned nothing in the last decade. Launch at break-even or go home. Or in Sony's case, they seem to be hell bent on going out of business.

For the sake of the company, they need to turn it around in their other divisions, because they are going to continue to get killed on the gaming side with these dumb decisions. If I had Sony stock (which I don't, thank Christ), I would be blowing it out the door.
 

btkadams

Member
Feb 5, 2008
18,372
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835
lol @ people thinking sony is putting themselves out of business. pretty much everything they are doing with the vita makes complete sense, moreso than any of their strategies with the development and delivery of the ps3. this and the 3ds are going to be huge successes.
 

CadetMahoney

Member
Mar 14, 2009
16,828
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915
Cheech said:
Indeed. I literally am in disbelief that Sony has apparently learned nothing in the last decade. Launch at break-even or go home. Or in Sony's case, they seem to be hell bent on going out of business.

For the sake of the company, they need to turn it around in their other divisions, because they are going to continue to get killed on the gaming side with these dumb decisions. If I had Sony stock (which I don't, thank Christ), I would be blowing it out the door.
Well, they seem so adamant it will be a success. I hope they aren't using forum hype gauge as an indicator. But at least they're being honest and up front. They're in it for the long haul (PS3 route) instead of breaking even straight away.
 

Drek

Member
Jun 10, 2004
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0
Bending_Unit_22 said:
I would have made it 72 point font as well if I could.
A marginal pickup from their PSP demographic, for a superior, more competitively priced piece of hardware. Not unrealistic in the least.


Uhhhhhh, ok.
The PSP has a notoriously horrible attach rate and the Vita will likely be 1. more secure and 2. offer wide spread digital distro at competitive prices. With #1 we see what will likely be a significant reduction in piracy, which can't hurt retail sales in the least. With #2 we see how companies like Valve, CD Projekt (with GoG), etc. have all used convenience and accessibility to combat piracy and increase impulse purchases.

The numbers bear out that if you provide a reasonably priced, easy to use interface for media that doesn't constitute piracy people will pay for it. This has been done in music and its being done in games.

That could easily climb significantly. At its best the PSP had an attach rate of around 3. The current gen systems are doing about double that without counting their digital distro services. Adding that the Vita could definitely do 6+ games per unit by the end of its life.
 

TheExecutive

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Jan 3, 2009
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Drek said:
A marginal pickup from their PSP demographic, for a superior, more competitively priced piece of hardware. Not unrealistic in the least.



The PSP has a notoriously horrible attach rate and the Vita will likely be 1. more secure and 2. offer wide spread digital distro at competitive prices. With #1 we see what will likely be a significant reduction in piracy, which can't hurt retail sales in the least. With #2 we see how companies like Valve, CD Projekt (with GoG), etc. have all used convenience and accessibility to combat piracy and increase impulse purchases.

The numbers bear out that if you provide a reasonably priced, easy to use interface for media that doesn't constitute piracy people will pay for it. This has been done in music and its being done in games.

That could easily climb significantly. At its best the PSP had an attach rate of around 3. The current gen systems are doing about double that without counting their digital distro services. Adding that the Vita could definitely do 6+ games per unit by the end of its life.
Yeah, there is nothing insane about thinking the Vita will sell as much hardware and more software than the PSP. Didn't the PSP launch at $250 too?

In any case, the first year of both the 3DS and Vita will tell us whether the market has shifted as some suspect or there is still a viable handheld gaming market. I am not convinced either way atm.
 

gofreak

GAF's Bob Woodward
Jun 8, 2004
43,345
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1,645
Vinci said:
Yes, those unknown profits. I'm not saying it cannot work. I'm saying it's extremely risky, following something like the PS3, to do it for this projected period of time. Some are assuming that they'll reach profitability sooner - what if they don't? What if they have to drop price on the thing out of schedule with their projections?
Every company makes plans with assumptions that won't necessarily pan out perfectly.

Making a plan that incorporates loss making hardware isn't necessarily too risky to consider depending on the extent of the loss. For example, a small loss on Vita hardware would be easily recouped pretty quickly and could sustain bumps in the plan a lot better than multi-hundred-dollar losses per unit ala PS3.

I mean, the choice isn't PS3 or Nintendo in terms of options. There's a middle-ground, one Sony actually used to tread - manageable hardware losses in order to make more attractive hardware. I think Vita is just a reversion to that - far less risk than the PS3 approach, far less investment to re-coup, and much smaller loss on hardware. But it doesn't have to be NO loss to show 'learning' or smarts.
 

Drek

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Jun 10, 2004
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Vinci said:
Blu-Ray royalties will likely never make up for the losses Sony has sustained with that system, nevermind the fact that Blu-Ray would likely have won without sacrificing the video game market on its behalf. This has been discussed to death many, many times.
The dollars made over the lifetime of Blu-Ray pales in comparison to the money lost if it would've lost to HD-DVD. And a drawn out format war would have just as likely left both of them lying by the wayside, with the same end result as a loss to HD-DVD.

As a company that centers its business on the broader entertainment and technology industry Sony would have been seriously compromised if they were no longer a power player in new format decisions. Not just in the short term but for decades to come. They already let it happen to themselves when they fell grossly behind on LCD/Plasma technology. Making blu-ray the standard new generation format quickly and decisively was needed to keep themselves as a major power player in their real key industries.
 

Durante

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Oct 1, 2006
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dude said:
The Xperia Play has buttons.

But well, we'll have to see I guess - I stand by my words, I don't see a dedicated gaming platform having a justification in consumer's eyes.
I actually agree with you to some extent, just not on the timescale. The future portable gaming device will probably be a cell phone with buttons. And hopefully Sony will make a slider with a high-dpi OLED display that also plays Vita games. But until the technology is there to cram that into the cell phone form factor with good battery life (while actually playing games), I believe the Vita is a good transitional platform for hardcore gamers.
 

French

Banned
Apr 11, 2010
1,296
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Will buy one.

Glad they're not releasing a dated and overpriced product like Nintendo.
 

PistolGrip

sex vacation in Guam
Sep 7, 2006
6,523
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KingDizzi said:
This is Gaf, we're just here to have a laugh and you should not take what people say seriously, why give a fuck? Most people here don't know how to run a business, it's why they will always come on GAF and give business advice 10 minutes before their shift to flip burgers at Maccy D's. Not saying there's anything wrong with that, someone needs to make my McFlurry but yeah don't forget where you are.

I wuv u GAF, :D
You would be surprise at how many Gaffers are PhDs, Finance Directors, VP of Engineering at a financial services comp (myself) and even Marketing Directors and so on... Most of those guys hang out in OT though...
 

Jokeropia

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May 15, 2006
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JWong said:
The Wii isn't even going to reach the 100 million mark now that they're going to completely abandon it.
Haha, yes it will.
outunderthestars said:
All companies except for (greedy) Nintendo sell hardware at a loss at launch.....
Nintendo is also the only videogame hardware company who've really succeeded at profiting in the market.

Since Sony entered the videogame business in FY/E 1996, the total cumulative profits of the respective companies' videogame divisions are as follows:

Nintendo: $28 179 854 038
Sony: $764 722 988 (were at ~$5.4 billion prior to the PS3 losses)
Microsoft: -$5 122 000 000

In chart form.
staticneuron said:
If I am not mistaken the tie ratio for the DS was 4.5 as of last numbers and the PSP tie ratio is 4.2
Actually:

NDS: 5.73
PSP: 4.12

Total software sales:

NDS: 839.5 million
PSP: 298.6 million
Zoe said:
They said "within three years" not "three years straight."

And selling at a loss has worked for them 75% of the time.
But then, the one time it didn't work it wiped out nearly all the profits from the three times it did.
 

staticneuron

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Jul 7, 2010
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Jokeropia said:
Actually:

NDS: 5.73
PSP: 4.12

Total software sales:

NDS: 839.5 million
PSP: 298.6 million
Thank you! Even as such those are very good numbers for the console.

Drek said:
The PSP has a notoriously horrible attach rate

That could easily climb significantly. At its best the PSP had an attach rate of around 3. The current gen systems are doing about double that without counting their digital distro services. Adding that the Vita could definitely do 6+ games per unit by the end of its life.

The PSP has had a tie ratio around 4 for quite sometime and even compared to the DS its tie ratio isn't that bad at all. What the PSP seems to be notorious for is the amount of misinformation surrounding it, whether it is about sales or library offerings.
 

Jokeropia

Member
May 15, 2006
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staticneuron said:
Thank you!
You're welcome. The only problem is that the PSP numbers are based on a combination of "production shipments" (shipped from warehouses) and "unit sales" (sold to retailer, i.e the normal definition of shipped) so some units are counted twice, but the total shouldn't be that far off.

For reference, here's where these numbers can be found:

http://www.scei.co.jp/corporate/index_e.html
http://www.nintendo.co.jp/ir/en/index.html (Check latest Earnings Release, at this moment Fiscal Year Ended March 31, 2011. Shipment data is near the end.)
 

DMeisterJ

Banned
May 15, 2008
24,645
0
0
Wilmington, DE
Galvanise_ said:
Interesting. I wonder who is telling the truth.

Scott seemed very, very confident.
As was stated in this thread, both statements could be true. It could be a small margin on the system that will take them up to 3 years to make a profit back on for the whole shebang.
 

JudgeN

Member
Apr 12, 2007
3,961
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Chinner said:
file not found?
Works for me.

Interesting I find it funny everyone talk about how an iphone4 is less then $200 to produce for apple so why should the Vita be more then $250 for Sony? I don't think we fully know until alittle after launch but Scott says its not going to lose money day 1, you can't be more clear then that unless you believe him.
 

Amir0x

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Oct 27, 2004
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Phantast2k said:
So you hate Nintendo then? :eek:
Hate Nintendo? No. Nintendo has made 60% of all my favorite games.

I think they're the company you'd least want to lead the industry, however. They're very bad with consumers almost consistently across the board, except when it comes to fixing their hardware if it breaks. They're great at replacing that stuff for free.
 

M.D

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Feb 12, 2010
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750
Here's an interesting interview with Kaz. There's also a question about PS3 profitability

Q: Is the PS3 still profitable?

A: I always caveat this by saying that asking whether the hardware in itself is profitable or not is a moot point because we're not in the hardware business. We're in the entertainment business. We look at the totality between hardware, software and peripherals and whether it's profitable as a platform.

Having said that – because everyone is so interested – yes, we are profitable on the PS3 hardware and we'll continue to be profitable on the PS3 hardware, if it answers your question. (Laughs) Whether we're profitable or not in the hardware alone, that doesn't really address the bigger picture.
Could it be he was looking at it from the same prospective with the Vita? Or was he talkig specifically about hardware profitability in that interview?

Link
 

Amir0x

Banned
Oct 27, 2004
103,711
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dude said:
Giving back to consumers....?

WOW, WTF is wrong with you people. This sentence is utterly idiotic.

Sony is just as generous as any other company who's products you're willing to buy.
Except this is factually incorrect and the fact you sat down and wrote this down suggests I touched a sore nerve that puts your comment into suspect territory.

It's a fact that if a company sells me something at a loss and another doesn't, the one that is selling it at a loss is the one giving back to consumers.

They're taking a financial hit in order to deliver a product that is the best possible value. That's the facts. It may be estimated that this is the best way to ultimately make the product a success and thus in the best business interest of the company, but as a consumer the only thing I look at is:

How much is a company ripping me off?

In Nintendo's case or Apple's case, it is almost uniformly "severely." They refuse to give back to consumers. In fact up until recently Nintendo did not even have a Greatest Hits line, which was embarrassing. Sony and Microsoft have been giving back to consumers for years with loss leading platforms and greatest hits lines.

I'm sorry if this offends you but I won't say anything but the truth.
 

Drek

Member
Jun 10, 2004
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staticneuron said:
The PSP has had a tie ratio around 4 for quite sometime and even compared to the DS its tie ratio isn't that bad at all. What the PSP seems to be notorious for is the amount of misinformation surrounding it, whether it is about sales or library offerings.
Wow, didn't realize it picked up that much late in its life. Great. Further supports what I'm saying.

If the Vita is just an iterative step up from the PSP, a system that almost entirely catered to your stereotypical "gamer" and went against by far the most successful handheld of all time, it would be about as successful as the GBA. I'm sure Sony would be more than happy with that.
 

Drek

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Jun 10, 2004
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M.D said:
Here's an interesting interview with Kaz. There's also a question about PS3 profitability



Could it be he was looking at it from the same prospective with the Vita? Or was he talkig specifically about hardware profitability in that interview?

Link
He's just saying that they are now profitable on PS3 hardware but that Sony as a whole generally doesn't care about being able to say their hardware is profitable if its going to cost them in other ways.

If you gave Kaz and co. the choice between losing $10 on every PS3 sold and outselling the Xbox 360 2:1 this holiday season or making $10 per PS3 sold and only selling 1:1 or even 1.5:1 with the 360 I can guarantee they'd all jump at a loss producing 2:1 ratio.
 
Sep 13, 2007
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Amir0x said:
Hate Nintendo? No. Nintendo has made 60% of all my favorite games.

I think they're the company you'd least want to lead the industry, however. They're very bad with consumers almost consistently across the board, except when it comes to fixing their hardware if it breaks. They're great at replacing that stuff for free.
On the one hand I don't like seeing Nintendo lead the industry in the sense that they become overly confident and start making bad decisions (inflated price for modest tech, extreme conservatism on budget titles, etc.). Then again, Sony has shown they're not entirely immune to those sorts of problems either, and Microsoft hasn't yet pulled far enough ahead to give us an idea of how they'd react if placed unambiguously as market leader.

On the other hand, I think Nintendo's influence is one of the major things that's kept the industry from walking over the edge of a cliff in terms of sustainability this generation. A lot of people hated on the Wii for "holding technology back" (even I thought no HD capabilities was a misfire), but they're providing a counterbalance and helping temper consumer expectations in an era where the competition is taking stupid loses left and right and developers are folding because of the ballooning costs. In that respect I think Nintendo's leadership is vital. Besides maintaining profitability, which helps ensure their own longevity, they're also providing cover to Sony and Microsoft to ride out their current gen machines until they can offer something significantly more powerful at a reasonable cost.
 

Jomjom

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Amir0x said:
Except this is factually incorrect and the fact you sat down and wrote this down suggests I touched a sore nerve that puts your comment into suspect territory.

It's a fact that if a company sells me something at a loss and another doesn't, the one that is selling it at a loss is the one giving back to consumers.

They're taking a financial hit in order to deliver a product that is the best possible value. That's the facts. It may be estimated that this is the best way to ultimately make the product a success and thus in the best business interest of the company, but as a consumer the only thing I look at is:

How much is a company ripping me off?

In Nintendo's case or Apple's case, it is almost uniformly "severely." They refuse to give back to consumers. In fact up until recently Nintendo did not even have a Greatest Hits line, which was embarrassing. Sony and Microsoft have been giving back to consumers for years with loss leading platforms and greatest hits lines.

I'm sorry if this offends you but I won't say anything but the truth.
This all day.
 

J-Rzez

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Oct 19, 2005
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This has to scare ninty, and put the minds at rest for other console gamers. People were guessing that Sony would be more conservative with hardware so they don't take crazy losses on hardware. Then Vita was shown off and people expected $349.99 with all of it's features and tech, and we got $249.99 instead. Maybe Sony isn't taking a massive loss this time, but they're still doing their old ways.

So where this puts mine, and I'm sure many others minds at ease is with the PS4, that Sony won't be going ultra-conservative and releasing incremental upgrades hopefully as well.

The interesting thing is where will MS lay? If they're closer to Sony and they go with a substantial tech jump again, then ninty will most likely be in trouble again, and it'll be the PS360 vs Wii. They'll lack the high end AAA 3rd party support again while also relying on the casuals and hardcore nintendo fans to pull them through it.
 

Amir0x

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GrotesqueBeauty said:
On the one hand I don't like seeing Nintendo lead the industry in the sense that they become overly confident and start making bad decisions (inflated price for modest tech, extreme conservatism on budget titles, etc.). Then again, Sony has shown they're not entirely immune to those sorts of problems either, and Microsoft hasn't yet pulled far enough ahead to give us an idea of how they'd react if placed unambiguously as market leader.

On the other hand, I think Nintendo's influence is one of the major things that's kept the industry from walking over the edge of a cliff in terms of sustainability this generation. A lot of people hated on the Wii for "holding technology back" (even I thought no HD capabilities was a misfire), but they're providing a counterbalance and helping temper consumer expectations in an era where the competition is taking stupid loses left and right and developers are folding because of the ballooning costs. In that respect I think Nintendo's leadership is vital. Besides maintaining profitability, which helps ensure their own longevity, they're also providing cover to Sony and Microsoft to ride out their current gen machines until they can offer something significantly more powerful at a reasonable cost.
All I've seen of their influence is the destruction of Microsoft as a quality console developer and the wasting of Sony funds on garbage gimmickware, so as far as I'm concerned the Wii/DS gimmick philosophy has been nothing but a corrosive thing. And the Wii has held back scores of games in the SD generation, which is another negative influence.

I don't care one bit about how many casuals are in the industry, I only care which company is going to make the games I want to play and which company is going to do it at the most reasonable price for what they're offering.

Like I said I love Nintendo games, but if third parties actually bent to their stoneage philosophy we'd still be getting most of our titles in SD, we'd be forced to use the not-ready-for-primetime Wiimote in all major releases, we'd be forced to utilize a crippled online infrastructure, etc etc.

The one positive thing is that even though Nintendo is the sales leaders, developers blessedly saw the massive problems with Nintendo's direction and avoided allowing the industry to be held back.
 

Curufinwe

Member
May 20, 2009
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Vinci said:
Selling at a profit has worked for Nintendo every single time, and they've lasted in this industry longer than anyone. This isn't by chance.
Sony sold PS2 at a loss at launch and made a lot more money from their PS2 business than Nintendo made from the GameCube. I don't know why you keep insisting that selling Vita at a loss is an incredibly ridiculous move without having any figures to back that up.
 

dude

dude
May 18, 2007
6,988
1
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Tel Aviv, Israel
Amir0x said:
Except this is factually incorrect and the fact you sat down and wrote this down suggests I touched a sore nerve that puts your comment into suspect territory.

It's a fact that if a company sells me something at a loss and another doesn't, the one that is selling it at a loss is the one giving back to consumers.

They're taking a financial hit in order to deliver a product that is the best possible value. That's the facts. It may be estimated that this is the best way to ultimately make the product a success and thus in the best business interest of the company, but as a consumer the only thing I look at is:

How much is a company ripping me off?

In Nintendo's case or Apple's case, it is almost uniformly "severely." They refuse to give back to consumers. In fact up until recently Nintendo did not even have a Greatest Hits line, which was embarrassing. Sony and Microsoft have been giving back to consumers for years with loss leading platforms and greatest hits lines.

I'm sorry if this offends you but I won't say anything but the truth.
What nerve could you possibly think you've hit? The only think that angered me about your post was the twisted way you interpreted this. What suspect territory, exactly? What sort of bias do you think I have? I have no stocks in any company, I don't own any current gen console, I do have a DS (though I rarely play it), I own a PS2 and I own no Apple products.

All companies "give back to consumers" - You pay them, you get something back. You're implying that Sony are somehow more dedicated to their customers and give them more than other companies because they're willing to use a particular strategy on their product and sell it at an initial loss. The facts are that Sony are willing to brace some financial hits initially, and expect profits later. This is not new for many companies, but it's not always the best strategy and it certainly doesn't mean Sony cares about you more than any other company. Why? A company is only ripping you off as much as they can - This is a constant rule, no one will sell you anything for less than what you're willing to pay for it, and no one could sell you something for more than you're willing to pay for it. Apple sees that they can sell their product at higher and higher price points and people will buy it - Sony believed that people won't be willing to buy their product for more than 250$, so their only option was selling at an initial loss. Nintendo sells you worse hardware for the same price because they saw that they can (though with 3DS sales, they might have predicted wrong). Microsoft sells hardware at a loss because they have too.

If you want to think Sony is giving back "more" to consumers by selling you a product for the price point the market the demands, be my guest, I guess. But I just think this is downright idiotic - Every company is giving you the same thing - What you're willing to buy in the price you're willing to pay for it. It might be giving back more to you, but that's a given if you're willing to buy the product.

So really, I just see it as a dumb comment.
 

lantus

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Apr 15, 2009
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I have a feeling they will be profitable before that estimate. I think at that price the value proposition is very very compelling, way more than the 3ds I think, and I don't think I'm alone on that.
 

Jokeropia

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Curufinwe said:
Sony sold PS2 at a loss at launch and made a lot more money from their PS2 business than Nintendo made from the GameCube.
Nintendo actually made more money than SCE during the PS2/GC/XBX gen. (Chart in post #480.) It's a bit hard to compare since Nintendo also had the GBA, though.
 

Amir0x

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dude said:
What nerve could you possibly think you've hit? The only think that angered me about your post was the twisted way you interpreted this. What suspect territory, exactly? What sort of bias do you think I have? I have no stocks in any company, I don't own any current gen console, I do have a DS (though I rarely play it), I own a PS2 and I own no Apple products.

All companies "give back to consumers" - You pay them, you get something back. You're implying that Sony are somehow more dedicated to their customers and give them more than other companies because they're willing to use a particular strategy on their product and sell it at an initial loss. The facts are that Sony are willing to brace some financial hits initially, and expect profits later. This is not new for many companies, but it's not always the best strategy and it certainly doesn't mean Sony cares about you more than any other company. Why? A company is only ripping you off as much as they can - This is a constant rule, no one will sell you anything for less than what you're willing to pay for it, and no one could sell you something for more than you're willing to pay for it. Apple sees that they can sell their product at higher and higher price points and people will buy it - Sony believed that people won't be willing to buy their product for more than 250$, so their only option was selling at an initial loss. Nintendo sells you worse hardware for the same price because they saw that they can (though with 3DS sales, they might have predicted wrong). Microsoft sells hardware at a loss because they have too.

If you want to think Sony is giving back "more" to consumers by selling you a product for the price point the market the demands, be my guest, I guess. But I just think this is downright idiotic - Every company is giving you the same thing - What you're willing to buy in the price you're willing to pay for it. It might be giving back more to you, but that's a given if you're willing to buy the product.

So really, I just see it as a dumb comment.
Sorry you wrote all this for no reason.

The rule is simple:

The more value a company puts into their product, the less they sell it for, the more they're giving back to consumers. I don't care how it translates into a strategy to eventually retain profitability, because the end result is a better value for the consumer and thus, by its very definition, factually more given back to me, the consumer.

This extends to the way companies treat consumers with the value they give in their software, such as with the Greatest Hits line.

Not only is it self-evidently false that every company is giving me the same - Nintendo has massively overcharged for their 3DS and Wii and Apple has massively overcharged for all their products and trust me I've internalized this fact - and Sony and Microsoft haven't. They've consistently pumped their products with value while simultaneously loss leading. That's more value for the consumers, that's more giving back to the consumer, that's more for me. Period.

The end result is something that is unarguable: Sony and Microsoft are giving me MORE for my dollar.

If that offends you it's best you just move on since your logic on this situation is bizarre, if not entirely unhinged.
 

Parch

Member
Oct 17, 2005
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It's going to get spun to fit agendas.
PSP overpriced = fail.
Vita underpriced = fail.
I see a trend.

I'm just a consumer. I don't really care about a companies profit margin. I want good value and that's all I want. If their business decision doesn't make them rich then so be it, and even though the PSP was considered a fail, they didn't abandon it. Once a company commits to a product they usually deliver at least adequate value.

And as a consumer I'm also annoyed when I feel a company is ripping me off. I'm not willing to overpay for mediocre crap just because I want a company to succeed. To hell with their stockholders. I'm not a stockholder, but I'm always surprised how many GAF are so concerned about a companies success or failure instead of thinking like a consumer.

To me Vita is good value. I have confidence based on history and support that good games will follow regardless of Sony's profit margin. Sony isn't going to self destruct if they don't make a fortune on the Vita. As a consumer I think they've offered a quality product at a quality price, and I'll commend them for considering the consumer and not trying to cash grab as much as they can get from the marketplace.
 

dude

dude
May 18, 2007
6,988
1
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Amir0x said:
Sorry you wrote all this for no reason.

The rule is simple:

The more value a company puts into their product, the less they sell it for, the more they're giving back to consumers. I don't care how it translates into a strategy to eventually retain profitability, because the end result is a better value for the consumer and thus, by its very definition, factually more given back to me, the consumer.

This extends to the way companies treat consumers with the value they give in their software, such as with the Greatest Hits line.

If that offends you it's best you just move on since your logic on this situation is bizarre, if not entirely unhinged.
Ugh. You see: The value of a product is decided by the consumer. If the feature is of no interest to anyone, no one will see it as an added value - even though the product has this new feature and the company has invested money in it. The value to the consumers is the same - They'll buy it for what they think it's worth. If Sony sells the thing for 250$, it's only because that's what they predict the consumer values their product. This is not more nor less than the price any other company gives it's products - what consumers are willing to pay for it.
To you, specifically, the Vita features are very important so you're getting a lot of value for 250$ - But using the term "consumers" in general is silly.
 

Drek

Member
Jun 10, 2004
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Jokeropia said:
Nintendo actually made more money than SCE during the PS2/GC/XBX gen. (Chart in post #480.) It's a bit hard to compare since Nintendo also had the GBA, though.
That and Sony's 1st party studios only came into their own later in that generation while Nintendo dominated the Gamecube's software sales.

Nintendo's business model absolutely rocks for them, and they deserve all the "it prints money!" praise you can heap on them for it. They create platforms on which they can dominate the software market and sells millions with every release. But when it comes to giving consumers the best value they don't even try to compete.

Goes back to the adage that has been true since the N64. If you want to play Nintendo games you are a slave to Nintendo's hardware decisions, for good and for ill. Their core titles are the elite of the elite in gaming and that keeps gamers crawling back, but it doesn't make them even remotely friendly on the hardware side of things.
 

Amir0x

Banned
Oct 27, 2004
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dude said:
Ugh. You see: The value of a product is decided by the consumer. If the feature is of no interest to anyone, no one will see it as an added value - even though the product has this new feature and the company has invested money in it. The value to the consumers is the same - They'll buy it for what they think it's worth. If Sony sells the thing for 250$, it's only because that's what they predict the consumer values their product. This is not more nor less than the price any other company gives it's products - what consumers are willing to pay for it.
To you, specifically, the Vita features are very important so you're getting a lot of value for 250$ - But using the term "consumers" in general is silly.
That's lovely.

It is an objective fact about the components Sony and Microsoft putting into their systems greatly exceeding the price they're selling it for. I don't care one iota what other retarded consumers think about the value; I only care about what I know as an educated consumer. What I know is Sony and Microsoft give back to consumers, and Nintendo and Apple don't.

Simple.

So, at this point, I'm starting to wonder even more why it matters to you that I try to disengage from this objective fact. Is it offensive to you that someone considers companies which give you more bang for your buck as more consumer-friendly? Are you angry that Nintendo or Apple is not in this category, having historically shat on consumers value-wise?