sunnysideup
Banned
If ms takes a hit. sony needs to take a hit.
Otherwise they will loose half of their market.
Otherwise they will loose half of their market.
The AMD hardware-test leak that predicted the specs of the Xbox Series X (which thus far makes it the most accurate and credible leak we have regarding this new generation of hardware) squarely put Sony’s machine at 9.2TF.Because a 449-499 dollar PS5 with 2080+ levels of power, a good cpu, decent amount of RAM, ultra fast storage, and UHD-BR player will sell plenty and minimize loss per unit. These things cost money. Plain and simple. Standard SSDs are more affordable than ever but still not dirt cheap and the SSDs in these consoles are supposed to destroy SATA drives
These consoles are purported to be more powerful than single GPU cards that cost 499 or more, unless the PS5 really is just 9 TF, in which case they start the gen gimped to hell, and I doubt that’s gonna be the case. IF the PS5 is a 9 TF machine, then go for 399. I’ll still buy it but that’s gonna be a bummer in my mind
PS3 was 2006. Things have changed.
Don't be that guy, I made up example numbers to show that most revenue come from other stream than console itself.
But if you want to go that route. 385M is per year * 7 years = 2.695 billions.
50% are PS plus subscribers. 5.5M * 60$ * 7 years = 2.310 billions
That's more than 5 billions generated by those 11 millions over time not counting accessories, PS now, etc.
And the earlier you get them the more revenue you will generate over time.
And PS5 cost is estimated 470$ not 499$ so the lost is 770M$
My whole point is that it's fine to lose money per console the question is will Sony will go as far as losing 70$ per console, we'll see but it's greatly tied on Xbx price point.
Ok, sorry I don’t want to come across as a douche but I am a literal cost accountant so this is actually what I get paid to do for a living. And while I don’t know Sony’s specific internal data I can tell you that you are making some horrific baseline assumptions when you are calculating their revenue streams.
Firstly, the PS4‘s lifetime attach rate is very high for a console and it is only roughly 10 games...total not yearly. You assuming that the average PS5 consumer will buy 5 games a year is laughably high, it’s more like 2 at most and probably even less on average if you’re looking at a more price sensitive consumer.
Secondly, you can’t assume that 50% of new PS5 console sales will drive a new PS Plus user. The most recent data I could find shows that roughly 36% of PS4s have a PS Plus membership and not only that but many of your PS5 users will be migrating over from that service. If they drop the launch price and get people to buy a PS5 earlier, this is not an increase in revenue for them if the consumer would’ve been content to wait a year and play with PS Plus on their PS4.
You can’t just look at net revenue or gross margins in a vacuum...you need to look at those things against what you believe they would be given the alternative. Sony will never take a loss on the console at launch if they believe the alternative is selling the console for a profit to the price sensitive consumer at a later date when their costs go down and they can naturally lower price The math just doesn’t work. However, Sony could very conceivably take a loss on the console if they believe the alternative is permanently losing that customer to Microsoft.
5 games a year is laughable? Lol what? Stopped reading after that. Good job "Cost accountant".
If you think that 11 millions more console sold doesn't end up in more revue you really dont get console business model.
Sony main revenue isn't the PS4/PS5 at all. This is just a gate to lock you down in their ecosystem. Then the revenue are generated by game license, paid subscription, accessories, etc.
In that case the more console you put in consumer hands, the more you get revenue from that ecosystem
11 000 000 more console * 5 games a year * 7$ royality = 385M$
Also the bigger the audience the more likely you can attrack dev who will also pay licenses and buy dev kits.
I think we are pretty much in an arms race for the future, it's a great spot for us to be in with two giants battling each other for our support. There's a good chance that both PS5 and XSX end up at 399 because of that. They both want to sell their services and for that they need market share. That Microsoft talk about "we don't care where you play our games"? Forget about it, they don't want to sell Steam games, they want to sell Xbox Store games and Game Pass Ultimate. And above all else they want to position themselves for the streaming future. The more I think about the market, the more I think Phil Spencer is going for that same 1-2-punch that Sony did to Xbox One. With people expecting 500 and more for a 12 TF console a 399 at E3 will blow them away and they will kill it in preorders. You have to nail everything. The power. The games. The price. We have only seen one piece of the puzzle so far.If ms takes a hit. sony needs to take a hit.
Otherwise they will loose half of their market.
$399 is the sweet spot. It's a price that is affordable to many and would be great value for 8core zen 2, 8-10tflop, 16gb gddry and 1tb SSD.
If the aim is to sell as many consoles as possible, then a $399 console is the better way to do it, the most expensive and most powerful have never been the "winner" of a gen.
So if a $399 machine would mean greater prosperity for Sony why would they decide on a more powerful $499 console? It makes no sense!
$399 is the sweet spot. It's a price that is affordable to many and would be great value for 8core zen 2, 8-10tflop, 16gb gddry and 1tb SSD.
If the aim is to sell as many consoles as possible, then a $399 console is the better way to do it, the most expensive and most powerful have never been the "winner" of a gen.
So if a $399 machine would mean greater prosperity for Sony why would they decide on a more powerful $499 console? It makes no sense!
Selling consoles at a loss is generally bad business.
It's 2020 and $400 isn't enough anymore.
you should advise your mate to wait for series xInsane how good of a value consoles are compared to a PC.
Should've told my friend not to jump on that ship too soon
He told me he already has a mini-fridge in his roomyou should advise your mate to wait for series x
That's Xbox All Access...That's a good idea (lol I'm a dumb dumb)
Haven't Microsoft already done this with Xbox and gamepass? Gamepass platinum or something.
Agreed. I wish they launch with both PS5 and PS5 Pro.Because a 449-499 dollar PS5 with 2080+ levels of power, a good cpu, decent amount of RAM, ultra fast storage, and UHD-BR player will sell plenty and minimize loss per unit. These things cost money. Plain and simple. Standard SSDs are more affordable than ever but still not dirt cheap and the SSDs in these consoles are supposed to destroy SATA drives
These consoles are purported to be more powerful than single GPU cards that cost 499 or more, unless the PS5 really is just 9 TF, in which case they start the gen gimped to hell, and I doubt that’s gonna be the case. IF the PS5 is a 9 TF machine, then go for 399. I’ll still buy it but that’s gonna be a bummer in my mind
PS3 was 2006. Things have changed.
It's such a bad strategy that every single console manufacturer has always done it in the past three decades or so... You obviously have no clue of how the business works, abut the development costs alone, revenues from the hardware (if there is any to begin with) and software/service sells. The revenue reports are all there, publicly available each year and even each quarter, so maybe instead of spending all the time on posting your personal (irrelevant) beliefs and trying to act like a wise guy you should jus go read them and get actually informed on the topic?
He told me he already has a mini-fridge in his room
The time for that is gone already. The loss leading strategy happened a while ago, because they thought videogame consoles would take over the living room. And that was going to mean some SERIOUS business afterwards. Now we're in the age of the smartphone. Those extrapolations are no longer applicable.Eating almost $100 on each console might be tough. Need a high attach rate to make that up.
If ms takes a hit. sony needs to take a hit.
Otherwise they will loose half of their market.