Stringer: PS3 [losses] probably won't be recovered; "as long as I live"

[Darkfalz]

Sony CEO, Sir Howard Stringer, has had a bit of a light-hearted chat with German news source Welt Online. He revealed that the $3 billion spent on developing the PS3 probably won't be recovered; well, "Not for as long as I live," he said. He had a good old chuckle about it though.

You've got to wonder at the wisdom of the amount of money spent on Sony's latest console endeavour, even though we're now pretty happy with the end result. I'm not sure Sir Howard is not playing a hand close to his chest here. Sure, that $3bn is NEVER going to earned from hardware sales of the PS3 - or at least not until it reaches PS2 levels of sales, which is now only a very distant prospect - but there's got to been a certain financial value on the high definition format war.

Sony has basically won that war, although Blu-ray hasn't yet succeeded in the same way as DVD. The PS3 was absolutely fundamental to that victory and the revenue that it will generate for Sony in the long term can only be guessed at.

Source

Stringer: Wii business model superior to PS3’sTim Ingham Today, 5:28pm
Comments (2)

Console won’t recoup losses ‘in my lifetime’, admits Sony boss

Sony CEO Howard Stringer has admitted that PS3 hardware sales aren’t ever likely to recoup the $3.3 billion losses the machine has already occurred.

In a wider interview, Stringer also admitted that he had played on a Wii – and said that Sony had “neglected to pursue” Nintendo’s audience effectively in the past.

He added that Wii "may [have] a superior [business] model" – despite calling it an "expensive, niche game device" in the past.

“The major difference lies in the fact that Nintendo makes money with the hardware alone, which may be a superior business model,” he said.

“But the Wii is not succeeding at our expense – it is not hurting us. We decided years ago to build a game console that offers much greater functionality. The Playstation 3 has an enormous processor; it is gradually emerging as the central server in our users' homes.”

Source.

Interesting. Discuss.

[Snarky]

Straight from the horse's mouth. They won 1 out of 2 battles. The torch has been passed this gen it seems. That's what happens when you neglect your base and neglect online gaming.

[BBM128]

I think the wording is key. It's entirely possible that the PS3 hardware itself will never sell enough to make up for the investment. However, software and accessory sales, along with mildly profittable hardware, could ultimately erase the $3.3 billion loss. Obviously, we're looking long term, though.

With that being said, though, perhaps it's not as grey a question as I'd like it to be... Who knows, ya know?

[goatmother]

I have to thank Sony for sacrificing profits in order to deliver the best console in gaming history to date

[diggumsmax]

This is what happens when you try to trojan horse your game console to win movie format war. Sure, it one the format war for them but at what cost to their gaming division? I'm really glad MS didn't wait a year to launch the 360 with HD DVD. They would have suffered the same fate (although it might have given them time to hammer out those pesky hardware issues).

[Stranger Danger]

Didn't the original xbox not make a profit as well? So they lost money on it, does it make it less of a machine in that fashion?

[james]

Sorry to bring another conversation into this thread, but I am surprised you have not responded to this post or the subsequent posts:

http://forums.highdefdigest.com/1155178-post56.html

So by you not responding, I am forced to believe you do not disagree with his assertions. Please stop stating the 360 has ANA/HANA scaler if you know it to be untrue.

[michealo]

can we discuss the pros and cons of selective quoting to smokescreen a rational meaning to an article?

"that $3bn is NEVER going to earned from hardware sales of the PS3"

yes, he mentions PS3 hardware sales specifically and even goes as far as to congratulate nintendo for making profits in this manner.

will software/accessory sales make up that $3bn? who knows.

[Stranger Danger]

Originally Posted by diggumsmax

This is what happens when you try to trojan horse your game console to win movie format war.

So by trojan horse you mean the people who bought it were hurt by it? I bought mine for games and blu-ray. Who was hurt by it? If Sony sent it in it won't be them. What the heck are you talking about?

[BBM128]

Looks like I wasn't the only one who spotted that...

[Badger3920]

You never know. You guys like to throw around blu-ray a lot to somehow try and embarrass the console - and if you're going to stick to those guns, you have to accept that some of the blu-ray royalties are definitely due, in-part, to the ps3. That, plus software, plus video and psn downloads, plus advertising revenue, plus (as bbm said) mildly profitable hardware.... Who knows.

I won't make any assumptions. It's very interesting to be mid-gen and many people are trying to treat it as if it's already over. Very odd. To make an analogy, many races are won, lost, and defined in the second half. It's good to be fast out of the gate, but you have to finish. How many of you watched the racing in the olympics??

[Snarky]

Originally Posted by goatmother

I have to thank Sony for sacrificing profits in order to deliver the best console in gaming history to date

If you think they willingly did that for the benefit of the masses, then you are sadly mistaken.

[Coren]

Originally Posted by michealo

can we discuss the pros and cons of selective quoting to smokescreen a rational meaning to an article?

"that $3bn is NEVER going to earned from hardware sales of the PS3"

yes, he mentions PS3 hardware sales specifically and even goes as far as to congratulate nintendo for making profits in this manner.

will software/accessory sales make up that $3bn? who knows.

This. It's quite clear they plan for the loss to be made through software/etc. Just not from hardware sales.

And I think we all knew this (or should have known this, the facts were there) in 2006.

[AnimalMother]

So if the Xbox project is $6,500,000,000 in the hole, would Stringer have to live twice to see that recovered?

[Coren]

Originally Posted by Snarky

If you think they willingly did that for the benefit of the masses, then you are sadly mistaken.

If you think that he thought that, then you are sadly mistaken.