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PS5 loss making at launch (official)

Dec 29, 2018
4,069
11,940
745
Sold my Pro with 2 controllers with Spiderman and GOW for $400....

Folks are Thirsty.
Yeah well what do you expect folks to do.
You can only jack off so much and open so many porn site accounts until you reach a level of boredom whereby you sigh just looking at your cock.
It becomes a goddamn chore. Trust me I know.
It's more exciting washing the dishes finger fucking any hole you find in your kitchen utensils. It's a rush.
 

eyesabitdull

Member
May 10, 2020
1,080
1,789
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I thought that it was established that Sony makes profit off their software, or games, and the services provided more than their hardware?

Isn't also kinda why we got the PS5 DE? Because they knew that by having gamers buy the DE and funneling them through reliance on online stores and digital purchases, they would make up for the loss over time?

That's how I've always understood the situation. I think Sony learned a lot from the success of the PS4, and even the terrible start of the PS3. I think they know what they're doing.
 

Heisenberg007

Member
Nov 16, 2020
1,639
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Selling consoles at loss during around launch is standard practice. Only Nintendo sold Switch at a profit.
 
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Boss Mog

Member
Dec 12, 2013
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I don't think they actually took a loss on "every" PS5 sold in 2020, just the digital editions which were $100 cheaper. But the digital editions are guaranteed to make that money back since it forces the consumer to almost exclusively buy games via Sony's PS Store.
 

MrA

Member
Mar 9, 2020
1,315
2,264
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I thought that it was established that Sony makes profit off their software, or games, and the services provided more than their hardware?

Isn't also kinda why we got the PS5 DE? Because they knew that by having gamers buy the DE and funneling them through reliance on online stores and digital purchases, they would make up for the loss over time?

That's how I've always understood the situation. I think Sony learned a lot from the success of the PS4, and even the terrible start of the PS3. I think they know what they're doing.
About half of sonys revenue is subscriptions and dlc content (remember virtual currency is the ultimate in free money for them) hardware is tiny
 

oldergamer

Member
Aug 20, 2004
3,664
3,418
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I don't think they actually took a loss on "every" PS5 sold in 2020, just the digital editions which were $100 cheaper. But the digital editions are guaranteed to make that money back since it forces the consumer to almost exclusively buy games via Sony's PS Store.
Where is the doom and gloom if this was an xbox thread? Of course they took a loss on every ps5. A bigger loss on the digital version which still hardly seen as available...

Making money back on digital is dependent on other factors too. Like drive space. Again Imo they really only offered a limited amount of digital systems just to push the cheaper price point.
 

Negotiator101

Member
Jan 24, 2021
860
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Can’t say I’m too surprised, the tech in these consoles is far beyond the selling price.

I mean, all things considered, the digital edition might just be the biggest RRP tech bargain of all time.
Microsoft is not losing money on the Series S that's for certain.
 

sublimit

Member
Aug 28, 2009
20,957
9,772
1,310
This is nothing new. Even PS2 was initially selling at a loss.

Back then they only had physical software sales to balance that loss but now they can eat more "loss" due to more profit sources.
 
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Con-Z-epT

Member
Dec 3, 2019
1,217
2,480
470
It is probably losing a lot with PS5 DE.
The normal model is probably breaking even.

PS5 DE should be near $100 per unit.
If they sold 1m then it is $100m loses.

They need a lot of game sales to recover it.
Thats just guessing.

Where did you get this from?

It is not just game sales. Don't forget their subscriptions.
 

FranXico

Member
Dec 7, 2010
13,666
26,555
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Yep, even at stores like Walmart are still selling out the PS4 at $399 and I’m am so surprised by that. You would think that just because the PS5 is out people would be inclined to get a PS4. I have a funny feeling the PS4 will sell a little bit more until things calm down.
I'm holding on to my faithful old one for now. Getting down to my unfinished business with Bloodborne lately, having a blast.
 

sublimit

Member
Aug 28, 2009
20,957
9,772
1,310
I thought that it was established that Sony makes profit off their software, or games, and the services provided more than their hardware?

Isn't also kinda why we got the PS5 DE? Because they knew that by having gamers buy the DE and funneling them through reliance on online stores and digital purchases, they would make up for the loss over time?

That's how I've always understood the situation. I think Sony learned a lot from the success of the PS4, and even the terrible start of the PS3. I think they know what they're doing.
Yes we do know that but being logical is boring and you've to admit "PS5 loss making at launch" is a great sensational title! :messenger_smiling_with_eyes: Perfect for fanboys and "journalists" to take it out of context!
 
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Sethbacca

Member
Jun 20, 2013
763
1,633
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You'd think they'd do a better job at launch of preventing scalping. That has to hurt the attach rates and sales of accessories and games, and thus their profitability right out the gate. Especially given the limited supply of consoles available in the first place.
 
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Imtjnotu

Member
Nov 4, 2017
3,395
11,233
685
san diego
Still in the big picture of net income this last quarter:

Apple - $28 billion
MSFT - $15.5 billion
GOOG - $15.2 billion
Sony - $3.5 billion

Even though Sony is kicking MS a$$ in gaming, Microsoft is kicking Sony's a$$ period for the last 15 years.
No they aren't. Outside of the gaming division, what other division do they share the same space in and compete.

One is a tech giant.

Thrbither is a software Goliath
 

Three

Member
Oct 26, 2014
5,798
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It's amazing that there are people buying PS5s at $700+ from scalpers and Sony decided to sell at $399 at a loss just to avoid pissing people off.
 
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skit_data

Member
Nov 3, 2020
943
2,442
375
Happy that i got my hands on a PS5 DE, if the shortage is gonna continue for at least another 6 months they are probably going to keep the 80/20 split for SE/DE to keep up with the demand of SE.
 

Rayderism

Member
Mar 4, 2017
758
506
400
Cleveland, Ohio
So, they sell their consoles at a loss while making it nearly impossible to find, then screw up PSN to make finding the games and latest addons harder than ever. Yeah, Sony's got it all figured out, uh-huh, sure. :messenger_ok:
 
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fermcr

Member
Mar 24, 2017
825
1,252
470
Imagine not knowing how the video game console business model worked since the 90s

Lame excuse. Sony basically released the PS4 on a profit wiseass.

As for this console generation, Sony waited till the last minute for Microsoft to announce the Xbox price before adjusting the PS5 price. You can bet your ass the PS5 price was suppose to be higher.
 

fermcr

Member
Mar 24, 2017
825
1,252
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No. It was being sold at a loss on launch, "wiseass".


Links?... I also can get links wiseass.


Even the Switch wasn't sold at a loss when released.

Console manufacturers will only sell at a loss if they absolutely have to. Sony was "forced" to decrease the PS5 price at launch and sell it at a loss.
 
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Jan 7, 2018
1,992
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Can’t say I’m too surprised, the tech in these consoles is far beyond the selling price.

I mean, all things considered, the digital edition might just be the biggest RRP tech bargain of all time.

I was one of those who had hard time believing rumors that both next gen consoles would have NVMe SSDs in them. Both went from ~30 per storage drive to ~130. ~100 increase just for storage alone compared to previous geneartions. Both of those consoles are an incredible value. I know from financial pov dropping last gen versions doesn't make much sense, but we all would like true next g games as early as possible.
 

John Wick

Member
Jul 23, 2015
1,627
1,507
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United Kingdom
Still in the big picture of net income this last quarter:

Apple - $28 billion
MSFT - $15.5 billion
GOOG - $15.2 billion
Sony - $3.5 billion

Even though Sony is kicking MS a$$ in gaming, Microsoft is kicking Sony's a$$ period for the last 15 years.
Apple and Amazon are kicking MS a$$. So what?
Is that why Windows Phone was such a big success? Or Bing search?
 
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[Sigma]

Member
Sep 9, 2017
363
657
355
Links?... I also can get links wiseass.


Even the Switch wasn't sold at a loss when released.

Console manufacturers will only sell at a loss if they absolutely have to. Sony was "forced" to decrease the PS5 price at launch and sell it at a loss.
The link you provided was in May of that year, the link FranXico provided was in September which was closer to launch. Took some months before Sony started making profit off it, last I remember someone mentioning that was ZhugeEX I believe.
 
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Vae_Victis

Member
Mar 4, 2020
729
2,768
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Links?... I also can get links wiseass.


Even the Switch wasn't sold at a loss when released.

Console manufacturers will only sell at a loss if they absolutely have to. Sony was "forced" to decrease the PS5 price at launch and sell it at a loss.
Sony and Microsoft historically sell new consoles at a loss for at least 6-12 months after launch. Nintendo doesn't, they always want to hit the market selling the hardware at a profit.

You'd think they'd do a better job at launch of preventing scalping. That has to hurt the attach rates and sales of accessories and games, and thus their profitability right out the gate. Especially given the limited supply of consoles available in the first place.
The issue with scalping is that when it happens the console is already out of Sony's hands. A store doesn't care if their entire PS5 stock is being bought by a scalper, they have to sell it as the price Sony told them, so whoever buys it works for them (actually, selling to a scalper has a much higher chance of removing in practice your obligations in terms of warranty fulfilment, so they probably prefer it this way).

The only way for Sony to get rid of scalpers is to outbid them, either flooding the market with so many PS5s that it's impossible for all the scalpers combined to hold them for ransom for an initial fee with the purpose of reselling them at an inflated price, or to increase the RRP to begin with to a point where most people won't be willing to pay much more than that, and the revenue share for scalping gets so thin it's not worth it anymore. The former is impossible in practice, the latter would have other consequences in terms of market adoption (you can't keep selling at $600-700 forever, and you can't slash the price by $100-200 mere months or one year after launch, or early adopters will feel cheated).

In practice, the only way out of this situation (which is hitting mid-to-high end PC parts as well, BTW) is for demand to shrink back to normal levels, which won't happen until we are past Covid.
 

Alandring

Neo Member
Aug 20, 2020
47
53
180
It is probably losing a lot with PS5 DE.
The normal model is probably breaking even.

PS5 DE should be near $100 per unit.
If they sold 1m then it is $100m loses.

They need a lot of game sales to recover it.
But digital sales are far more lucrative for Sony than physical sales.
 

Hezekiah

Member
Jul 16, 2020
1,023
1,287
355
Yeah Blu-ray is like $10 as the component in bulk, who knows maybe only the DE is sold at a loss .. they know what they're doing ..
$18 according Leadbetter, but you can see why they are manufacturing more dissc versions, especially given that most people will buy digital games nowadays anyway.