Analyst: Sony May Never Break Even On PS3

[wraggster]

DFC Intelligence president & senior technology analyst Wanda Meloni spoke at the GameON: Finance 2.0 conference in Toronto, weighing in the major console manufacturers' futures. According to a Gamasutra report from the event in Toronto, Meloni believes that Sony may never break even on the PlayStation 3 platform because of the losses incurred on each console sold.

Sony announced its quarterly results earlier today, showing improved PlayStation hardware sales, but ultimately posting a hefty loss.

We're unsure if Meloni was drinking the corporate Kool-Aid, factoring in the 10-year lifecycle Sony has planned for the hardware. Meloni also believes that Sony's slice of the console market share, at 67% during the PlayStation 2 era, will shrink to 50% or below.

http://kotaku.com/5070746/analyst-sony-may-never-break-even-on-ps3

[lmtlmt]

i thought they already broke even and were making profit?

[jamotto]

Nintendo is the only one who consistently makes money selling the consoles. Everybody else makes their money via the software sold.

[Triv1um]

Yeah, even if they make a little bit of a loss with the hardware. They will still make more back from the software sales.

Jamotto - So Nintendo is the only company making profit from their consoles?

[sorceror]

...the PS3 does seem to be doing better in terms of sales now. I think they'll get profitable before too long. The PS2 took a year to become profitable; Sony gambled on bigger hardware in the PS3, and that's slowing profitability.

Of course, Microsoft lost as much as $4 billion on the original Xbox, and even the 360 hasn't been a triumph considering the billion or so they've had to spend fixing their hardware missteps.

I don't think Sony's going to dominate the console market this time around, though. Price is a big factor, and people bought cheaper PS2s in droves in favor of the more-powerful XBox.