Almost below cost?

Post #101,774

5/14/03 12:19:39 AM

Almost below cost?

They originally were losing $100 per box, but now they're selling the boxes for less. Sony isn't losing nearly so much because their box can be made for a lot less - Microsoft's is basically a PC.

The economics is, you bomb the box and make your money on royalties paid by the game programmers, but XBox has failed to generate enough developer interest, buecause the volume is poor.

Nontheless, Microsoft will continue with XBox and new versions of XBox because it's their entry point to take over home electronics, home entertainment, home communications and control of the appliances (universal plug-and-play). They are going to take horrifying loses for as long as it takes, or until they are defeated.

[link|http://www.aaxnet.com|AAx]

Post #101,793

by static

5/14/03 7:46:21 AM

I heard that a little differently.

Specifically, that Sony sold the PS2 initially at a profit - just. Microsoft intended to do so, too, but they launched the Xbox just as the first PS2 price cut hit, which Sony did because they had made back enough on the hardware that by then it was cheaper to make. So Microsoft had to sell the Xbox at a loss right from day one.

Wade.

Is it enough to love
Is it enough to breathe
Somebody rip my heart out
And leave me here to bleed

Is it enough to die
Somebody save my life
I'd rather be Anything but Ordinary
Please

-- "Anything but Ordinary" by Avril Lavigne.

Post #101,808

by jake123

5/14/03 9:38:51 AM

Note on your .sig

Avril Lavigne is a Napanee girl... half an hour west on highway 2 from where I am right now. I've played the Paisley three or four times (bar that has bands in Napanee), though she was waaaayyyy too young to have seen any of the shows I did there.

Funny thing... the US music press seems to be having trouble figuring out if she's trying to be punk or grunge... they just don't get that the dichotomy is a false one in small town SE Ontario. She's neither punk nor grunge... she's a hoser.

--\n-------------------------------------------------------------------\n* Jack Troughton                            jake at consultron.ca *\n* [link|http://consultron.ca|http://consultron.ca]                   [link|irc://irc.ecomstation.ca|irc://irc.ecomstation.ca] *\n* Kingston Ontario Canada               [link|news://news.consultron.ca|news://news.consultron.ca] *\n-------------------------------------------------------------------

Post #102,011

by static

5/15/03 7:53:18 AM

Yep.

She even says it in one of her songs (not the one I quoted). You may have missed [link|http://yceran.org/static/article.qf?popmusiccanholdsurprises|my article about her album]. As you noticed, she refuses to be pigeon-holed.

Wade.

Is it enough to love
Is it enough to breathe
Somebody rip my heart out
And leave me here to bleed

Is it enough to die
Somebody save my life
I'd rather be Anything but Ordinary
Please

-- "Anything but Ordinary" by Avril Lavigne.

Post #101,837

by SpiceWare

5/14/03 11:38:18 AM

Gord comments on PS2 profits

[link|http://www.actsofgord.com/Proclamations/chapter02.html|The Legend vs. The Myths!]

Unlike Sega and MS, Sony is an R&D hardware company. They make a lot of things. In designing up the PS2, they spent a lot of cash. Then they spent a hell of a lot more cash to build things like the chip foundries to produce the chips for the PS2.

In the end, before the first PS2 rolled off the production line for consumers, Sony had spent $2 billion! TWO BILLION!

Then we look at Sony's stock report for Oct-Dec 2000, and there is an interesting little blurb. It said that had Sony been able to meet demand with another 1 million PS2 units, they would have pocketed $175 million in profits. $175 million divided by one million consoles equals $175 per console profit.

Now, that is a bit high. This assumed that the average consumer continues to buy four games per console (so around $24 in royalties), and 2 accessories (about $30 in profit total). That reduces the $175 to about $120. Sony is making $120 profit per system.

[link|http://www.actsofgord.com/index.html|Acts of Gord] is an interesting site.

Darrell Spice, Jr.                      [link|http://www.spiceware.org/cgi-bin/spa.pl?album=./Artistic%20Overpass|Artistic Overpass]\n[link|http://www.spiceware.org/|SpiceWare] - We don't do Windows, it's too much of a chore

Post #101,896

by Andrew Grygus

5/14/03 5:12:20 PM

See, I was right . .

Making a profit is a lot less loss than Microsoft's.

[link|http://www.aaxnet.com|AAx]

Post #102,009

by static

5/15/03 7:50:53 AM

That would be it.

That or something essentially the same. It probably was Gord, now that I think of it. He's a funny guy.

Back when the PS2 was a certainty but not out yet, I read a story in a games mag about how SCEI made and sold the original PlayStation as a bit of an experiment. They had *no* help from Sony Corporate, but that was deliberate: Sony Corporate was *very* interested in how it would do but wanted it to succeed without big momma's deep pockets. Or something like that.

So, came time to consider an upgrade and Sony Corporate said to SCEI, "You run it, we fund it."

Wade.

Is it enough to love
Is it enough to breathe
Somebody rip my heart out
And leave me here to bleed

Is it enough to die
Somebody save my life
I'd rather be Anything but Ordinary
Please

-- "Anything but Ordinary" by Avril Lavigne.

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