The PlayStation 4 Will Be Sold At A Loss
The plan for these consoles is and always has been to sell them at a loss. If your gaming unit has been losing money and your entire argument is you’ll make it up in software, your investors may not have the stomach for it, especially if the larger company is in trouble.
Apple
Well, Apple, Google, Linux, Vizio, OnLive, Steam, Origin, Ouya, but especially Apple.
Leaving aside the iOS problem, here’s a useful analogy. If the video game industry is Batman, Apple has the potential to be Bane, except instead of breaking the industry’s back and leaving it at that, Apple would also squash the head and burn the corpse before finding the Batcave, chucking Alfred down it, and filling the whole thing with cement. Which then explodes.
Laugh all you want: they’ve already done this. Twice. The music industry is broken to their will and currently American cell providers are breaking themselves to get at the iPhone… which is driving them out of business. Apple might actually own AT&T by the end of the decade.
The only thing saving the gaming industry right now is that Apple is a closed system and doesn’t care about gaming. There is no iOS Ouya in the works.
But the giant waking up is frankly only a matter of time. Apple can no more ignore the next wave of smart TVs and streaming boxes than Sony can. Streaming games is a key part of these boxes. And unlike Sony, Apple can rouse huge desire for its products and has way more money to throw at it.
Microsoft is used to fighting Apple and you’ll notice they’re bracing for it with SmartGlass and the Surface. Sony, though, has no weapons and now that it owns Gaikai, making a dedicated gaming machine may be less compelling if you can just work your gaming into your TVs as a feature. Why pick a fight with a company that outgrosses you when you can just quit while you’re ahead and stop eating those quarterly losses?
What do you think? Can the PlayStation survive?
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Here’s a sneak peek at the new Vita marketing campaign:
Actually, I think it’ll be more like those Craigslist ads where some guy bought a car without a title.
The way I remember it, albatross was a ship’s good luck, ’til some idiot killed it.
yes, and by killing it he brought bad luck and had to carry it on his neck as punishment
yes… I’ve read a poem
Nah, I don’t see Apple crushing games, if only because Steam’s already done to games what any sort of iTunes like application Apple could turn out. And the smart phone market is no longer solely the realm of Iphones now that Android phones are starting to turn heads.
At the risk of sounding old, I’m kind of sad watching the death of physical media to streaming. I think its a hell of a lot better to own an actual copy of something (be it file or disk) than to hope someone’s servers don’t crash.
I agree in some ways. For example, I’m never buying ebooks the way I buy real books. On the other hand I can’t say I’m deeply attached to games.
Totally agreed about physical media vs. streaming. I really don’t dig the whole streaming phenomenon at all. Digital downloads are one thing, but streaming… I just don’t think America’s got the web infrastructure to really make streaming widely viable yet. Not to the extent that local gaming is, anyway. (Let’s go, Google Fiber!) But I don’t see Apple making a big play for videogames. I’m sure they’ll eventually have some sort of games/appstore integration with Apple TV, but I don’t see them committing to it the way Microsoft has, buying game studios and exclusivity deals and making really powerful hardware. Although I wouldn’t bet a large amount of money on any of that.
Well the thing I don’t like about physically owning a game is that its not as simple to revisit as a movie or even a book for that matter. You’re not gonna pick it back up right away after putting 15-30 hours into it, and (depending on the game) if you hate it, that just cost you upwards of 50 or 60 bones. 10 of my favorite paperbacks were bought for that price.
Wouldn’t these all be every console’s problems, not just Playstation’s?
I could see some of these problems extending to the 360, but not all of them. I think (as in “I’m not 100%) that the 360 caters to more FPS and multiplayer than anything else, and they don’t have the same dependence on RPG’s as Sony *might* have. Also, the Wii is a separate beast altogether, but the argument could be made that when the WiiU comes out, not a lot of people are gonna ditch their Wii’s to pick it up. So, maybe the same problems with different levels of severity?
It was only a matter of time before the troll articles showed up…
You keep using that word. I don’t think it means what you think it means.
No one knows what will happen. Yes, Sony ran into trouble but a part of it resides with the recession as well. That doesn’t mean the PS4 will sell at a loss. That’s speculation.
Therefore it is a troll article. Don’t like my music? Don’t dance to it. The truth hurts.
Your follow-up shows your ignorance about the economics of gaming. With the exception of the Wii, every modern console ships at a loss on launch day. The XBOX 360 and PS3 both sold for at least $100 less than the costs of components inside them on launch day. As you get later in the console’s life-cycle, the cost of components comes down (Sony was down to losing only $30 per PS3 sold as of December 2009, and the XBOX 360 has also been redesigned a couple times since release).
The consoles are loss leaders. You can’t sell anything to someone who hasn’t already bought the console. So they sell that to you at a loss so that you’ll buy all the other stuff they make money on: controllers, memory sticks, add-ons, first party games, the licensing fee they get from second and third party games.
The Wii is an exception because it made money from day one. That should come as no surprise to the hardcore gamer who ignores the Wii because of its lackluster graphics. But Nintendo didn’t care what the hardcore gamer wanted. They sold 96 million Wiis worldwide by selling Wii Sports to old people and fanboys who want to play Mario and Zelda. And you can expect it to continue. Rumor has it the Wii U is going to cost $180 to produce and sell for $300.
I know, I know: tldr;
The point is that the PS4 *will* sell at a loss. That’s not speculation. That’s the facts of how the video game industry works for companies not named Nintendo.
DrPepperMD: Big talk with little evidence or facts to back up your claims. And yet you call me ignorant? To know what you’re talking about, you need to have evidence and facts to back it up, not fallacies.
Fail, yet again.
Please let me know when you’ve introduced a time machine to go into the future so we can see which console makes a loss.
Dude, DrPepperMD never said the PS4 would /make/ a loss, he said it would /sell/ at a loss, so they could make it up with the fees they get from games, and other things.
They can sell the machine at a $100 loss, and the money they make back on games means they break even if you buy ~4 games new (plus all the other things you’re likely to pick up like controllers and things).
All in all, unless it failed to sell at all well, then it wouldn’t make a loss, but it would be sold at a loss in the short term, until they can re-engineer, get chips smaller, get the mass-production costs down on new components to a point where they can make a profit.
It’s done in many industries and has been done for consoles for generations.
I clicked on this article sadly to see how the Playstation brand may die. Were almost headtohead with Xbox, but still not there yet. I love Playstation, and are OK with Microsoft. But… APPLE. We. Must. Not. Let. Apple. In. Gaming. Go kick their ass Microsoft for both of us
LongLivePlay.
The Playstation brand won’t die. What needs to die are these shitty articles.
lulz, you may actually be more right in that, chances are they may kill the playstation console, and incorporate gaming into tv, and spin off the Playstation as a games vendor, ala EA/Activision.
Who the hell uses PS3 as a media device!? PS3 is an awesome gaming machine, but when it comes to media, it’s completely ass. I’ve got a Acer Aspire Revo (Intel Atom based) PC hidden behind my TV running XBMC and it pisses all over the PS3. PS3 falls at the first hurdle; it doesn’t even see my file shares on my media server! How useless is that? Even if I can get media to it, it can barely play any of the file formats. What good is a media device that can’t play 95% of the available media?
I really don’t know which idiots are using PS3 this way. I love my PS3, but solely as a GAMING machine and NOTHING ELSE.
Also… Ouya will fail. Apple won’t succeed in gaming. Real gamers won’t substitute a TV for a tiny handheld screen and consoles don’t depend on the success of Japanese games. This article is just terrible.
Thank you, and good night.
Disagree – Ouya is basically an Android phone that runs 1080p for tvs, but it has already sold way past what it wanted to – that’s a success not a failure.
Many “real gamers” don’t substitute PC’s for consoles either.
But in the end, it’s likely that casual gamers would go for a smaller device that can handle the casual game market – and it would be interesting to see if enough of those could kill that market for console games, and lead to less investment in those.
Honestly, it could kill them, but I hope not, because I love the games we’re getting now and I can only dream of what the next round can give us graphically.
You forget that sell thru is still a 10 billion dollar a year business when it comes to video. Hardly chump change and larger than most industries in America. Physical media may not be for everyone but Many people prefer to own their media rather than rent. streaming is for renters, physical media and digital downloads are for sell thru.
Honestly the playstation/sony brand wont die lol. Of course there going to sell at a loss because every one is (not a fanboy but) will never change to a ps3 no matter how many great looking/story games it gets. It’s almost like no halo/gears than no deal. Just want to say this to I play my xbox/ps3 almost daily (when I can find the time) I understand every one is still scared about the hackers etc but now Sony is doing a lot better in the online department.
But of of course my comment has a lot of comebacks to it (against me) I just was saying my point.
The title of this article should read “Stupid People Like Awful Shit, Gaming Suffers”. As someone who’s been playing video games since the early 80′s this huge trend towards games being designed for people with a 5 minute attention span scares the crap out of me.