Current Events > Sony is selling the PS5 at a loss, investors are told

(+) Yeah! (+)

https://www.polygon.com/2021/2/3/22264242/playstation-5-sales-loss-manufacturing-costs-msrp-sony

Sony shipped more than 4.5 million PlayStation 5s from the consoles Nov. 12 launch to the end of the year, but it took a loss on those sales because the PS5s strategic price point is lower than what it cost to manufacture it.

The disclosure was part of Sonys quarterly report to investors, delivered in Japan earlier today. The losses on PS5 sales were not specifically broken out and they were part of an overall Game & Network Services Segment that saw a 26.7 billion yen ($2.5 billion) increase in operating income over the same quarter in 2019.

Sonys PlayStation revenue from game sales (both PS4 and PS5, add-on content included) plus larger profit margins on the outgoing PlayStation 4 more than made up any shortfall, the company said.

By comparison, the PlayStation 4 sold more than 4.2 million units from its November 2013 launch to the end of that year. The company in November said the new PlayStation 5 is facing unprecedented demand, making its availability scarce, even though more PS5s have been available, in whole numbers, than their predecessor. Microsofts Xbox Series X has faced the same issue, with the companys chief financial officer telling investors back in November that a console shortage could last until April.

Bloomberg reported as far back as February 2020 that scarce components had driven the manufacturing cost of the PlayStation 5 to $450. Analyst Michael Pachter, in an October interview, speculated that Sony would break even on the $499 PlayStation 5, but lose money on the $399 Digital Edition that lacks an optical disc drive.

Elsewhere in Sonys financial report, the company increased its forecasted sales and operating income for the PlayStation division over the fiscal year ending in March. Sony now expects another 30 billion yen ($285 million) in sales from its Game & Network Services segment, and an additional 40 billion yen ($380 million) in operating income for the yea

Sony also reported a PlayStation Plus subscriber base of 47.4 million users, with 114 million monthly active users of the service as of the end of the year. r.ear.

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I thought every non-nintendo console since the 360 was sold at a loss?
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Smashingpmkns posted...

I thought every non-nintendo console since the 360 was sold at a loss?

Yeah pretty much
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I guess the Xbox Series X forced them to.

Smashingpmkns posted...

I thought every non-nintendo console since the 360 was sold at a loss?

I'm pretty sure PS4 was sold at a profit. Don't remember if Xbox One was.

Actually nah looking it up it's a $60 loss for the PS4.

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sony winning

Hurry and bring that $70 Uncharted 5 with ray tracing

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I thought that every console was sold at a loss, with the money made up in software sales and improvements to manufacturing yields in later years. The PS3 was $600 when first launched, but you know it cost more than that (Blu-Ray players were more expensive than that) to produce.

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so put the games on PC too to get extra profit

DarthAragorn posted...

so put the games on PC too to get extra profit

gotta protect IP even if it kills it

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Dark_SilverX posted...

gotta protect IP even if it kills it

Except for those games that they did put on PC.

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And since scalpers are buying them all they don't have as much coming from software sales

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Irony posted...

And since scalpers are buying them all they don't have as much coming from software sales

Digital games dominate game sales this gen and the margins on these sales are very strong compared to physical games.

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Dark_SilverX posted...

gotta protect IP even if it kills it

This doesnt sound as clever as you think it does.

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Good news
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Naysaspace posted...

Digital games dominate game sales this gen and the margins on these sales are very strong compared to physical games.

Digital and physical are both software

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Yeah, makes sense. Especially those digital only consoles. Sony will make a killing off the psstore, look how much money valve makes off steam.

Every console gets sold for a loss.

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Dark_SilverX posted...

gotta protect IP even if it kills it

Yeah, this is definitely gonna "kill" them, after the biggest console launch in history

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Their fault for fucking up the supply

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BudDupree48 posted...

Their fault for fucking up the supply

You presumably aren't illiterate, why pretend

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RebelElite791 posted...

You presumably aren't illiterate, why pretend

I didn't read the link but I do know that the hype has died down because of the scarce supply and losing faith in their ability to make them available. I got beef with ps5 right now. I still love my ps4

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sounds like it's barely at a loss and that's only cause of the digital one. the main one they should be breaking even on or slight profit if it was the reported $450 to make. it's not like it's the ps3 and it was a huge loss. quick google search i'm seeing 20gb ps3 was $805 to make. 60gb was $840. so that's $240-300 loss per console if those are true numbers.

Are the Xbox Series and Switch being sold at a loss?

As was that case for the past generations
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It's always like this. The money comes from games and PS+.

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Irony posted...

Naysaspace posted...

Digital games dominate game sales this gen and the margins on these sales are very strong compared to physical games.

Digital and physical are both software

You realize there is a significant cost difference in producing something that has a physical form vs does not right
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