Sony has lost over $3 billion on the PS3

This is interesting.

Sony has lost over $3 billion on the PS3 - Video Game Feature - Yahoo! Video Games

Doug

Re: Sony has lost over $3 billion on the PS3

And?

Re: Sony has lost over $3 billion on the PS3

Just thought it was interesting. I happen to own one myself.

Doug

Re: Sony has lost over $3 billion on the PS3

Wow.

We own one too. Have yet to play a game on it.

Re: Sony has lost over $3 billion on the PS3

How much of that $3bn do you think Sony have clawed back in software sales through Blu Ray DVD and (in particular) Games?

These are both high profit margin assets of the PS3 - Sony's policy on selling the PS3 hardware at a loss is subsidised because they can claw much of it back on software.

However, make no mistake. If Blu-Ray had been developed by any corporation other than Sony, it - and perhaps with it the PS3 - would have long since perished.

Re: Sony has lost over $3 billion on the PS3

Either I've lost my mind or a post I made in this thread was deleted?

[Edit]

It's appeared again? Must be a problem with my connection!

Re: Sony has lost over $3 billion on the PS3

I suspect they maybe starting to make money on Games, but I doubt seriously that they are on blu-ray movies yet.

Doug


I have exactly 2 games that I have played once each.

Doug

Re: Sony has lost over $3 billion on the PS3

SONY stubbed their toe big time by having such a weak starting line up of games. They focussed so much on the Blu-ray side of things that they forgot that the majority of purchasers of the system would be playing games first and watching movies second.

I like the system well enough but it is also a perfect demonstration of why "convergence" boxes may not necessarily be the holy grail that CE companies think they are. As a movie player, I have noted some weaknesses. The lack of analog outs being one of the biggest ones. I also think that it is not a very good DVD player, but it excels at playing BDs.

As a game box, the biggest weaknesses are the speed of the BD drive and the lack of ability to upscale 720p game material to 1080p.
One of the biggest complaints I have read from gamers is the need to install a lot of the games from disc to hard drive. Coming from a PC background, installing games to the hard drive doesn't bother me much, but it seems to drive a lot of console gamers bonkers. The fact is, though, is that eventually loading to a hard drive is going to become mandatory on all of these consoles, except the WII. Graphics and sound are becoming more and more complex and I just cannot see console games continuing to run from the DVD/BD drives indefinitely.

In some ways, SONY was way ahead of the curve with this system and in others way behind. It remains to be seen if their gamble pays off. I still think that it eventually will, but they will still lose money for a while yet.

On another note, I wonder if their money troubles were partly responsible for their decision to sell their cell processor division to Toshiba. I wonder whether their cel processor technology is being used in Toshiba's attempt to resurrect a shitty red laser based HD system, also known as super DVD.

SONY may end up regretting selling that technology to Toshiba.

Re: Sony has lost over $3 billion on the PS3

I shall assume you are taking into account the cost of research & development that went into creating Blu Ray in the first place? Or that many Blu Ray discs bought are not used with a PS3?

The alternative would be to imply that the cost of authorship, production and distribution for Blu Ray is higher than the value at which the discs retail.

I am not sure which of the two you are suggesting (if either)?

Re: Sony has lost over $3 billion on the PS3

You must surely take into account that the biggest investment was made in Blu Ray. Sony simply couldn't afford to lose the HD format war, bearing in mind that they bore the brunt of the cost for developing Blu Ray in the first place. You are right, the emphasis was placed on Blu Ray as a film distribution medium rather than on the quality of gaming the PS3 might provide, but it couldn't have been any other way.


Do you have any objective evidence to support these claims? Analogue outputs are available and with the latest firmware updates the Playstation 3 is to my eyes a very competent DVD player - it can certainly go toe to toe with a lot of dedicated hardware in this regard, even if it can't quite trade punches with the very best (such as Oppo Digital's efforts and the bigger Denon units).


Why would you want to? Remember that graphics, unlike video, are generated rather than simply 'decoded'. Scaling would in this instance be akin to describing a dollar as 'four quarters' - you are conveying the same detail using more (unnecessary) information.


Has it been sold to Toshiba? I was under the impression it has been licensed, and that Toshiba had a hand in the research & development of the Cell processor. I was also under the impression that Toshiba were using the Cell in their latest generation of flat screen televisions to power their EPG.

Re: Sony has lost over $3 billion on the PS3

That is what I meant when I said that their "convergence" strategy may not have been the best way to go. I realize that there were enormous R&D costs with the Blu-ray system. That is why it may have been a mistake to include it in the PS3. The stakes were so high when it came to winning the HD war that including a BD player in the PS3 has probably been a detriment to sales as a game system.

The need to win the HD war was so great that SONY forgot the primary buyer of the PS3 was going to be gamers. Frankly, it has been killing them when it comes to selling the PS3 to the average gamer. I mean, you are talking about a demographic who thinks a game console should not cost more than 300 dollars, no matter how powerful a system it is. The mindset is bizarre. I think they are overcoming the problem now, but it has taken a drastic drop in price and the introduction of some actual decent games which, IMO, are still few and far between.


Yes. I have my PS3 running through a VP50 processor. In every mode (meaning game playing and BD playback) it is very stable. However, when playing SD DVDs, the picture noticeably jitters and twitches. I have an HD A1 connected to the same VP50 and it is rock solid in every mode. Therefore, my conclusion is that the PS3, for my purposes, is not a good DVD player. My PS3 is presently up to date, but the jitter still persists when playing DVDs, so I use my A1 for DVDs.

Also, multi-channel RCA analogue outputs are not available on the PS3 so I cannot access the multi-channel lossless tracks or uncompressed PCM tracks on my BDs. With my present equipment, I can only listen to two channel PCM using the PS3. I'm not bitching out the PS3. It is a capable box, but being a convergence unit does result in it suffering from some weaknesses.


The XBOX 360 can upconvert 720p material to 1080 for TVs without native 720p input. The PS3 should be able to do the same. Right now it downconverts 720p games to 480p for sets without a native resolution of 720p. I realize that upconverting does not add information, but I would rather look at an image that at least still contains all of the information from the 720p signal, rather than at an image that is downconverted. If I wanted XBOX or PS2 level graphics then I need not have bothered with a PS3.


This one I'm not sure of. I could have sworn that I read that SONY sold their cell processor division to Toshiba; however, maybe I'm mistaken. It is possible that it was only a licence agreement. I'd have to to go back and look in to it.

Re: Sony has lost over $3 billion on the PS3

This I would fully agree with, but as the old French saying goes, tout comprende, c'est tout pardonner. I wasn't arguing with your original analysis, merely trying to explain it from a different angle


This may be an issue of compatibility rather than one of direct inadequacy on the PS3's part. That said, the VP50 is one of the best video processors available, so I suppose your PS3 is largely redundant for SD purposes in any case!


You should be able to extract core full bit rate DTS and Dolby Digital tracks from BD media via the optical output. Either way I have stated on another thread that one of the means by which Sony have kept the PS3 at such an afforable price - even with the losses they are making - is with subsidy, which includes both hardware and software. If you can't do a multichannel audio DAC well at the price, it's probably not worth including - offboard receivers can do this very well themselves.


A 1080 television will support a 720p input and utilise its own scalers. Your VP50 would also scale 720p to 1080 if that is what you required. You could argue that the PS3 ought to do this all 'in house', but this would purely be in the interests of inclination rather than in order to provide a better image on the screen.

I am confused by your observations on 480p output on the PS3 - why would you select this option in the first place if you had a HD set?

Re: Sony has lost over $3 billion on the PS3

You're confused because Edwin mistated the issue. The problem is the for people who own television sets ONLY capable of 1080i. They are not able to display 720p. Therefore any games that natively support 720p (and do not feature software support for 1080i) will downconvert to 480p when played on a 1080i only television. This continues to be an issue though much less of one as a good number newer games are shipping with 1080i support out of the box these days.

The Xbox 360, on the other hand, has a built-in scaler that allows the user to select the native resolution of thier television set and the scaler will display the content at that resolution for the user.

...and with aggressive price reductions, better system bundles and a healthier selection of software titles the PS3 has finally begun to find its footing. Time will only tell how much the "convergence" strategy hurt them against Microsoft who themselves continue to struggle to sell thier 360 to the "I want a $300 console" crowd. These consoles will only begin to move to the mass market gamer when they hit the sub-300 price point as you say. The lead the 360 has over the PS3 is not insurmountable. Especially for a company with the mindshare of the Playstation name in thier corner. The recent release of Metal Gear Solid 4 will no doubt be a boon for the system. Alas, both the 360 and the PS3 are being decimated by the Wii right now so...


That's too bad. You're both missing out on some excellent titles. Both on retail shelves and in the downloadable space via the PSN store. Super Stardust HD, Everyday Shooter, PixelJunk Monsters, and the recent release of Gran Turismo 5 Prologue each are well worth the download. With Socom Confrontation and especially Wipeout HD coming it's going to get more interesting. Games liked Ratchet and Clank Future, Unreal Tournament 3 (with support for user created mods), Uncharted, Metal Gear Solid 4, Devil May Cry 4 and more I've been doing quite a bit of gaming on my PS3 of late.

Re: Sony has lost over $3 billion on the PS3

This must be an American thing - I'm not aware of any European products that will display 1080i but not 720p (in fact I am pretty sure legislation exists which makes this illegal! - God bless the European Union).

Re: Sony has lost over $3 billion on the PS3

Which doesn't preclude it from being a very valid criticism of the PS3.

Re: Sony has lost over $3 billion on the PS3

Well actually I'm suggesting both. I seriously doubt that the companies involved in blu-ray have recouped their R&D investment at this point.

When you have titles that sell in the neighborhood of 3000 copies, that doesn't indicate to me that they are moving enough units to be in the black yet for production, packaging, distribution and marketing for individual titles. Yes some titles have sold well such as the Pirates films, but that is the exception to the rule at this point.

My estimation has nothing whatever to do with the PS3, just that not enough actual movies on blu-ray are selling well enough yet to be in the black. At this point I think that for the most part blu-ray is still a loss leader for the major studios. With the idea that they will eventually sell enough units to be profitable.

Doug

Re: Sony has lost over $3 billion on the PS3

Gran Turismo looks interesting, and i would probably pick it up if I had a wheel and pedal setup. I'm interested in Uncharted: Drake's Fortune, but the price is a little steep for me at the moment. I'm waiting to find a used copy.

Beyond that I haven't seen any games that really interest me much other than the two I own which is The Godfather and Call of Duty 3. I'm much more interested in role playing and or mystery games than shooters. (with the exception of WW2 shooters)

Now if they would put our a really intriguing first person mystery with enormous detail and interesting characters that you have to talk to to solve it, I would be all over that.

Doug

Re: Sony has lost over $3 billion on the PS3

My guess would be largely the same, but this is the product of intuition rather than any informed analysis. Neither of us have presented any objective statistics either way, but my inclination is broadly the same as your own - although you might well be surprized at how little the transition to Blu Ray production has cost some studios, who already had the necessary gear 'in house'.

Re: Sony has lost over $3 billion on the PS3

I think you are probably right in some cases. However the totality of getting a product into the stores suggests to me that many of these titles are not making money, and this was all but stated by one of the studio reps sometime last year, though I can't remember which who or in relation to what titles. Shipping alone may cost more than a title that sells 3000 copies might make.

You are right that it is a guess, but a moderately educated guess.

Doug

Re: Sony has lost over $3 billion on the PS3

I am sure Sony was fully expecting the PS3 to lose money. Afterall, the 360 didn't make any money till this year (though I am not sure about the repair costs...)
Still, it is probably worth it (or will be) since the PS3 greatly helped Sony win the format war with Blu-ray.

Re: Sony has lost over $3 billion on the PS3

Some would argue it is a valid criticism of some U.S. televisions and a mere 'observation' of the PS3.

Re: Sony has lost over $3 billion on the PS3

It is a valid criticism of the sets, but it is also a valid criticism of the PS3. SONY would have been well aware that some U.S and Canadian sets would not support 720p input; furthermore, their direct competitor in the console market provided the function.

It didn't make any sense at all for SONY not to include upscaling of 720p content. Unless, of course, a person wants to subscribe to the theory that it was done deliberately, in an attempt to prod buyers into upgrading their sets.

Re: Sony has lost over $3 billion on the PS3

Good idea! Sony do make Televisions. However some have claimed that having to use 480p means that the PS3 has PS2/X-Box style graphics. The mistake here is in assuming that resolution is the be-all-and-end-all of graphics, which it is not, just as I would suggest that resolution is perhaps one of the least significant benefits of going Blu Ray.

Re: Sony has lost over $3 billion on the PS3

That is a very interesting viewpoint. So what would you say IS the most significant benefit of Blu-ray?

Re: Sony has lost over $3 billion on the PS3

With SD-DVD, we reached the limits of what you can achieve via MPEG-2 encoding in 9.4Gb before we reached the limits of how much information can be conveyed in 480 lines (or 580, as is the case here in Britain).

With HD-DVD and Blu Ray, we have surpassed those limits - encoding artefacts are all but eradicated on a good transfer, colour gamut and depth are wider and broader respectively, giving more realistic hues and tones and able to paint the original celluloid with a much more accurate digital representation.

1080 lines of course have their benefits for users of extremely large screen sizes. One of the problems with marketing Blu Ray is, how do you persuade the public of its appeal? In the transition from VHS to DVD, the benefits were immediately apparent and both visibile and attainable for all age groups. The conundrum with Blu Ray is how do you create a similar distinction? It is hard to market the things I have mentioned - try explaining to your average punter the inherent superiority of VC1 over MPEG-2, or of the benefits of improved colour depth and a wider gamut.

1080 lines has been pushed to the fore because it's easy to explain and - with a big enough screen - it's easy to perceive. In the UK there is an inertia for manufacturers to include native 1080p panels on screens as small as 32" for people who use it as a casual lounge room television - a clear cut case of people falling for the marketing guff. In my opinion, a display should be chosen for its colour accuracy, its black depth and whether it suits your logistical needs (price, features, size, aesthetics etc).

Resolution is a nice caveat to flaunt on the shop floor but the only thing we enthusiasts should deduce from its marketing success is that people are increasingly looking toward their home entertainment systems to blur the distinction between reality and fantasy - a suspension of disbelief, which NTSC and PAL did perfectly well, is no longer adequate.

The implications of this are of course for psychologists to speculate upon rather than engineers like myself, but it's something worth considering never the less

Re: Sony has lost over $3 billion on the PS3

Get "Metal Gear Solid 4". It´s like a movie, basically. And one super-awesome game. In one package. And only in PS3.

Re: Sony has lost over $3 billion on the PS3

We have a thread in the Video Games forum on PS3 wheels. I got the Logitech Driving Force EX for $59 at Walmart and I'm very happy with it. Most stores only seem to sell the more expensive models (I had to order the EX online for in-store pickup). Looks like Newegg is selling it for that price too now.

Re: Sony has lost over $3 billion on the PS3

That is a very good point. With Blu-ray, there are far fewer artifacts and other errors and limitations than with DVD, despite the resolution. That is a great tool, but not many people would buy something for those reasons alone.
Interactive menus and internet connectivity are nice but again, nothing worth the investment in and of itself. I think it is really the combination of HD resolution, higher quality audio and video, and advanced features that make Blu-ray such an appeal. Perhaps resolution is over-rated, perhaps it is over-hyped, but it is a strong selling point nonetheless.
I know many people that "like" distorted images, cropped movies, and worse (often out of ignorance or laziness). For them, color depth, 24p, and encodes mean nothing. Convincing them to buy Blu-ray is very hard, since they are so happy with "full screen" (shudder) DVDs and such.
As more people buy HDTVs, more people will find out about Blu-ray. We enthusiasts are the only ones that are really concerned with all the technical and subtle nuances of Blu-ray movies. We have to lead the charge into Blu-ray, by setting the standards. Eventually, the rest will buy in as well, not knowing all the advances it has made, the better quality it offers. Some day, they will look back at DVD and say "I can't believe we ever watched that!"

As for an explanation why DVD isn't good enough for us anymore, to me it is simply that we are always striving for something closer to reality than ever before. As DVDs had clearly better quality, it was the obvious choice, and if there were no other options, it would still be that way. But as technology around us gets better, we see advances in everything from iPods and cellphones, to computers and electronic books. As they advance, we expect other things to as well. it is only natural that, after seeing an ipod with a 201 ppi screen, we want to see a TV with the same kind of resolution.

Re: Sony has lost over $3 billion on the PS3

Another thing to consider, without wanting to stumble into a diatribe on the perplexities of the modern consumer, is that you didn't need to change anything else to appreciate the benefit of SD-DVD over VHS. Hook a DVD player up to an old CRT box and still the difference was noticeable.

DVD it is true has inspired a lot of people to make the leap to digital, flat panel displays and front projection systems, which are themselves often well placed to reveal the potential benefits of going Blu Ray. But DVD saturated the market so well because it had the capacity to be a one-off purchase - buy a DVD player and the benefits were immediate, the consumer was easily gratified.

Blu Ray does not have that capacity. Want to see the benefits of VC1 over MPEG-2? Get a TV based on some kind of digital technology, which must be high def and have a suitable spec sheet. Want to hear the benefits of lossless over Dolby Digital? Better invest a good amount of money in the necessary equipment.

DVD could appeal to everybody because it was, to an extent, a 'self contained' product. Blu Ray cannot - it requires that the consumer lay down a vast quantity of money in order to realise its potential, and then pay a premium for the software titles, as well as navigate the maze of compatibility issues which have presented themselves in recent years. Factor in the current economic climate - when many of the world's major economies might well be on the verge of a recession - and the argument for Blu Ray really scaling the heights of SD-DVD becomes less and less compelling.

Sony have banded statistics around explaining how Blu Ray is growing quicker than DVD did, but my prediction would be that the saturation point for Blu Ray - like SACD before it - is going to be much lower than Sony had hoped for. Even if modern citizenry isn't getting everything it requires from reality - and the recent obsessions with interests which permit the total suspension of disbelief suggests that they aren't - economics will always rule.

Sony have lost a lot of money on this format - and I reckon they will lose a lot more just yet. Will they eventually turn over a profit? Perhaps. Will Blu Ray ever rival SD-DVD's popularity? I have my doubts!

Re: Sony has lost over $3 billion on the PS3

That is a good point.
I am surprised that Blu-ray has been as popular as it is so far. Looking at all the data I can find, it looks like it is doing fairly well and slowly growing. But for how long? The economy is not doing well, and this hurts everything. Blu-ray is definitely a "luxury product", something most people are not thinking about.
Economy aside (since it will affect so much more than just Blu-ray), I think the Feb 2009 digital broadcast requirements will be a huge boost for HDTV sales. Most TVs for sale now are HDTVs, and with continuing price drops, they should be easier to attain. It is not a requirement that people buy an HDTV, but I think most will do it just because, or just not know any better.
But all this is speculation.
The real test will be to look at the market this holiday season through March. If there is a boom in HDTV sales (and i a sure the prices will be low), there is hope yet.