Trending Games | ArcheAge | World of Warcraft | Elder Scrolls Online | Star Wars: The Old Republic

  Network:  FPSguru RTSguru
Login:  Password:   Remember?  
Show Quick Gamelist Jump to Random Game
Members:2,923,322 Users Online:0
Games:760  Posts:6,315,935
Recent forum postsRSS
Active threads
Cloud view
List all forums
General Forums
Developers Corner General Discussion
Popular Game Forums
Click a status to find game forum
Game Forums
Click a letter to find game forum
A-C
2029 Online 2112: Revolution 2Moons 4Story 8BitMMO 9 Dragons A Mystical Land A Tale in the Desert III A3 ACE Online ARGO Online Aberoth Absolute Force Online Absolute Terror Achaea Adellion Aerrevan Aetolia, the Midnight Age Age of Armor Age of Conan Age of Empires Online Age of Mourning Age of Wulin Age of Wushu Aida Arenas Aika Aion Albion Online Alganon All Points Bulletin (APB) Allods Online Altis Gates Amazing World Anarchy Online Ancients of Fasaria Andromeda 5 Angels Online Angry Birds Epic Anime Ninja Anime Pirates Anime Trumps Anmynor Anno Online Applo Arcane Hearts Arcane Legends ArchLord ArcheAge Archeblade Archlord X Ascend: Hand of Kul Asda 2 Asda Story Ashen Empires Asheron's Call Asheron's Call 2 Astera Online Astonia III Astro Empires Astro Lords: Oort CLoud Asura Force Atlantica Online Atriarch Aura Kingdom Aurora Blade Auto Assault Avatar Star Battle Dawn Battle Dawn Galaxies Battle for Graxia Battle of 3 Kingdoms Battle of the Immortals Battlecruiser Online Battlestar Galactica Online Battlestar Reloaded Beyond Protocol Black Aftermath Black Desert Black Gold Black Prophecy Black Prophecy Tactics: Nexus Conflict Blacklight Retribution Blade & Soul Blade Hunter Blade Wars Blazing Throne Bless Blitz 1941 Blood and Jade Bloodlines Champions Boot Hill Heroes Borderlands 2 Borderlands: The Pre-Sequel Bound by Flame Bounty Bay Online Brain Storm Bravada Bravely Default Bravely Second Brawl Busters. Brick-Force Bright Shadow Bullet Run Business Tycoon Online CTRacer Cabal Online Caesary Call of Camelot Call of Gods Call of Thrones Camelot Unchained Canaan Online Cardmon Hero Cartoon Universe CasinoRPG Cast & Conquer Castle Empire Castlot Celtic Heroes Champions Online Champions of Regnum Chaos Online Child of Light Chrono Tales Citadel of Sorcery CitiesXL Citizen Zero City of Decay City of Heroes City of Steam City of Transformers City of Villains Civilization Online Clan Lord Clash of Clans Cloud Nine Club Penguin Colony of War Command & Conquer: Tiberium Alliances Company of Heroes Online Conquer Online Conquer Online 3 Continent of the Ninth (C9) Core Blaze Core Exiles Corum Online Craft of Gods Crimecraft Crimelife 2 Cronous Crota II Crusaders of Solaris Cultures Online Cyber Monster 2 Cyberpunk 2077 Céiron Wars
D-F
D&D Online DC Universe DK Online DOTA DOTA 2 DUST 514 DV8: Exile Dalethaan Dance Groove Online Dark Age of Camelot Dark Ages Dark Legends Dark Orbit Dark Relic: Prelude Dark Solstice Dark Souls 2 Dark and Light DarkEden Online DarkSpace Darkblood Online Darkest Dungeon Darkfall Darkfall: Unholy Wars Darkwind: War on Wheels Das Tal Dawn of Fantasy Dawntide DayZ Dead Earth Dead Frontier Dead Island Dead Island 2 Dead Island: Riptide Deco Online Deep Down Deepworld Defiance Deicide Online Dekaron Demons at the Horizon Desert Operations Destiny Diablo 3 Diamonin Digimon Battle Dino Storm Disciple Divergence Divina Divine Souls Divinity: Original Sin Dofus Dominus Online Dragon Age: Inquisition Dragon Ball Online Dragon Born Online Dragon Crusade Dragon Empires Dragon Eternity Dragon Fin Soup Dragon Nest Dragon Oath Dragon Pals Dragon Raja Dragon's Call Dragon's Call II Dragon's Prophet DragonSky DragonSoul Dragona Dragonica Dragons and Titans Drakengard 3 Dream of Mirror Online Dreamland Online Dreamlords: The Reawakening Drift City Duels Dungeon Blitz Dungeon Fighter Online Dungeon Overlord Dungeon Party Dungeon Rampage Dungeon Runners Dungeon of the Endless Dynastica Dynasty Warriors Online Dynasty of the Magi EIN (Epicus Incognitus) EVE Online Earth Eternal Earth and Beyond Earthrise Eclipse War Ecol Tactics Online Eden Eternal Edge of Space Einherjar - The Viking's Blood Elder Scrolls Online Eldevin Elf Online Elite: Dangerous Embers of Caerus Emil Chronicle Online Empire Empire & State Empire Craft Empire Universe 3 EmpireQuest Empires of Galldon End of Nations Endless Ages Endless Blue Moon Online Endless Online Entropia Universe EpicDuel Erebus: Travia Reborn Eredan Eternal Blade Eternal Lands Eternal Saga Ether Fields Ether Saga Online Eudemons Online EuroGangster EverEmber Online EverQuest Next EverQuest Online Adventures Evernight Everquest Everquest II Evony Exarch Exorace F.E.A.R. Online Face of Mankind Fairyland Online Fall of Rome Fallen Earth Fallen Sword Fallout 4 Fallout Online Family Guy Online Fantage Fantasy Earth Zero Fantasy Realm Online Fantasy Tales Online Fantasy Worlds: Rhynn Faunasphere Faxion Online Fearless Fantasy Ferentus Ferion Fiesta Online Final Fantasy Type-0 HD Final Fantasy XI Final Fantasy XIV Final Fantasy XIV: A Realm Reborn Firefall Fists of Fu Florensia Flyff Football Manager Live Football Superstars Force of Arms Forge Forsaken Uprising Forsaken World Fortnite Fortuna Forum for Discussion of Everlight Freaky Creatures Free Realms Freesky Online Freeworld Fung Wan Online Furcadia Fury Fusion Fall
G-L
GalaXseeds Galactic Command Online Game of Thrones: Seven Kingdoms Gameglobe Gate To Heavens Gates of Andaron Gatheryn Gauntlet Gekkeiju Online Ghost Online Ghost Recon Online Gladiatus Glitch Global Agenda Global Soccer Gloria Victis Glory of Gods GoGoRacer Goal Line Blitz Gods and Heroes GodsWar Online Golemizer Golf Star GoonZu Online Graal Kingdoms Granado Espada Online Grand Chase Grand Fantasia Grepolis Grimlands Guild Wars Guild Wars 2 Guild Wars Factions Guild Wars Nightfall H1Z1 Habbo Hotel Hailan Rising HaloSphere2 Haven & Hearth Hawken Heart Forth Alicia Hearthstone: Heroes of Warcraft Helbreath Hellgate Hellgate: London Hello Kitty Online Hero Online Hero Zero Hero's Journey Hero: 108 Online HeroSmash Heroes & Generals Heroes & Legends: Conquerors of Kolhar Heroes in the Sky Heroes of Atlan Heroes of Bestia Heroes of Gaia Heroes of Might and Magic Online Heroes of Thessalonica Heroes of Three Kingdoms Heroes of the Storm Hex Holic Online Hostile Space Hunter Blade Huxley Icewind Dale: Enhanced Edition Illutia Illyriad Immortals USA Imperator Imperian Inferno Legend Infestation: Survivor Stories Infinite Crisis Infinity Infinity Iris Online Iron Grip: Marauders Irth Worlds Island Forge Islands of War Istaria: Chronicles of the Gifted Jade Dynasty Jagged Alliance Online Juggernaut Jumpgate Jumpgate Evolution KAL Online Kakele Online Kaos War Karos Online Kartuga Kicks Online King of Kings 3 Kingdom Heroes Kingdom Under Fire II Kingdom of Drakkar Kingory Kings Era Kings and Legends Kings of the Realm KingsRoad Kitsu Saga Kiwarriors Knight Age Knight Online Knights of Dream City Kothuria Kung Foo! Kunlun Online Kyn L.A.W. LEGO Universe La Tale Land of Chaos Online Landmark Lands of Hope: Redemption LastChaos League of Angels League of Legends - Clash of Fates Legend of Edda: Vengeance Legend of Golden Plume Legend of Grimrock 2 Legend of Katha Legend of Mir 2 Legend of Mir 3 Legendary Champions Lego Minifigures Online Lichdom: Battlemage Life is Feudal Light of Nova Lime Odyssey Line of Defense Lineage Lineage Eternal: Twilight Resistance Lineage II Linkrealms Loong Online Lord of the Rings Online Lords Online Lords of the Fallen Lost Saga Lucent Heart Lunia Lusternia: Age of Ascension Luvinia World
M-Q
MU Online Mabinogi Maestia: Rise of Keledus MagiKnights Magic Barrage Magic World Online Manga Fighter MapleStory Martial Heroes Marvel Heroes Marvel Super Hero Squad Online Marvel: Avengers Alliance Mass Effect 4 MechWarrior Online Megaten Meridian 59 : Evolution Merlin MetalMercs Metaplace Metin 2 MicroVolts Middle-earth: Shadow of Mordor Midkemia Online Might & Magic Heroes: Kingdoms Might & Magic X: Legacy MilMo Minecraft Mini Fighter Minions of Mirth Ministry of War Monato Esprit Monkey King Online Monkey Quest Monster & Me Monster Madness Online MonsterMMORPG Moonlight Online: Tales of Eternal Blood Moonrise Mordavia Mortal Online Mourning My Lands Myst Online: URU Live Myth Angels Online Myth War Myth War 2 Mythborne Mytheon Mythic Saga Mythos N.E.O Online NIDA Online Nadirim Naviage: The Power of Capital Navy Field Need for Speed World Nemexia Neo's Land NeoSteam Neocron Nether Neverwinter Nexus: The Kingdom Of The Winds NinjaTrick NosTale Novus Aeterno Oberin Odin Quest Odyssey RPG Ogre Island Omerta 3 Online Boxing Manager Onverse Oort Online Order & Chaos Online Order of Magic Original Blood Origins Return Origins of Malu Orion's Belt Otherland Forums OverSoul Overkings Overwatch Oz Online Oz World Pandora Saga Pantheon: Rise of the Fallen Panzar Parabellum Parallel Kingdom Parfait Station Path of Exile Pathfinder Online Perfect World Perpetuum Online Persona V Phantasy Star Online 2 Phantasy Star Universe Phoenix Dynasty Online Phylon Pi Story Picaroon Pillars of Eternity Pirate Galaxy Pirate Storm Pirate101 PirateKing Online Pirates of the Burning Sea Pirates of the Caribbean Online Pixie Hollow Planeshift Planet Arkadia Planet Calypso PlanetSide 2 Planetside Planets³ Playboy Manager Pocket Legends Pockie Ninja Pockie Pirates Pockie Saints Pokémon X and Y PoxNora Prime World Prime: Battle for Dominus Priston Tale Priston Tale II Prius Online Prodigy Project Blackout Project Gorgon Project Powder Project Titan Forums Project Wiki Project Zomboid Puzzle Pirates Quest for Infamy Quickhit Football
R-S
R2 Online RAN Online RF Online ROSE Online Rage of 3 Kingdoms Ragnarok Online Ragnarok Online II RaiderZ Rail Nation Rakion Rappelz RappelzSEA Ravenmarch Realm Fighter Realm of Sierra Realm of the Mad God Realm of the Titans Realms Online Rebel Galaxy Reclamation Red Stone Red War: Edem's Curse Regnum Online Remnant Knights Renaissance Repulse Requiem: Memento Mori Rift RiotZone Rise Rise of Dragonian Era Rise of Empire Rise of the Tycoon Risen 3: Titan Lords Rising of King Risk Your Life Rivality Rockfree Rohan: Blood Feud Role Play Worlds Roll n Rock Roma Victor Romadoria Rosh Online Roto X Rubies of Eventide Ruin Online Rumble Fighter Runes of Magic Runescape Rust Rusty Hearts Ryzom S4 League SAGA SD Gundam Capsule Fighter Online SMITE SUN Sacred 3 Sagramore Salem SaySayGirls Scarlet Blade Scions of Fate Seal Online: Evolution Second Chance Heroes Second Life Secret of the Solstice Seed Serenia Fantasy Seven Seas Saga Seven Souls Online Sevencore Shadow Realms Shadow of Legend Shadowbane Shadowgate Shadowrun Online Shaiya Shards Online Shattered Galaxy Sho Online Shot Online Shroud of the Avatar SideQuest Siege on Stars Sigonyth: Desert Eternity Silkroad Online Skyblade Skyforge SmashMuck Champions Smoo Online Soldier Front Soul Master Soul Order Online Soul of Guardian South Park: The Stick of Truth Space Heroes Universe Sparta: War of Empires Spellcasters Sphere Spiral Knights Spirit Tales Splash Fighters Squad Wars Star Citizen Star Conflict Star Sonata 2 Star Stable Star Supremacy Star Trek Online Star Trek: Infinite Space Star Wars Galaxies Star Wars: Clone Wars Adventures Star Wars: The Old Republic StarQuest Online Starbound Stargate Worlds Starlight Story Starpires State of Decay SteelWar Online Stone Age 2 Stormfall: Age of War Stormthrone Storybricks Stronghold Kingdoms Styx: Master of Shadows Sudden Attack Supremacy 1914 Supreme Destiny Sword Girls Sword of Destiny: Rise of Aions SwordX Swords of Heavens Swordsman
T-Z
TERA TS Online TUG Tabula Rasa Tactica Online Tales Runner Tales of Fantasy Tales of Pirates Tales of Pirates II Tales of Solaris Talisman Online Tamer Saga Tank Ace Tantra Online Tatsumaki: Land at War Terra Militaris TerraWorld Online Terraria Thang Online The 4th Coming The Agency The Aurora World The Banner Saga The Black Watchmen The Chronicle The Chronicles of Spellborn The Crew The Division The Epic Might The Hammers End The Incredible Adventures of Van Helsing The Incredible Adventures of Van Helsing 2 The Legend of Ares The Lost Titans The Matrix Online The Mighty Quest for Epic Loot The Missing Ink The Mummy Online The Myth of Soma The Pride of Taern The Realm Online The Repopulation The Secret World The Sims Online The Strategems The West The Witcher 3: Wild Hunt Theralon There Therian Saga Thrones of Chaos Tibia Tibia Micro Edition Tiger Knight Titan Siege Titans of Time Toontown Online Top Speed Topia Online Torchlight Torment: Tides of Numenera Total Domination Transformers Universe Transistor Transverse Traveller AR Travia Online Travian Triad Wars Trials of Ascension Tribal Hero Tribal Wars Tribes Universe Trickster Online Trove Troy Online True Fantasy Live Online Turf Battles Twelve Sky Twelve Sky 2 Twilight War Tynon U.B. Funkeys UFO Online URDEAD Online Ultima Forever: Quest for the Avatar Ultima Online Ultima X: Odyssey Ultimate Naruto Ultimate Soccer Boss Uncharted Waters Online Undercover 2: Merc Wars Underlight Unification Wars Universe Online Utopia Valkyrie Sky Vampire Lord Online Vanguard: Saga of Heroes Vanquish Space Vector City Racers Vendetta Online Victory - Age of Racing Vindictus Virtonomics Vis Gladius Visions of Zosimos VoidExpanse Voyage Century Online W.E.L.L. Online WAR (Warhammer Online) WAR2 Glory WYD Global Wakfu War Thunder War of 2012 War of Angels War of Legends War of Mercenaries War of Thrones War of the Immortals WarFlow Waren Story Warflare Wargame1942 Warhammer 40,000: Eternal Crusade Warhammer 40K: Dark Millennium Online Warhammer Online: Wrath of Heroes Warkeepers Warrior Epic Wartune Wasteland 2 WebLords Wild West Online WildStar Wind of Luck WindSlayer 2 Wings of Destiny Wish Wizard101 Wizardry Online Wizards and Champions Wonder King Wonderland Online World Golf Tour World of Battles World of Darkness World of Heroes World of Kung Fu World of Pirates World of Speed World of Tanks World of Tanks Generals World of Warcraft World of Warplanes World of Warriors World of Warships World of the Living Dead WorldAlpha Wurm Online Xenoblade Chronicles: X Xenocell Xiah Xsyon Xulu YS Online Yitien ZU Online Zentia Zero Online Zero Online: The Andromeda Crisis Zodiac Online Zombies Ate My Pizza eRepublik

MMORPG.com Discussion Forums

General Discussion

General Discussion 

Hardware  » Are consoles sold under production price?

2 Pages 1 2 » Search
31 posts found
  Elikal

Spotlight Poster

Joined: 2/09/06
Posts: 8067

“No path is darker then when your eyes are shut.” -Flemeth

 
OP  6/25/13 4:47:22 AM#1

Just recently I had a discussion about consoles with a friend about the production price. My opinion was, that Xbox One, PS4 and Wii U are all produced under production price, while my friend said that like with Apple products the parts would be very cheap and companies would never sell their product with loss, because they are greedy and evil. ^^

 

In the end it was just two opinions and I wanted to know if there are some facts, someway to find out who of us was right. Like some production value assessment of some neutral parties, product testers or somesuch.

Anyone? ^^

A forum is a place where people can discuss about different opinions. So what I don't get is, how people react offended when they come to a forum and then find... well different opinions. If a different opinion offends you, what are you even doing here?

  Betaguy

Advanced Member

Joined: 12/31/04
Posts: 2653

Some folks are like Slinkies, totally useless but great fun to watch when pushed down stairs

6/25/13 4:50:25 AM#2

Here is an older article but still relevant:

http://www.gamespot.com//news/report-ps3-to-sell-for-399-cost-494-to-make-6128295?

Corporate sport

  mcrippins

Hard Core Member

Joined: 7/01/07
Posts: 1015

6/25/13 4:50:31 AM#3
That would effectively mean they lose money on each system they sell. Doesn't seem like a very smart business decision.
  GroovyFlower

Apprentice Member

Joined: 5/12/11
Posts: 1252

Skyrim

6/25/13 7:59:18 AM#4

Its a well known fact they sell console underprised, they mainly depend on the games they sell.

Thats why games on consoles are so expensive.

  Ridelynn

Elite Member

Joined: 12/19/10
Posts: 3666

6/25/13 12:35:26 PM#5


Originally posted by GroovyFlower
Its a well known fact they sell console underprised, they mainly depend on the games they sell.

Thats why games on consoles are so expensive.


Not all consoles sell for a loss, although it's not uncommon. Those that don't sell for a loss are still on a very thin margin.

GroovyFlower is right - the revenue driver isn't the hardware, it's the licensing. They charge each developer a license fee just to be able to run their game on the platform. Then there are fees to distribute patches online, fees if you want to sell your product digitally on their storefront, fees if you want to have online connectivity (particularly XBL), fees for the DevKits, fees for Microtransactions processed through your program.

The hardware is just there as the hook.

  udon

Hard Core Member

Joined: 12/23/07
Posts: 1644

6/25/13 12:41:09 PM#6
Originally posted by Elikal

Just recently I had a discussion about consoles with a friend about the production price. My opinion was, that Xbox One, PS4 and Wii U are all produced under production price, while my friend said that like with Apple products the parts would be very cheap and companies would never sell their product with loss, because they are greedy and evil. ^^

 

In the end it was just two opinions and I wanted to know if there are some facts, someway to find out who of us was right. Like some production value assessment of some neutral parties, product testers or somesuch.

Anyone? ^^

They often sell for a lose early in their life cycle and as prices of components drop they start to make money.

Most of the money that console makers make is off of the games themselves.  They get a license fee for every copy sold.

I remember reading a article back in the early days of Xbox 360's that said that Microsoft didn't make money until a person purchased their 4th or 5th game for the new console.

  GrayGhost79

Novice Member

Joined: 8/30/08
Posts: 4889

6/25/13 12:43:23 PM#7

This Gen won't be sold at a loss. The x86 setup they are going with is a great deal cheaper than the custom setup of the PS3 of Xbox 360. They are basically using slightly modified PC components so they will be making a profit even if they do sale the systems at a loss for w/e reason initially they will become profitable fairly quickly. 

 

 

  GwapoJosh

Advanced Member

Joined: 3/10/12
Posts: 1012

6/25/13 12:47:04 PM#8
All consoles start selling at a loss.. They start to make profit as the tech becomes cheaper to produce.  It's a risk but it's a necessary risk on the road to profit in the console world..

"You are all going to poop yourselves." BillMurphy

  Spiider

Hard Core Member

Joined: 2/15/05
Posts: 450

6/25/13 12:51:50 PM#9
That is a lie corporations want you to believe. Consoles are sold way over what they cost to make. Then corporations dumb bazillions in marketing and say "oh look consoles are underpriced, buy them while they last".

No fate but what we make, so make me a ham sandwich please.

  Miblet

Apprentice Member

Joined: 8/19/10
Posts: 334

6/25/13 12:52:56 PM#10
The consoles generally are sold at a marginal loss (launch) or marginal profit (end) depending on the point in their lifecycle.  The games for said systems however are an altogether different story.  Once you have purchased a console you will buy games for it, so it's an effective strategy, and and absurdly lucrative one.
  Loktofeit

Hard Core Member

Joined: 1/13/10
Posts: 12406

Currently playing EVE, SMITE, ArcheAge, and Combat Arms

6/25/13 12:57:16 PM#11
Originally posted by mcrippins
That would effectively mean they lose money on each system they sell. Doesn't seem like a very smart business decision.

They make it up in licensing, which is something they can't do unless people have the systems to play the games on.

A person is usually only going to buy one of a particular console - people rarely have 2 of the same console in their house - so profit on that can only be made once for each household. However, games will continue to be made for the system for years to come, so licensing allows for continuous revenue.

Here's a relatively recent article on the 'Razor and Blades' business model that should give you more insight into how it all works: 

http://www.forbes.com/sites/ciocentral/2012/12/19/razor-and-blades-pricing-strategies-in-the-digital-age/

 

"And wikipedia is as accurate as Britannica. Wikipedia is very reliable. You would be hard pressed to find a more reliable source for these kinds of things." -fivoroth

  lizardbones

Advanced Member

Joined: 6/11/08
Posts: 10953

I think with my heart and move with my head.-Kongos

6/25/13 12:57:37 PM#12

Sony stated that they are not selling their consoles at a loss. Some people are even saying that Sony will turn a profit on each one shipped. Not much profit, but $25 to $55 per unit shipped isn't chump change.

http://www.playstationlifestyle.net/2013/06/11/pachter-sony-almost-certainly-making-a-profit-on-399-ps4/

I can not remember winning or losing a single debate on the internet.

  Daranar

Apprentice Member

Joined: 11/22/11
Posts: 176

6/25/13 12:58:49 PM#13

It is common knowledge and practice that consoles are sold under their price.   Unlike PC, Microsoft, Nintendo, and Sony make money on the individual games sold.   Now, what I am curious to see, is if this is still reigning true (or still to the same margin) in these new consoles.   What I have heard is the price point is looking to be around $700!!   Now of course, ATM when you look at the specs, you would be hard pressed to find a PC running similar specs for around that much.   But in 6 months from now, you will easily find PCs running similar specs for the same price (or less).   Calculate in the mass production...seems they will be making money on these new wave of systems....IDK.   

 

Thoughts?

If I want a world in which people can purchase success and power with cash, I'll play Real Life. Keep Virtual Worlds Virtual!

  Daranar

Apprentice Member

Joined: 11/22/11
Posts: 176

6/25/13 1:00:20 PM#14
Originally posted by lizardbones

Sony stated that they are not selling their consoles at a loss. Some people are even saying that Sony will turn a profit on each one shipped. Not much profit, but $25 to $55 per unit shipped isn't chump change.

http://www.playstationlifestyle.net/2013/06/11/pachter-sony-almost-certainly-making-a-profit-on-399-ps4/

Lol, in the time it took me to write mine, there is a good pit of clarification to my question/point.  And very nice, I didn't know they lowered the price for the low end models.  Cool deal.  At $399 I may get a PS4.

If I want a world in which people can purchase success and power with cash, I'll play Real Life. Keep Virtual Worlds Virtual!

  lizardbones

Advanced Member

Joined: 6/11/08
Posts: 10953

I think with my heart and move with my head.-Kongos

6/25/13 1:08:03 PM#15


Originally posted by Daranar

Originally posted by lizardbones Sony stated that they are not selling their consoles at a loss. Some people are even saying that Sony will turn a profit on each one shipped. Not much profit, but $25 to $55 per unit shipped isn't chump change. http://www.playstationlifestyle.net/2013/06/11/pachter-sony-almost-certainly-making-a-profit-on-399-ps4/
Lol, in the time it took me to write mine, there is a good pit of clarification to my question/point.  And very nice, I didn't know they lowered the price for the low end models.  Cool deal.  At $399 I may get a PS4.



For the previous generations, Nintendo was really the only company making a profit on their consoles, but this generation they've reversed it. Nintendo is losing money on each console sold, while Sony is making money on each console sold. Microsoft is very likely making money on each console sold, but we don't know for sure. Given that they are using a lower end graphics part and lower end memory, it seems likely that they are going to make money.

I can not remember winning or losing a single debate on the internet.

  saiyin

Apprentice Member

Joined: 8/17/07
Posts: 12

6/25/13 1:09:28 PM#16
Originally posted by Spiider
That is a lie corporations want you to believe. Consoles are sold way over what they cost to make. Then corporations dumb bazillions in marketing and say "oh look consoles are underpriced, buy them while they last".

Consoles are never sold for a lost. You guys are looking at things in a very small manner. Lets say it cost MS/Sony S40 million to develop the system and another S100 million for manufacturing, advertising and shipping of the system. Now in 2 years they probably sell over 20 million system world wide at about a price of $400 a piece that comes out to be $8 billion. Even if you double and or triple all the cost both companies will still be in the black by a lot.

 

All the licensing of the software is all profit. Never believe the media specially when it comes to what a company told them. They don't have to give them the real numbers.

  niceguy3978

Elite Member

Joined: 6/14/06
Posts: 2016

6/25/13 1:13:39 PM#17
Originally posted by Loktofeit
Originally posted by mcrippins
That would effectively mean they lose money on each system they sell. Doesn't seem like a very smart business decision.

They make it up in licensing, which is something they can't do unless people have the systems to play the games on.

A person is usually only going to buy one of a particular console - people rarely have 2 of the same console in their house - so profit on that can only be made once for each household. However, games will continue to be made for the system for years to come, so licensing allows for continuous revenue.

Here's a relatively recent article on the 'Razor and Blades' business model that should give you more insight into how it all works: 

http://www.forbes.com/sites/ciocentral/2012/12/19/razor-and-blades-pricing-strategies-in-the-digital-age/

 

Yeah, it is pretty much the same strategy as cell phone companies.  Sell the phones deeply discounted to lock you into a contract where they recoup the cost of the phone and then some.  As far as I know the Wii is the only console over the last decade or so to sell at a profit from the beginning.  But they also had a lower game tie-in rate (fewer games sold per console sold) so they made less off of licensing, so I wonder  how it worked out over the lifetime of the console.

  Phaserlight

Advanced Member

Joined: 7/18/04
Posts: 740

Do you want to improve the world? I don't think it can be done. -Lao Tzu

6/25/13 1:14:58 PM#18
There is also the $99 Ouya (which is supposedly launching today; I'd be curious to know if you see one if you happen to head by Target or GameStop) and the $79 Gamestick coming out in August.  I highly doubt either of these are being sold at a loss.

"To be what you are not, experience what you are not." -Saint John of the Cross
Authored 110 missions in Vendetta Online
Check it out on Steam

  niceguy3978

Elite Member

Joined: 6/14/06
Posts: 2016

6/25/13 1:16:02 PM#19
Originally posted by Daranar

It is common knowledge and practice that consoles are sold under their price.   Unlike PC, Microsoft, Nintendo, and Sony make money on the individual games sold.   Now, what I am curious to see, is if this is still reigning true (or still to the same margin) in these new consoles.   What I have heard is the price point is looking to be around $700!!   Now of course, ATM when you look at the specs, you would be hard pressed to find a PC running similar specs for around that much.   But in 6 months from now, you will easily find PCs running similar specs for the same price (or less).   Calculate in the mass production...seems they will be making money on these new wave of systems....IDK.   

 

Thoughts?

Where in the world did you get the 700$ from?  399.99 for the PS4 and 499.99 for the 360.  

  niceguy3978

Elite Member

Joined: 6/14/06
Posts: 2016

6/25/13 1:18:40 PM#20
Originally posted by Phaserlight
There is also the $99 Ouya (which is supposedly launching today; I'd be curious to know if you see one if you happen to head by Target or GameStop) and the $79 Gamestick coming out in August.  I highly doubt either of these are being sold at a loss.

The Ouya is for android games if I remember correctly.  They wouldn't be able to collect any licensing fees for that since it is an open platform, so yeah, they would have to sell them at a profit since it would be their only source of income.  I've not heard of the gamestick, what is that?  Sounds like one of those things you would buy at target/walmart to plug into the tv and play the preloaded games it came with.

2 Pages 1 2 » Search