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Playstation 3 related posts.
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09-18-08 Playstation Store update
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Sony CEO: Wii has better business model
Stringer: The major difference lies in the fact that Nintendo makes money with the hardware alone, which may be a superior business model. But the Wii is not succeeding at our expense – it is not hurting us. We decided years ago to build a game console that offers much greater functionality. The Playstation 3 has an enormous processor; it is gradually emerging as the central server in our users' homes.
He also noted that possibly Sony will never recuperate the costs done on research and development for the PS3, eventhough currently Sony is making a profit on the overall PS3 sales (including games)Can you ever get your money back?
Stringer: Not for as long as I live (laughs). It will certainly take some time. The traditional business model for the Playstation envisaged us making a loss with the hardware in the early years until the production costs had decreased to a point that enabled us to break even. In the meantime, we earn money with the games. We are currently at the stage in which we need to get a grip on the production costs. That takes time. We are already making more money with the games than we are losing with the hardware.
Of course one has to look at the bigger picture and not only at PS3 by itself. Both Sony and Microsoft want their products to be at the hub of the average consumer's living room and if you have to lose money on one product to get overall benefit then that's not a problem at all.Stringer: Not for as long as I live (laughs). It will certainly take some time. The traditional business model for the Playstation envisaged us making a loss with the hardware in the early years until the production costs had decreased to a point that enabled us to break even. In the meantime, we earn money with the games. We are currently at the stage in which we need to get a grip on the production costs. That takes time. We are already making more money with the games than we are losing with the hardware.
Nintendo on the other hand has a much simpler strategy of selling a game console and making a profit out of that. It can be a good strategy on the short term, but if your console isn't a hit, you're in for a damn problematic time.
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