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Jawbreaker

Member
Oct 25, 2017
8,411
New York City
www.bloomberg.com

Sony Boosts Profit Outlook on Better Movies, Music Prospects

Sony Group Corp. raised its fiscal-year profit forecast, betting that improving prospects for its music, movies and electronics divisions will offset slowing gaming demand as the global economy starts to emerge from Covid-19.

Sony Chief Financial Officer Hiroki Totoki said that the company's key product, the $499 PlayStation 5, was no longer selling at a loss. The $399 PS5 Digital Edition is on track to have its loss offset by other hardware sales including peripherals and the PlayStation 4, the CFO added.
 

Misterhbk

Member
Oct 27, 2017
1,313
That was a fast turn around.

Gotta wonder if the Series consoles are close to this point as well? One would assume so.
 

modiz

Member
Oct 8, 2018
17,841
Kinda impressive that a $650 BOM console has offset its costs already
 

Tiago Rodrigues

Attempted to circumvent ban with alt account
Banned
Nov 15, 2018
5,244
Imagine making money out of a PS5 only 8 months after release. Incredible results for Sony, specially all things considered right now!
 

jroc74

Member
Oct 27, 2017
28,995
This is amazing.

Makes me wonder will we ever get a bill of materials article/chart for these consoles this gen?

Kinda impressive that a $650 BOM console has offset its costs already
XS5LK.gif
 
Oct 27, 2017
5,843
There's a new version refresh that makes the console lighter. I imagine that is contributing to cost saving somehow.
 
Oct 27, 2017
2,073
I haven't seen this in other reports.

In any case, the PS5 was still sold at loss during the April-June quarter, as shown there. It was one of the factor to explain the lower income.

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Temascos

Member
Oct 27, 2017
12,519
That's a really quick turnaround!

How does it compare to other systems? I only remember the Wii making back it's cost at launch because it was a cheap system to develop outside of motion controls.
 

Aarglefarg

Member
Oct 27, 2017
4,067
It's a surprise that the Digital Edition's losses are said to be offset by peripherals and such, rather than software.
 

JahIthBer

Member
Jan 27, 2018
10,382
It's interesting PS5 non digital is profitable, it shows AMD can afford to cut the price of their RDNA2 GPU's & still make a profit.
 

Atolm

Member
Oct 25, 2017
5,829
It's a surprise that the Digital Edition's losses are said to be offset by peripherals and such, rather than software.

Easy, you can't buy them separately, at least in my country. Sony forces bundles (and I know it's coming from them, I've spoken with workers from Game and not even them can buy the console alone) upon retailers. PS5 DE with an extra controller is the minimum I've seen (and the one I bought), but they also sell it with Media Remote and PSN vouchers. For Disc ver all consoles from the last month and half or so come with Ratchet and they also try to pack it up with stuff no one wants like Destruction All Stars (all second hand places in my region are FLOODED with that game, no one wants it and they probably printed millions).

I've bought it with an extra controller because well, they usually don't come down in price during a console's lifespan and enthusiast users usually need two because one breaks. And controllers are almost 100% profit.

The only time you were able to buy consoles without packs was during launch.
 
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BitterFig

Member
Oct 30, 2017
1,099
Typical estimates for optical drives I've seen are around $20. So Sony could be losing as much as $80 per DE PS5 which is almost at glorious PS3 level losses lol. But since their product mix has at most 20% of DE PS5, so in total they are currently only losing about $16 per PS5 in average which is a lot more manageable. It explains why they can reach balance with only peripheral hardware sales and have operating profits despite the console launch when software is factored in.
 
Typical estimates for optical drives I've seen are around $20. So Sony could be losing as much as $80 per DE PS5 which is almost at glorious PS3 level losses lol. But since their product mix has at most 20% of DE PS5, so in total they are currently only losing about $16 per PS5 in average which is a lot more manageable. It explains why they can reach balance with only peripheral hardware sales and have operating profits despite the console launch when software is factored in.
Weren't PS3 losses at around $200?
 

The Boat

Member
Oct 28, 2017
3,871
That's a really quick turnaround!

How does it compare to other systems? I only remember the Wii making back it's cost at launch because it was a cheap system to develop outside of motion controls.
Nintendo tends to make profit on their hardware from day 1, although I'm sure there are exceptions. I think the GC was sold at a loss when they dropped the price, maybe it was the same with the 3DS.

Anyway, it's great that Sony managed this so fast!
 
Oct 27, 2017
20,761
I find it even more interesting that the chart Sony shared that went to March 2022 made it seem like costs would go down a lot more too.
 

takriel

Attempted to circumvent ban with alt account
Banned
Oct 25, 2017
10,221
That is impressive, goes to show the excellent console design.
 

Le Dude

Member
May 16, 2018
4,709
USA
Typical estimates for optical drives I've seen are around $20. So Sony could be losing as much as $80 per DE PS5 which is almost at glorious PS3 level losses lol. But since their product mix has at most 20% of DE PS5, so in total they are currently only losing about $16 per PS5 in average which is a lot more manageable. It explains why they can reach balance with only peripheral hardware sales and have operating profits despite the console launch when software is factored in.
I remember being told here on era in the hardware speculation thread that no company would be doing the two launch SKU strategy after the 360/PS3 gen, yet here we are with both Microsoft and Sony taking the approach (with different strategies) and seeing success. Wouldn't be surprised if it happens again.

On another note I wonder if Sony's VR plans played into their decision to launch a digital only console as opposed to a Series S-like lower resolution console?
 

Adulfzen

Member
Oct 29, 2017
3,606
That's really good considering how much better the PS5 is hardware wise compared to the PS4 was at its time at launch
 

Iron Eddie

Banned
Nov 25, 2019
9,812
I wonder how much "support multi-platform strategy" is going to ramp up?

It was a smart move for them to release the PS5 Digital but it was well known they were taking a bigger loss on it. I'd like to know how many they have actually made so far?
 

pswii60

Member
Oct 27, 2017
26,673
The Milky Way
Looks like Zhuge is also reporting for the disc version.


Well at least Sony has finally officially announced they've gone multiplatform :)

Nixxes was a very strategic purchase. They really didn't have much in the way of PC expertise internally, and that acquisition changes that in a flash.

Looking forward to seeing Housemarque thrive in the coming years. So much talent in that studio, I just hope they don't end up as another studio on a 5-year dev cycle. Would much rather we see them continue working on medium sized 2-3 year projects like Returnal. Perhaps they could now work on a few smaller projects again like Resogun, now that the financial pressure is off.
 

Ascenion

Prophet of Truth - One Winged Slayer
Member
Oct 25, 2017
10,099
Mecklenburg-Strelitz
This actually kinda upsets me, because if they already are making a profit then the PS5 could've had just that little bit extra oomph. I already took issue with design choices as it was.
 

EssBeeVee

Member
Oct 25, 2017
22,760
Scalpers still gonna be rejoicing. hopefully its saturated enough it doesn't need to happen but lets be honest.
 
Oct 27, 2017
7,977
I thought the digital version would make money first being cheaper to produce (numbers from my ass but there's less hardware in the thing). I guess attach rates are larger for the disc version?
 

Det

Member
Jul 30, 2020
12,880
I thought the digital version would make money first being cheaper to produce (numbers from my ass but there's less hardware in the thing). I guess attach rates are larger for the disc version?

It's not the software attach rate, it's purely the BOM vs retail pricing difference. It's roughly $20 per unit for the disc drive addition, but a $100 retail price difference. Peripherals making up the loss is likely related to the bundles they've been running/promoting, as the margins on an extra controller are very high - BOM cost of $15-$17 vs retail price of $70.
 

Ascenion

Prophet of Truth - One Winged Slayer
Member
Oct 25, 2017
10,099
Mecklenburg-Strelitz
I thought the digital version would make money first being cheaper to produce (numbers from my ass but there's less hardware in the thing). I guess attach rates are larger for the disc version?
The digital version being $399 is imo a response to the Xbox Series S and a desperation play to have a $399 entry point. The DE should actually be closer to $449-474.99.
 

jroc74

Member
Oct 27, 2017
28,995
Weren't PS3 losses at around $200?

I believe it was more along the $200 mark, that thing was taking a massive loss at the beginning.


Yeah, that was an odd take already, but its was well above $100. No where near PS3 levels of loss, lol.

That small die + high clockspeeds putting in the work I guess.
Pretty much.

I'm just sitting here patiently waiting for a BOM chart to get posted.

$650 BOM? Where's that from?
Before the PS5 lanched....so many was so sure it was gonna be a PS3, XBO situation with console costs.

......it never made sense when a Bloomberg article had estimates at around $450....it was amazing that so many couldnt speculate off that...but latched on so quick for the die problems article so easily.....

That its already no longer selling at a loss looks like alot of us that had realistic expectations were closer to being right.
 
Oct 27, 2017
7,977
It's not the software attach rate, it's purely the BOM vs retail pricing difference. It's roughly $20 per unit for the disc drive addition, but a $100 retail price difference. Peripherals making up the loss is likely related to the bundles they've been running/promoting, as the margins on an extra controller are very high - BOM cost of $15-$17 vs retail price of $70.

The digital version being $399 is imo a response to the Xbox Series S and a desperation play to have a $399 entry point. The DE should actually be closer to $449-474.99.
Gotcha, makes sense. Thank you!
 

Decarb

Member
Oct 27, 2017
8,643
Making profit at $500 on a machine that's 10tf, capable of RT and has a super fast SSD. Incredible.
 

jroc74

Member
Oct 27, 2017
28,995
Making profit at $500 on a machine that's 10tf, capable of RT and has a super fast SSD. Incredible.
Yup. One upon a time the SSD was supposed to make the PS5 $599.

I'm just happy going forward both MS and Sony will hopefully have NVMe's and SSD technology as the base for future consoles. I cant see either going back to mechanical hard drives.
 

Pryme

Member
Aug 23, 2018
8,164
And now you see why I'm thoroughly unconvinced that the Steam Deck is selling at a loss at $399 like many here claim.