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Jeff Grubb rumor: MS is taking a loss on both series x and s with bigger loss on the s.

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Mezoly

Mezoly

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Oct 25, 2017
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ImaginaShawn said:
www.polygon.com

Sony CEO Kaz Hirai says PS4 is already profitable

The PlayStation 4 is already profitable for Sony on a hardware unit basis, president and CEO Kazuo Hirai announced during its corporate strategy meeting this week. "It's been a hugely successful...
www.polygon.com www.polygon.com
It was at least profitable in the first fiscal quarter.
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that's the ecosystem or the brand overall. HW launched at a loss. Off course overtime it became profitable
www.eurogamer.net

Sony expects to recoup PlayStation 4 hardware loss at launch

PlayStation 4 hardware will make a loss at launch, but Sony expects to immediately recoup the costs when a typical user…
www.eurogamer.net www.eurogamer.net
 

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Jeffram said:
I assumed they would take more of a loss on X since X owners are likely to spend more on software and generate more profits down the line.

EDIT. Does Jeff Grubb actually know anything on the business side of things? leaking event dates and software reveals that hundred of game devs might know about is different than knowing the BOM of a system.
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Reporters get info on background all the time so yes
 
Theorry

Theorry

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Oct 27, 2017
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Bufbaf said:
And PS5 digital isn't (presumably) less powerful. If Series X is produced at loss, PS5 will have to compare to that one in both versions. And one will clearly be more expensive than the other.
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No idea why ps5 is brought up.
Talking about Series S they can be take a loss more on it as they know people are all digital on it.
 
IMCaprica

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Aug 1, 2019
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This isn't surprising. I'm assuming Xbox took an educated guess that the PS5 wouldn't/couldn't be sold at a loss greater than a $499.99 console. I have to wonder if the S pricing was decided in response to the PS5DE.
 
Raigor

Raigor

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May 14, 2020
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With the hardware inside it's not surprising.

PS5 is going to be the same, if they price the digital at 399, the loss is even bigger.
 
JaseC64

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Well do we know how many games do they need for a single user to buy to break even? What about Gamepass? If they sign up for the service and buy no games for launch, will that also hurt them? (Missing individual games revenue) i mean if you are saying you get 20p games on the service, it might get people to hold off buying extra games.

At the end of the day, both MS and Sony will be losing money but recuperating it through software sales.
 
jroc74

jroc74

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Oct 27, 2017
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If true, many of us said this.

Its why a 399 PS5DE is still in play IMO.

Bigger loss on the digital console, not as big on the disc version.

And I still say if the PS5 is also 499, MS still took a bigger loss on their disc version.
 
ImaginaShawn

ImaginaShawn

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Oct 27, 2017
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Mezoly said:
that's the ecosystem or the brand overall. HW launched at a loss. Off course overtime it became profitable
www.eurogamer.net

Sony expects to recoup PlayStation 4 hardware loss at launch

PlayStation 4 hardware will make a loss at launch, but Sony expects to immediately recoup the costs when a typical user…
www.eurogamer.net www.eurogamer.net
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It literally says in the article I posed:

The PlayStation 4 is already profitable for Sony on a hardware unit basis, president and CEO Kazuo Hirai announced during its corporate strategy meeting this week.
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RoKKeR

RoKKeR

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Oct 25, 2017
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No surprise. Gotta get their foot in the door right out of the gate next gen. Seems like this approach is the best way to do it.
 
Kalor

Kalor

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That's not surprising considering what's in these consoles compared to last time. Theres a reason $599 was thrown about even if it was unlikely.
 
platocplx

platocplx

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Zok310 said:
Huh?
Prolly sell as many as they did current gen. The 360, their best console, with their best exclusives did not even break 90 million.
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100 million lmao. MS game is services, not consoles people have to kind of stop comparing this as their measure of success.
 
Yerffej

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Phoenix Down said:
I kind of think of game pass like a avalanche. It started off small and is slowing building momentum. Soon it's going to get so huge , it's going to be impossible to stop, even for Sony.
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Time will tell. I'm very impressed by it so far. I still don't know about 100 mil, but that doesn't necessarily have to be the goal if GP succeeds either.


DisturbedSwan said:
I think they'll be lucky to sell half that number to be honest.
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They've sold somewhere around that in the worst generation they've ever had.
 
Phoenix Down

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Oct 29, 2017
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Zok310 said:
Huh?
Prolly sell as many as they did current gen. The 360, their best console, with their best exclusives did not even break 90 million.
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I just had an epiphany . MS is giving everyone what they want . Games games games with game pass . Game pass in itself will be the biggest "exclusive " next gen . That's why MS is ok with taking a bath on hardware. It all makes sense now.
 
Musubi

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I can't see the PS5 DE being any less than $449. I think the split at launch is $449/$499 it would be floored if it was cheaper than that at launch. Shit I was prepared to spend $599 on a PS5 if needed.
 
ToddBonzalez

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kodax_shc said:
At this point sony has no choice but to match $499 for the disc based console. Wouldn't shock me if that means taking a small loss for now.
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Yeah, Sony would be playing with fire if they priced over $499. Could lead to another PS3/360 situation where they lose a bunch of ground, despite coming into the gen in a strong position.
 
TechnicPuppet

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Oct 28, 2017
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I think Sony will take a loss but it's probably not smart. The loss isn't just the loss on costs, it's the loss on what they could have potentially got away with selling well at. That will be way bigger.
 
jroc74

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ImaginaShawn said:
No, ps4 was pure profit day one.
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I'm going to go with...no it wasn't.

BOM to retail was 20 over BOM, but that wasn't the end of the total cost.

I get why some ppl don't like the BOM talk because it leaves the extra costs out. But...it should be seen as a good reference point for guessing the retail price.

Its why many of us still stuck to PS5 450 BOM equaling 499 retail. There will still be a loss at that price, but not as big. Also why many think PS5DE can hit 399. 450 minus 20 is 430.

Unless Sony is going for less losses on both consoles. I don't think they are.
Kalor said:
That's not surprising considering what's in these consoles compared to last time. Theres a reason $599 was thrown about even if it was unlikely.
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Yup. 549 at least.
 
evilalien

evilalien

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ImaginaShawn said:
Link to that?
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Sales are expected to increase significantly year-on-year mainly due to an expected significant increase in sales of game software and hardware as a result of the launch of PS5. Operating income is expected to be essentially flat year-on-year primarily due to the above-mentioned expected significant increase in game software sales and PS Plus sales, substantially offset by an expected increase in selling, general and administrative expenses related to the introduction of PS5 and an expected increase in the cost of sales ratio for hardware.
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Nostradamus

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Oct 28, 2017
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It makes sense for the the loss on S to be bigger. Costs don't scale proportionally with power, especially when certain technologies remain constant. The small SSD and "slow" RAM kinda implies an attempt from MS to mitigate BOM costs.
 
MrKlaw

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Oct 25, 2017
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Atheerios said:
Yeah, that's why I can't see Sony matching those prices. SSD tech Sony is using is even more expensive, they can't get below $399.
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SSD is a wildcard I think. Are sony using their own 'controller'? Its possible by taking some of that SSD inhouse they can bypass some of the costs associated with faster PCIe4 nvme drives (which would be needed for a similar speed). The APU might be a wash - bigger on XSX but faster on PS5 so yields might be limited for both, impacting cost. If yields were the same then PS5 APU should be cheaper.

The cooler on XSX looks expensive too but the PS5 one will surely have to also be high performance.
 

Fabs

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Aug 22, 2019
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Microsoft cut everywhere possible and is still taking a loss on the S but people believe Sony is going to cut a 20$ part and hit 400$?
 

Vector

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Feb 28, 2018
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They're betting on Game Pass having a great attach rate and honestly they're probably right to think that.

Series S is an amazing deal tbh, and the consumers are the real winners here.
 
JigglesBunny

JigglesBunny

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Oct 27, 2017
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That was pretty clear, yeah. The Series X is a beefy piece of kit with a lean price for what you're getting while the Series S is a pretty beefy box too that's selling for an insanely low price.
 
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