Sony: Losses on PS4 Will Be Less than on PS3

UPDATE: The headline of this article has been updated to more accurately reflect the content of the cited quotation.


Sony does not expect to incur losses on the PlayStation 4 at the same level it did with the PlayStation 3.

Speaking in an interview with Bloomberg, Sony Computer Entertainment CEO Andrew House said that the company “will not generate anything like the losses we did for the PlayStation 3.”

According to the Bloomberg report, Sony lost more than $3.5 billion in 2007 and 2008 as the machine suffered from poor sales. CEO Kaz Hirai has said the PlayStation 3 didn’t turn profitable until late 2011.

For the PS4, Sony aims to avoid losses in part due to a smaller investment in the PS4 relative to the PS3, CFO Masaru Kato has said in a recent earnings call.

Kato said Sony spent “hundreds of millions” in designing the PS3′s chip set and “billions” on semiconductor fabrication because these technologies were not readily available.

“There were no manufacturing capacity or technology to manufacture these chipsets. So the amount of investment that went into PS3 was quite big,” Kato said.

In contrast, the PS4 is a much “lighter” platform in terms of investment due to its X86, PC-like architecture.

“At the core, we are taking off-the-shelf technology available and we are putting our proprietary technology around that core chipset,” Kato said. “The amount of investment is much, much smaller. I cannot give you the absolute amount.”

Sony’s PlayStation 4 is expected to launch this holiday season for $399, $100 less than its Microsoft counterpart.

via GameSpot.

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20 Comments on Sony: Losses on PS4 Will Be Less than on PS3

Kazoo

On August 12, 2013 at 7:41 am

Not trying to be a nuisance, but I feel your last sentence “…$100 less…” is showing a lot of bias. Yes, it’s a true statement, but I feel it’s unfair and nothing more than a shot at Microsoft, otherwise contributing nothing to the article.

(Not an MS fanboy… actually prefer the PS3 for what it does, prefer XBL for what it does).

Ian Miles Cheong

On August 12, 2013 at 7:43 am

There is no bias. The console costs $100 less than the Xbox One and in an article about the pricing of the console, that seems fit to mention.

Kazoo

On August 12, 2013 at 8:06 am

I’ll have to respectfully disagree that the price comparison has anything at all to do with whether Sony will lose money on the PS4. You didn’t price compare to the Wii-U (which is cheaper). You didn’t point out the fact that the XB1 has more hardware (required by MS, but still more hardware) and that outfitting the PS4 with similar hardware brings the price comparison much closer, if not equal.

M.A.

On August 12, 2013 at 8:44 am

@Ian

I too felt like this article was fairly biased. The title “Sony does not expect to incur losses on PS4″ isn’t true: Sony does expect losses on PS4, as is said in the actual article. Instead, the article has a misleading title, and considering the positive nature of this incident, and contrasting with several negative misleading titles for Microsoft articles, I’m disinclined to believe it’s simply benign oversight.

Yeti

On August 12, 2013 at 9:15 am

Well, Ian’s biases are pretty obvious in nearly everything he writes. Don’t forget he posted an article called “Over 12k Sad Trolls Sign Petition to Bring Back Xbox DRM” or something along those lines. Plus there’s a number of reports he’s done on gender-related stories which are borderline at best, but has flat-outed stated that they’re ‘sexist’ or ‘in bad taste’ as a matter of fact when they’re just someone else’s opinion.

Expecting impartiality from Ian is like expecting wit from the Wyman Brothers.

Yeti

On August 12, 2013 at 9:17 am

Oh, and by the way, I also hate the Xbox DRM/always online rubbish and will not be buying an Xbox One even with those decisions being reversed. But that doesn’t mean I can’t spot partisan, personal judgements portrayed as truth just because I happen to agree with it.

thedog

On August 12, 2013 at 10:30 am

Sorry guys, but you’re sounding an awful lot like fanboys. Not saying you are, but just coming in and reading the article, than reading the comments, you sound just like fanboys. I don’t find the article biased at all. Granted the title is a little misleading as the very first sentence points out (“losses at the same level” versus do not expect to incur losses. Two very different meanings).
What’s funny is how everyone knocking this article is quick to point out that they “aren’t” fanboys and that they prefer the Ps3
@Yeti His earlier article on the trolls wasn’t meant to be impartial. It was his opinion. Yes, writers are entitled to there own opinion. So bringing up that article is just wasting space and our time. Your whole statement is full of your own bias against Ian, Basically you’re spouting your opinion as if it were fact and we should all just listen. And you talk about his writing.
@M.A. The first sentence in the article already states that fact. He’s simply saying that there losses wont be as bad due to the cheaper architecture. Like I said, the title is a little misleading but the article isn’t. How is this biased?
Oh and Kazoo, the $100 bucks cheaper is a fact, not an opinion of bias, It is a fact of life. Not even a new fact. Would you prefer if he left the facts out and simply spun a fairytale for you, or would that be too biased. Honestly, you expect us to believe your not a fanboy.

Kazoo

On August 12, 2013 at 10:52 am

@thedog:

I noted (twice, in fact) that the $100 was factual. My point is that it had no bearing in this article and only serves to feed the inference that the PS4 is better because it’s cheaper. Otherwise is has no bearing on the subject of the article.

Biases come in many forms, and most of them involve the careful telling of specific truths while avoiding others.

Whether I am a fanboy or not also has no bearing on the discussion (though I admit I did attempt to avoid that issue with my comments). If you disagree with my point, feel free to argue the point. Attempted slights against my character gain you nothing.

thedog

On August 12, 2013 at 12:27 pm

@Kazoo I apologize if I sounded harsh. It came out a little harsher than I intended. As far as the fanboy thing, sorry but you sound like one bigtime. Stating already know facts does not make one bias. The fact that it is $100 dollars cheaper makes it a more attractive offer to most, which in turn means it will probably sell well, which means more money in there pockets, more games sold, thus less of a hit for them. Granted it’s not based off of selling cost to production costs, but money in the pocket is still money and ultimately factors into the equation. (in a round about way).
On another note, if Microsoft is greedy enough to overprice there unit, when they know good and well what the competition is selling theirs for, well, they deserve every bit of bad press they get. It’s that way in every market, not just this one.
Personally I like knowing all the facts not just the one people might think to be politically correct.

Phil Hornshaw

On August 12, 2013 at 12:28 pm

@Kazoo

In my mind, it’s important context — especially if the consoles are similar in technology and, one assumes, up-front investment. That Microsoft is selling for $100 more could give insights into the costs of the included tech, or on Sony’s willingness to accept less profit (or break closer to even) on consoles. If PS4 and Xbox One cost the same or roughly the same to make, it’s definitely important. Conversely, if PS4 costs $100 less to make or some margin thereof, that’s also important.

Kazoo

On August 12, 2013 at 12:46 pm

@Phil — That’s the problem. It isn’t in context. If the article contain information about MS cost or projected losses on the hardware, then it applies. If Sony was using more mainstream production and MS was developing new hardware and that was included in the story, it applies. But, as it is, it has nothing to do with the topic of the story. It’s just out there.

I agree that the $100 difference is an important piece of information, but not alone and not in this story.

@thedog — Unfortunately, that’s not true. Stating specific facts from a pool of facts promotes those facts and demotes others. If the article ended with, “selling for $399, but doesn’t include a camera or motion detection harware such as the XB1 Kinect,” that would be bias in the other direction, as it implies that the PS4 is inferior to the XB1 because it doesn’t have the same level of hardware.

Both facts are true, yet neither fact has anything to do with whether Sony will or will not lose money on every unit manufactured.

M.A.

On August 12, 2013 at 3:37 pm

@Phil

I want to say thanks re: the update on the title. Not sure who’s work that was, but I respect the staff for the effort. Though I rarely comment (in fact, this is the first article that a comment has gone through on, for some reason), I’ve been following Gamefront since ME3, and I love the community interaction here. Keep up the good work!

Huntsman06

On August 12, 2013 at 4:01 pm

I always thought that the fact Sony DID invest all the time in money making their own proprietary hardware was for the ps3 was supposed to redefine how future models of the PlayStation would be. Like an investment, spend now to make lots more later.

I respect their choice though, not every day you see a company as big as Sony (in a way) admit that it’s best to leave some things to those who already know how to do it. Although due to the fact that the ps4 and xbox one both have similar architecture which is in fact much like PC architecture, I’m expecting to see many more games available for the PC this generation over last gen.

thedog

On August 12, 2013 at 11:19 pm

@Kazoo Well it obvious that you aren’t about to budge on the subject and to each there own. But the fact that every fact thrown out there boiled down to them making money. If it had been on something like say, need to connect to the internet all the time, or something like that, yeah I would agree, but money related matters usually boil down to the same subject. So it is relevant. It was a totally off the subject fact.
If slightly going off the supposed subject is what is bothering you, than you should be hating journalist as a whole. I’ve seen very few who simply stay on the one subject alone. Most will go slightly off track to bring a point home.
By the way, where does it say in the title or article that he was simply talking about production cost vs selling cost. Answer, it doesn’t say it. You assume it. It was the main point in the article but not necessarily the only point. You can hate the article if you want but lots of us have no problem with it.
Besides, didn’t you no. Hate leads to stress. Stress leads to health problems, which ultimately lead to heart disease and heart attacks. Moral of the story. Don’t hate and live longer :) Make love man, not war.

thedog

On August 12, 2013 at 11:25 pm

Well this is awkward. Part of it got cut out so it doesn’t totally jive, and the smiley face got put in a very weird place. Yeah…….uhm, Ok. Good talk.

Kazoo

On August 13, 2013 at 7:05 am

The lead of the article is “Sony does not expect to incur losses on the PlayStation 4 at the same level it did with the PlayStation 3.”

Every statement after that is supposed to support and further define that paragraph or the support paragraphs later on.

I think you could legitimately question even stating the sales price, but it isn’t biased. Comparing the price to the XB1 only serves to promote thge PS4 over the XB1, but does not support the story, thus bias.

I find your statement “Most will go slightly off track to bring a point home” very interesting. What, exactly what the point the reporter was trying to make? It’s obvious you say? I agree. And it’s biased and designed to promote one console over the other, which is not the purpose of this article. It’s not an op-ed piece.

thedog

On August 13, 2013 at 10:30 am

@Kazoo What do you say we agree to disagree. I’m obviously not going to convince you and visa versa. Personally I hate all consoles, so I would be the one you should call biased. I’m a pc man and hope consoles fall off the face of the earth. So you can call me biased and I’ll just smile and nod..
Have a good one.

Kazoo

On August 13, 2013 at 11:56 am

@thedog:

That’s fine.

There’s nothing wrong with being biased. We all have biases. One job of the journalist, I believe, is to minimize the bias in an article.

As for your dislike of consoles… I can understand that. Console games have certain watered down the quality of a number of PC games. On the other hand, though, I feel that relatively cheap consoles have brought mainstream gaming to a lot more people, and more people playing can’t be bad regardless of the source.

thedog

On August 13, 2013 at 12:55 pm

Yes more people playing is a good thing. Only one problem. Because of console, pc games have been water down and we are getting less games now because a lot of companies are doing console exclusives. A lot of companies who got where they are now because of computers and there gaming community, are ignoring computers and they’re users in favor of consoles.
So yes, more players are good, but pc is feeling the brunt of the results. It’s the exclusives ( The last of us, for example) that hurt everyone. The pc has yet to see Red Dead Redemption. Oh well, what can you do.

Kazoo

On August 13, 2013 at 2:23 pm

Then you should be all for the new consoles, since they’re basically PCs in a fancy box. It should make it much easier for games to be on all three platforms, aside from MS or Sony making them exclusive.