When the PS3 launched in 2006, the price was considerably higher than it is today. Still, despite its $499 price tag, Sony lost money on each PS3 sold, and this continued up until 2010. However, the company isn't planning on a similar scenario with the PlayStation 4.
Eurogamer cites Sony CFO Masaru Kato as saying the company is not planning a 'major loss' for the PS4. Kato elaborated that the development of the PS3 required a lot of investments in R&D. The fact that the PS4 incorporates existing technology means less of an in-house investment this time around.
"Unlike PS3, we are not planning a major loss to be incurred with the launch of PS4," he's quoted as saying. "At the time we developed PS3, we made a lot of in-house investments to develop the chip, the Cell chip. Development of the chip saw the silicon processing and all the facilities invested by us ourselves. But this time, yes we have a team working on chip development, but we already have existing technology to incorporate and also product investment and all the facilities will now be invested by our partners, other foundries, so we don't have to make all the investment in-house."
Sony showed off the PS4 for the first time a few months ago. The company held a special event in February and talked at great length about the development of the PS4. Sony said that the PS4 has been in development for five years, which is a bit surprising as the PS4 seems to be based largely around existing PC technology. The console is based on x86 architecture with 8 cores, an integrated GPU, and 8GB of shared GDDR5 RAM. The graphical portion of the APU is said to deliver almost 2 TFLOPS of performance. Still, this goes hand in hand with what Kato was saying about not sinking huge amounts of money into developing chips and silicon processing.
While Sony offered plenty of information on the hardware, the company didn't actually show us the console itself. For that, we'll have to wait until E3, which isn't too far away. We also don't have any clue about pricing, which is obviously a very important factor for both consumers and Sony's bottom line.
Two, I think it would be better to have higher hardware costs as opposed to higher software costs. Ideally hardware price would be low and games would come down in price instead of go up. But there have been some quiet rumblings that game prices would be going up this generation in part to better subsidize the consoles. I rather pay an extra $50-$100 on the console than paying an extra $5-$10 per game over the life of that console. At only 2 games a year, in five years you've spent that same $50-$100 in extra costs per game, money that could have been better spent on another game.
MS was using PC hardware the last two gens and still lost money on each console out of the gate. The model was "release a console at a loss and make it up n the games" - giving consoles fairly impressive hardware out the gate and giving devs more to play with.
If this philosophy has changed to "Save money on the hardware, release the console at a gain," does anyone lose but the customers? The Wii did exactly that last gen, sold on a novelty, and it was recognized as a technical backwater for the whole generation. Don't get me wrong, it had some great games, but it's a pity the developers didn't have more freedom with the hardware than they had with it.
I've been console gaming since the NES. PC gaming as well, but that is beside the point. If in this generation console manufacturers not only use PC hardware but also release at a gain I am *finally* forced to ask the question - why not just PC game?
Whoa, you are right. I did read the article, but more just skimmed it... That headline is outright inaccurate. The CEO does NOT say that Sony is not planning to lose money on the console, as the headline of the article suggests.
Bad journalism much Tom's? Shame to say, but I'm a perfect example of why this is bad journalism... Polarizing and inaccurate headline + just skim the article = inappropriate reaction. If the writer of the article is reading this, do you have any explanation why the headline is outright inaccurate?