Sony CEO: No pricecut, never make a hardware profit.

[Ace Pace]

Or so say translators from Gamespot

Among the money quotes of this interview are Stringer admitting the Wii is fun:

Stringer also had some choice words to say about one of the PS3's rivals, the Wii. He admitted to playing Nintendo's console, which he diplomatically described as offering "a different experience."

[snip] "The Wii is a well-made device that has found a new target group. For a while, we held the same target group with the SingStar karaoke game. But perhaps we neglected to pursue that avenue. PlayStation games are rather designed for those who play a lot. Although it's a different strategy, it pays off

Nintendo has the better business model*:

The major difference lies in the fact that Nintendo makes money with the hardware alone, which may be a superior business model."

"We will never make a profit off the hardware":

Unfortunately, by his own account, the CEO said that it will be a while until the PlayStation 3 hardware becomes profitable. Although Sony's PS3 manufacturing arm has hit a "production bottleneck" due to demand, Stringer joked that Sony won't make back its hardware-production cost "for as long as I live."

All in all, not a bad set of snippets. Shame Stringer wasn't there from before the PS3 launch, maybe it could have been less of embaressment. Either way, it seems Sony is getting a hand on the PS3 and how to make it work with PSN games and alot more high quality titles.


*: Raise your hand if you were suprised by this.

[DaveJB]

Sony just went completely out of control with the hardware costs on the PS3; it almost seems like no-one there ever stopped to question whether or not they'd ever be able to offer the PS3 at a reasonable price and still make a profit.

That thing about no price drops also lends some credence to what I said in another thread about Sony demanding that UK retailers return 40GB PS3s so that they can be upgraded to 80GB models, rather then offering them at reduced prices.

[Stargate Nerd]

Sony just went completely out of control with the hardware costs on the PS3; it almost seems like no-one there ever stopped to question whether or not they'd ever be able to offer the PS3 at a reasonable price and still make a profit.

That thing about no price drops also lends some credence to what I said in another thread about Sony demanding that UK retailers return 40GB PS3s so that they can be upgraded to 80GB models, rather then offering them at reduced prices.

Well you have to consider that Sony couldn't have known that Nintendo would have explosive success with the Wii and steal away the entire casual market that has always helped Sony tower over it's competitors.

They probably expected to lose a little bit of ground to Microsoft due to late launch and high price but in the end enjoy the market leader position once again.

[Medic]

Sony just went completely out of control with the hardware costs on the PS3; it almost seems like no-one there ever stopped to question whether or not they'd ever be able to offer the PS3 at a reasonable price and still make a profit.

That thing about no price drops also lends some credence to what I said in another thread about Sony demanding that UK retailers return 40GB PS3s so that they can be upgraded to 80GB models, rather then offering them at reduced prices.

I wouldn't go so far as accusing them of simply not balancing the risks and rewards... but seeing the world through rose-tinted glasses? Oh yeah, cause they they probably thought they could've gotten away with it (if it weren't for those meddling kids and their lousy mut) with a repeat of the PS2's market share and ultimate installed base.

Unfortunately for them, the X360 beat them out of the box and was not, like the Dreamcast, doomed to failure because of circumstance. The X360 came at the right time, with good hardware and a relatively high price that Sony did their best to make cheap. (in addition to a sleu of other PR disasters) They started behind, technically like they did against Dreamcast but moreover they lost their momentum and in the mind of the consumer, lost this position that "Sony's is the system to buy" because "it has all the games." All that wasn't true when the system launched and the only people that did believe it did so on faith. (and got a PS3 on launch day)

I'm willing to bet PS3 could turn a profit... when you sell 140 million of them. If that's how the board meetings went, then someone someone failed to inject a healthy dose of reality-based reality right then and there. If you look at that last link, it confirms: Sony's still serious about a 10-year console.