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CES 2008: PlayStation 3 MIGHT make money ... maybe ... we think photo

Speaking at the Consumer Electronics Show, everyone's favorite Tekken character lookalike Kaz Hirai has made an encouraging claim for investors -- the PS3 may make money one day! As we all know, the PS3 is currently a profit whirlpool, sucking profit into its murky depths and negating any cash made with software, the PS2 and the PSP. It's not all doom and gloom, however, as an optimistic Kaz is quick to point out.

"Component costs are coming down, and the number of components ... we are seeing a reduction," Kaz stated. "The 40 gigabyte PlayStation 3 obviously has fewer components and uses less power, which means that components required to dissipate heat, for example, can be smaller, so there is some cost reduction there ... So costs are coming down significantly."

With costs reducing, Kaz hopes that Sony will be on the "positive side of the equation" in due time. The new fiscal year begins in April and Hirai is aiming for profits before it's over. A tall order, considering how damaging the thing has been for Sony thus far, but far be it from us to discourage a man with ambition.  

[Thanks to Aerox, the bubbly chocolate]


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25 comments | showing # 1 to 25

ShadowXOR's Avatar
ShadowXOR at 01/08/2008 15:45
I love the Photoshop, Sterling.
Snaileb 's Avatar
Snaileb at 01/08/2008 15:46
So he didn't say anything about RIDGE RACER??
ShadowXOR's Avatar
ShadowXOR at 01/08/2008 15:49
You can see they're washing away there worries with that bottle there...nothing a little alcohol can't temporarily fix.
Hiltz's Avatar
Hiltz at 01/08/2008 15:52
That just tickled my funny bone. Nicely done, Destructoid.
The Round Peg's Avatar
The Round Peg at 01/08/2008 15:55
Well, Sony will make money off the PS3 by next year... from Blu-ray royalties.

The PS3 basically helped Blu-ray win the war, and home movie royalty is a HUGE profit stream. That's why Toshiba is fighting so hard to push their HD DVD as the next standard format, because Toshiba has tasted the sweetness of the royalty fees from their DVD format, and they don't want to give it up.

Maybe the PS3 will not start earning anything from gaming next year. However, Sony - the company as a whole - will start racking in $$$ with Blu-ray royalties - all thanks to the PS3.
vp360's Avatar
vp360 at 01/08/2008 16:15
i doubt it
Cheeburga's Avatar
Cheeburga at 01/08/2008 16:17
Giant enemy crabs?
jeep's Avatar
jeep at 01/08/2008 16:40
My only issue is that this statement is aimed at gamers or investors. If it was aimed at gamers we could be seeing console costs going down but if its aimed at investors this only means that the cost of production is going down raising the profit margins on PS3's sold not price cuts.
jeep's Avatar
jeep at 01/08/2008 16:41
My only issue is that this statement is aimed at investors not gamers. If it was aimed at gamers we could be seeing console costs going down but since its aimed at investors this only means that the cost of production is going down raising the profit margins on PS3's sold not price cuts.
Velt's Avatar
Velt at 01/08/2008 17:11
Yeah I saw this guy at On the Spot show last week, he put several xbox360 controllers inside his pants...
Velt's Avatar
Velt at 01/08/2008 17:13
Las comment is OFFTOPIC. Please ignore it.
Y0j1mb0's Avatar
Y0j1mb0 at 01/08/2008 18:06
As a Sony fan I think they need to gagged this guy from saying comments like this.

wardrox's Avatar
wardrox at 01/08/2008 20:02
Sterling, what a fanboy.
Quest's Avatar
Quest at 01/08/2008 20:13
wardrox says:
01/08/2008 20:02
Sterling, what a fanboy.



hehehe to easy jim ... just to easy :))))
TheStripe's Avatar
TheStripe at 01/08/2008 21:13
Wow, This has been up for hours and the posts are only in the teens. Are the fanboys playing ratchet or something?
Jarmer's Avatar
Jarmer at 01/08/2008 21:21
I think they all sold their PS3's and are off playing desktop tower defense.
Jim Sterling's Avatar
Jim Sterling at 01/08/2008 21:43
Quest: You found all those hundreds of posts where I bash the PS3 hardware yet? I'd get cracking on that. I challenged you to do it, don't let me down.
TheStripe's Avatar
TheStripe at 01/08/2008 22:02
@Quest - Too bad english isn't "to [sic]" easy.

LERN TO RITE RITE N00B


Besides, this is obviously Kaz grasping at straws. I mean, we've all heard him speak english. It's not so broken that he stumbles over sentences, IIRC. He's stumbling because he's making it up on the spot.

"Wait, really? Component costs on new hardware that isn't so new anymore are coming DOWN?!!?!?!?!eleventy? I best be gettin' me som dat sony stocks, y'all."
---AMARU---'s Avatar
---AMARU--- at 01/08/2008 22:41
fuck off jack
Necros's Avatar
Necros at 01/09/2008 00:00
Seriously, Jack's such a dick.
anomalous underdog's Avatar
anomalous underdog at 01/09/2008 02:33
"The man needs profits, not prophets."

"What? You lost me there old chap."

"Nevermind. It'll make sense when its written down."
DrXym's Avatar
DrXym at 01/09/2008 04:12
I see no reason they shouldn't be profitable. A simple example (based on some hypothetical numbers). At launch, the yield for Cell processors with 7 or 8 working SPUs might have been 15% and now it might be 60% AND there are more on a wafer (since it's now 65nm). So the price of Cells would drop to below 1/4 of its original production costs. And if Sony go 45nm and the yields increase again, it will drop even further. Same principle applies to all the other chips. Cost savings would also have been realised by refining the board and dropping BC. More cost savings fall out of the move to 65nm and the reduced requirements on heatsinks, fans and PSU.

Yields for blue laser diodes were supposed to be awful at launch but now they sell for dollars and soon cents. So again, a large original expense is next to nothing. It wouldn't surprise me if BD drives only cost $30-50 to make.

They must be close breakeven on the price of the console and they're bound to claw a lot of that back on software sales and Blu Ray sales. Who knows what the tipping point will be, but I don't believe they're that far off.
Burnt Meatloaf's Avatar
Burnt Meatloaf at 01/09/2008 05:42
Old model: Lose money on console, make up for it on games.

New model: Lose money on everything, make up for it on Blu-ray licenses.

Nex-gen model: Lose money, make up for it on Nintendo shares.
snapperdragon's Avatar
snapperdragon at 01/09/2008 06:34
With all the R&D and marketing dollars in the PS3 and BR, it may end up being that the tech becomes obsolete before it is widely adopted (BR, that is). I agree with the other poster that normal DVD sales are going to be very tough to surpass. IF this ever happens, it may be about another 6 or 7 years down the road. I guess that's why the PS3 has a 10 year lifecycle.

All during this time, other companies will be trying to create a solution that is completely digital (which I personally do not like, I like paying for something physical that I can share and resell, if I want to).

2008...forgetaboutit. More losses for Sony due to PS3 and BR, especially with the deals they are giving studios to jump ship to BR.
Fading Star's Avatar
Fading Star at 01/17/2008 01:10
Yay?
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