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]
Jim Sterling serves as reviews editor for Destructoid.com, head of the Podtoid podcast, and produces a number of news stories, original features, one-of-a-kind videos. With his passionate argumentative style, controversial opinions, harsh delivery, and dedication to brutal honesty Sterling is a name that you can't help but recognize.
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Contest:
3:45 PM on 01.08.2008
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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.
01/08/2008 20:02
Sterling, what a fanboy.
hehehe to easy jim ... just to 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."
"What? You lost me there old chap."
"Nevermind. It'll make sense when its written down."
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.
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.
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.