Rumor: Leaked minutes from Sega/Sony meeting reveal PS2 and Dreamcast on PSN, much mo

[Thespis721]

Originally Posted by TheGame

Losing $150+ per unit after the unit is actually sold is a big risk imo. It just happend to pay out for them more in the Ps2 era then it did in the Ps3 era.



Disney isn't just donating money. They're gambling it and hoping they turn a profit. Just because its a calculated risk doesn't mean its not a risk.

Disney makes money. Just because they'll probably lose money in the show's production on Broadway doesn't mean that they aren't going to make money. Same with SONY and Microsoft. They have plans to make money even if they are losing money. People have been losing money off systems since the 90s.

When the Lion King opened, they knew that the show would have to run for 10 years, selling out 110% every performance, to START to break even. People rarely make money off the show. They make money off the touring of the show, the merchendising, and the rights when other places do the show. Likewise, SONY and Microsoft lose money on the console, but they make money off the licensing of every game, accessories, and first party games, not to mention boosting Blu-Ray sales, advertising, etc, etc.

[TheGame]

Originally Posted by Thespis721

Disney makes money. Just because they'll probably lose money in the show's production on Broadway doesn't mean that they aren't going to make money. Same with SONY and Microsoft. They have plans to make money even if they are losing money. People have been losing money off systems since the 90s.

When the Lion King opened, they knew that the show would have to run for 10 years, selling out 110% every performance, to START to break even. People rarely make money off the show. They make money off the touring of the show, the merchendising, and the rights when other places do the show. Likewise, SONY and Microsoft lose money on the console, but they make money off the licensing of every game, accessories, and first party games, not to mention boosting Blu-Ray sales, advertising, etc, etc.

So, you're saying.. knowing the history of the video game industry.. that Sony releasing Ps3 at $600 while losing $150+ per sale wasn't a risk? If you think that, then you're wrong, period. And that's all I'm saying. If the system doesn't sell, then everything else you you listed as sources for making money won't sell.

[BreakABone]

Hmm, well the price was a risk, but don't think for the reasons you think... anyhow.

I think Sony's biggest risk/blunder/whatever was putting as much faith in Hi-Def adaption rates as they did. I mean the price would have been a lot cheaper or cheaper somewhat without the inclusion of blu-ray, I mean sure an add-on would have been a pain, but gives the people who want it the option to shell out some money.

Granted, I assume they expected a repeat of the Ps2 where being a DVD player helped push it early on in the generation, but blu ray while awesome still hasn't caught on.

If you sell a product at a 150 dollar loss, and it is still way over the average market value for a console especially a successful one, I wouldn't consider it a risk as much as dumb business, but that's me.

[Thespis721]

My point of view is more grand scheme then individual, which is how SONY views it. Selling things at a loss is a common business practice. We see it all the time. You ever go to one of those stores, like in Times Square, and they are busy and are doing business, but given the cost of rental, there's no way they are turning a profit from the store? That's called a loss leader. It's a common business practice where you put out something, even though it individually loses you money, so that it can have an overall profitable impact. Whether that be for name recognition, value, and results in selling elsewhere.

SONY and Microsoft do the same thing when they sell their systems at a loss. You could look at it as a risk, but all business tactics have some degree of risk. But in the overall standpoint, selling at a loss is less a risk then you would think.

[TheGame]

Originally Posted by BreakABone

If you sell a product at a 150 dollar loss, and it is still way over the average market value for a console especially a successful one, I wouldn't consider it a risk as much as dumb business, but that's me.

When selling something over priced, and it is sucsessful.. its a good calculated risk. When it fails to meet expectations, its a dumb buisness move and a bad risk. With that said, I agree with your outlook on it.

But either way its cut, its a risk.

Giving away anything for free or at a loss, and expecting it to pay off in the end through other means, is a risk.