It’s not uncommon for hardware makers in all sorts of tech areas to take a loss on the initial release. Sony did it with the PS3, Amazon did it with the Kindle Fire – it’s a way to make sure you sell lots of the base kit, in the hope that the content sales later will make up for it. That’s what Sony’s doing again with the PS4, with expectations that game sales and PS Plus subscriptions will pave the way to profitability.
As it stands, for every $399 PS4 sold, Sony will take a $60 (£37) hit. However, nobody is buying a console without any games, so immediately Sony can factor in the profits from at least one game when someone purchases the PS4 and on top of that, Sony executive Masayasu Ito believes PS Plus will be a big day one seller as well.
While speaking with Eurogamer, he said he expected any loss to be recuperated straight away thanks to accessory and add-on items at the point of purchase. He’s so confident in-fact, that even with such a big loss on each console, Ito believes that most PlayStation 4 sales will be profitable.
However, while the hardware itself might not be making the most money, it’s the research that goes into a console that is the most loss making. A quick look at how much money Microsoft and Sony actually lost on the last generation of consoles is staggering, neither of them turning a profit for years after release of the Xbxo 360 and PS3.
KitGuru: This is the same sort of thing Nintendo did with the Wii U launch, making a profit back only when a game had been bought. That’s pretty easy to expect though with a new console launch, unless you’re my poor cousin. When he was about eight, his parents bought him a PS1, without any games. They left him with the demo disc for at least a few months. Poor kid. I don’t know how many times we played through the first level of Abe’s Odyssey together.