It’s no secret that Sony as a whole isn’t very profitable, with billions lost by its electronics division every year. On top of that, Sony’s PlayStation business dropped in sales by over 12% last year, and profits plummeted from $310 million to $18 million, but the company is confident that the new console launch won’t make things worse.
The launch of the PS3 destroyed PlayStation’s healthy financial figures with every console being sold at a significant loss, but it is believed the PS4 will be sold at a profit. SCE UK’s Fergal Gara wouldn’t be drawn on whether the console itself would be profitable when talking to GI.biz, but guaranteed it would launch before Christmas in the region:
Quite simply we don’t want to over promise and under deliver. We’re not in mass manufacture right now so it’s impossible to be absolutely precise. I’m confident we’ll have very significant stocks for the UK and absolutely delighted we’re going to launch before Christmas.
There’s no point in looking at the console in isolation. Is PlayStation going to be a profitable business? It needs to be and it intends to be a profitable business over the next year.
He said that the $399 price, which is $100 cheaper than the Xbox One, wasn’t made as a result of Microsoft’s price announcement:
The reference point was PlayStation 3. It wasn’t the competition because up until very late we had no idea what their price was going to be. Getting to a price point doesn’t happen in the final days and weeks, it happens years in advance as you plan for a target price point alongside your engineering, design and architecture of the system.
You have to hit that combination of price and performance in power. I’m delighted in the horsepower per pound that we’ve delivered, it genuinely is one very high powered machine. It’s uncompromisingly built for one purpose above all other. Gaming, and performance around gaming, is front and center. It’s been a considered effort for seven years, not a knee jerk decision in the last days and weeks.
Among Sony’s moves to make a profit is the announcement that you’ll have to pay to play online with PS4, by getting a PS+ subscription, but Sony hasn’t decided to block used games and charge for that.
Balancing good business and good consumer relationships is always tough – do you think Sony has done it so far?