Did Sony's price point just backfire on them?

cache. Our server and security companies are working 24/7 to keep Wall St. Cheat Sheet safe and secure. Thanks!
Will Weakening Yen Ruin Sony’s Plans for Playstation 4?
August 10, 2013
Page 1 of 2

As the yen continues to weaken, Sony Corp.’s (NYSE:SNE) upcoming PlayStation 4 console is already looking at losses ahead of its debut for the U.S. holidays. Analysts are predicting a further 10 percent rise for the dollar putting the yen at about 106 to the dollar, compared to the current rate of 96.6 yen to the dollar and 86.7 yen to the dollar at the beginning of 2013.


The swing in exchange rates is problematic for Sony because parts and production are paid for in dollars rather than yen in a strategy aimed at shielding itself from, at the time, a strengthening yen. With Microsoft’s (NASDAQ:MSFT) Xbox One console being released less than a month apart, the exchange rate issue is putting even more pressure on Sony to succeed in its bid to release the PlayStation 4 for $399 opposed to Microsoft’s Xbox One’s asking price of $499.

 

Discussion Info


Last updated July 4, 2018 Views 0 Applies to:

* Please try a lower page number.

* Please enter only numbers.

* Please try a lower page number.

* Please enter only numbers.

Sony won't last long companies like Apple & Samsung have pretty much stolen most of their customers from the Walkman, phones to their Tv, they should have just sold off their entertainment part to Dan Loeb 4 days ago

Eh, they're not in as bad of shape as Nintendo. The Wii U is being sold at a next gen price for hardware that is current gen practically, and they're taking a loss on every console out the door.

-

Sony at least has a next gen console that will be competitive with X1 (even though I think it won't be as good).

Most consoles, make a loss when they first release. And that would most likely include the X1 as it comes pre-packed with the Kinect.

-

As they have stated that the Kinect costs just as much as the console to make. That is $250 for the Kinect and $250 for the console.

-

Now tell me that even Microsoft are making a profit on their console, with all the new upgrades and everything, they can make the console for under $250.

-

Most, if not all consoles make a loss at the start of their life, until, parts become cheaper. this is no different, and exchange rates can go up as well as down.

They tried to hedge behind our weak dollar and their Yen lost value. Not devastating in the long haul but definitely affects their return on the initial launch run of the PS4's.

wont be near as bad as the 3 billion the ps3 launch cost them.

[quote user="HairyLoveSpuds"]Most consoles, make a loss when they first release.[/quote]lf by most you mean the original Xbox, Xbox 360, PS2 and the PS3. I believe Nintendo's first console sold at a slight loss is the Wii U.

 

Selling consoles at a loss is a relatively new thing.

lol why are we talking about the ps4 in a xbox forum. anyways all this is bull crap.

10 years from now none of this will matter and both companies will still be doing great and releasing a new console

[quote user="ToppingClover96"]

Sony won't last long companies like Apple & Samsung have pretty much stolen most of their customers from the Walkman, phones to their Tv, they should have just sold off their entertainment part to Dan Loeb 4 days ago

[/quote]

Wow. Just.... Wow.

[quote user="HairyLoveSpuds"]

Most consoles, make a loss when they first release. And that would most likely include the X1 as it comes pre-packed with the Kinect.

-

As they have stated that the Kinect costs just as much as the console to make. That is $250 for the Kinect and $250 for the console.

-

Now tell me that even Microsoft are making a profit on their console, with all the new upgrades and everything, they can make the console for under $250.

-

Most, if not all consoles make a loss at the start of their life, until, parts become cheaper. this is no different, and exchange rates can go up as well as down.

[/quote]

No doubt they take a loss, you're right on that account. But the PS4 price point was set lower than expected and now with the devalue of the Yen it's even lower.

Of course we wont know the damage if any until next year 

Kiddeth, I know what your saying. But they were never planning a major loss in the first place. Perhaps $2 in every $100, Unlike the PS3 when it was released it started out losing $13 in every $100.

-

As with most consoles now, the majority of their money is made up from Downloads, Live/PSN, Licensing, Etc. - Just the fact that they are now going to charge for PSN multiplayer, gives an indication that they will again turn a profit after the original sales, as R&D is now out of the way, and it's on to production, especially if a lot of people are going digital, like a lot on here are saying.

-

see link for the 1.7 billion Yen profit made from just their  gaming division, down from 29.3 billion Yen, but that also includes all the amount of money they dropped into developing the PS4, so you can expect a drop from one year to the next, when you are developing and producing a new product.

-

www.sony.net/.../12q4_sony.pdf

-

www.eurogamer.net/.../2013-05-09-sony-unlike-ps3-we-are-not-planning-a-major-loss-to-be-incurred-with-the-launch-of-ps4

-

www.vg247.com/.../sony-fy13-ps3-sales-down-vita-flat-gaming-division-profit-down

-

uk.ign.com/.../sony-not-anticipating-a-loss-with-playstation-4-launch

* Please try a lower page number.

* Please enter only numbers.

* Please try a lower page number.

* Please enter only numbers.