The PlayStation 4 won’t be a loss leader

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LossLeader

Even though it launched at a price way, way above what the average gamer was willing to spend, Sony’s PlayStation 3 was a loss leader; sold under cost in the hopes that money would be made through software sales.

"Unlike PS3, we are not planning a major loss to be incurred with the launch of PS4," Sony’s CFO Masaru Kato told investors in an earnings call. (via Eurogamer)

"At the time we developed PS3, we made a lot of in-house investments to develop the chip, the Cell chip. Development of the chip saw the silicon processing and all the facilities invested by us ourselves. But this time, yes we have a team working on chip development, but we already have existing technology to incorporate and also product investment and all the facilities will now be invested by our partners, other foundries, so we don’t have to make all the investment in-house."

This could end up meaning one of two things; The next PlayStation is going to end up being pretty damned expensive or it’ll just be far, far cheaper to produce. My money’s on the latter one; with it using heavily tweaked but already existing PC hardware, there won’t be extra costs incurred by unproven tech like that damned Cell processor. Other bits of tech, like then new Blu Ray and gigabit networking have become significantly cheaper too.

Last Updated: May 9, 2013

Geoffrey Tim

Editor. I'm old, grumpy and more than just a little cynical. One day, I found myself in possession of a NES, and a copy of Super Mario Bros 3. It was that game that made me realise that games were more than just toys to idly while away time - they were capable of being masterpieces. I'm here now, looking for more of those masterpieces.

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