What if the Playstation 3 was discontinued?

[meStevo]

Could PlayStation get the axe? - Video Game Feature - Yahoo! Video Games

Could PlayStation get the axe?
Some Sony "sacred cows" scheduled at slaughterhouse

By Mike Smith

Drastic cost-cutting is in Sony's future, and the games division could be one of the business lines on the chopping block.

That's the specter raised by a Times of London piece published Monday, which credits anonymous company sources with news that a massive restructuring program, beginning in a few weeks, will "abolish or fundamentally alter many of Sony's long-established business practices."

That doesn't necessarily mean the end of the PlayStation, but it's hard to see Sony quitting any of its major markets, PlayStation or otherwise. Can you imagine shopping for a TV without checking out the Bravia line, or for a laptop without looking at Vaio?

Although Sony's games division reported improving performance last year, it still lost over $400 million in the third quarter of 2008, and although the PS3 is the most expensive of the three major consoles, it's by far the costliest to produce. After a disappointing holiday season and the prospect of harder economic times on the horizon, could Sony's games division be contemplating a software-only future?

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While highly unlikely, it isn't meeting the goals they keep setting every year (did not reach profitability in 2008 as promised) and it is very likely after Sony's $1b loss (first ever in company history) that something like the Viao or Bravia or even Playstation may disappear forever.

Thoughts on if Sony went the Sega route?

 

[jlhugh]

i doubt it. microsoft is cutting back too, but they are not going to cut back the gaming division. just like sony they have a bunch of divisions in the company. i bet this is not one that will get the cut backs.

 

[meStevo]

Microsoft is making money though, their cutbacks were to become leaner and more efficient... Sony's were to reduce the bleeding.

Sony made cutbacks, and said it wouldn't touch SCEE, but now that they've posted a $1b loss for the year there's talks of bigger cuts.

I want the Playstation around, need more than just MS and Nintendo directing the path consoles take.

When you are laying people off and contemplating removing entire lines of business, it's got to be harder to justify the gobs of R&D cash that goes into what will become the Playstation 4, no?

 

[meStevo]

Also, every 80gb PS3 is still costing Sony just under $450 to produce per the recent isupply report, the expected March/April price drop to $299 could be a painful one thanks to that figure and the poor conversion rate in this economy.

It could be argued that dropping the price before late this year could be unwise until they can revise the hardware again, and just be 'content' with their 3rd place position in the market.

 

[yourbeliefs]

I'm sure Sony can come up with other ways to cut down on the bleeding other than completely eliminating their most famous electronics lines. I think the PS3 will be fine.

 

[Zookster]

With gaming one of the few areas of the economy doing well over the past year or so, I can't imagine Sony completely giving up on that entire division, which also includes the PS2 and PSP. They've just got too much invested there to abandon it entirely.

 

[scottbakertemp]

I could see them making cutbacks but not removing the product altogether. They would be stupid to stop selling the PS2, even though it "sort of" competes with the PS3.

Maybe ditching the "home" service, getting rid of Veronica Belmont's PS3 shows and what ever other shows (I haven't actually seen any of them) they have on the PS3.
Maybe dropping the price of the PS3 by less than a manufacturing price drop.

After the
- big root kit controversy
- the exploding notebooks
- the crappy PS3 eco system
- bad execution of blue ray (they're still updating the specs)

It wouldn't hurt my feelings if they just stopped a lot of products,
-Scott

 

[JamesJ]

I see it this way, A company is going to do what it can to survive, do I think that Sony will drop the Ps3 no, but I do think that would be some of the first groups to go, as the OP said I couldnt imagine not seeing bravia in the store (vaio I am not that concerned about as I am a mac guy ) also I dont really see them dropping movies, cutting back yes, dropping no. so Ps3 now, no, but if things keep up, bye bye PS3 (and maybe ps2) I think this time around we should look at their game division, see if that stays or goes, forget hardware, think software.

 

[Hall]

[ They would be stupid to stop selling the PS2, even though it "sort of" competes with the PS3.

I really don't think they compete against one another. That's like saying Toyota's Corolla competes against the Lexus LS They're two entirely different classes. Sure, in the case of the Playstations, they both "play games" just like the Corolla and the LS will get you from point A to point B. Someone with $300+ probably won't give the PS2 a lot of consideration, just like someone with a $150-200 budget can't consider the PS3.

 

[Hall]

Also, every 80gb PS3 is still costing Sony just under $450 to produce per the recent isupply report....

Those reports are interesting, but no one can even speculate what Sony pays for components or the labor and other associated costs. Has Sony ever acknowledged that they lose money, break even, or make a (small) profit on their consoles ? I doubt they make much profit and more likely they break even or close to it and the console is simply their "loss leader" and they make up the loss on games.

 

[yourbeliefs]

I really don't think they compete against one another. That's like saying Toyota's Corolla competes against the Lexus LS They're two entirely different classes. Sure, in the case of the Playstations, they both "play games" just like the Corolla and the LS will get you from point A to point B. Someone with $300+ probably won't give the PS2 a lot of consideration, just like someone with a $150-200 budget can't consider the PS3.

Of course Sony could have alleviated that problem if they had just kept the goddamn backwards compatibility in ALL of the PS3 models, at least selling on the "Keep playing your old games on the same console as our great new games" ticket. That seemed to work pretty well with the PS2.

 

[yourbeliefs]

Those reports are interesting, but no one can even speculate what Sony pays for components or the labor and other associated costs. Has Sony ever acknowledged that they lose money, break even, or make a (small) profit on their consoles ? I doubt they make much profit and more likely they break even or close to it and the console is simply their "loss leader" and they make up the loss on games.

Here's a bit of a breakdown.

Teardown of Sony's PlayStation 3 - BusinessWeek

 

[meStevo]

Those reports are interesting, but no one can even speculate what Sony pays for components or the labor and other associated costs. Has Sony ever acknowledged that they lose money, break even, or make a (small) profit on their consoles ? I doubt they make much profit and more likely they break even or close to it and the console is simply their "loss leader" and they make up the loss on games.

Yes, last year they promised investors/shareholders the PS3 would be profitable by the end of 2008, and then backed off the statement as Q4 started saying it would be unlikely. In Q3 the games division lost $400m.

Here's an article about the yen and how it's affecting Sony - http://online.wsj.com/article/SB123187546382078139.html?mod=googlenews_wsj

 

[meStevo]

December NPD numbers out Thursday btw, Sony expected to have sold 750k PS3s, but 360 expected to have outsold it at least 2:1 (1.3m), and the Wii expected to crack 3 million (as much as 3.5m).

 

[Hall]

Here's a bit of a breakdown.

Did you read my comment about those reports ? I noticed one minor thing missing from them too: assembly cost

 

[mwgiii]

Not a chance.

Maybe restructure/closing some of the development houses. Gaming machines have large upfront costs and long life cycles to get paid pack. The PS3 is getting closer to break even.

 

[Zookster]

Did you read my comment about those reports ? I noticed one minor thing missing from them too: assembly cost

Not to mention marketing and freight. Also, Sony doesn't get $399 for every PS3 they sell; the retailer gets their cut.

 

[ONUOsFan]

...forget hardware, think software.

How does that work, though? They're going to completely retool and start making Xbox games?

 

[yourbeliefs]

How does that work, though? They're going to completely retool and start making Xbox games?

I think a Wii version of "God of War" would be really cool, assuming they pulled it off correctly with the Wiimote gestures.

 

[JamesJ]

How does that work, though? They're going to completely retool and start making Xbox games?

what I meant was the first to go would be the game division, not the hardware division...thinking they would cut games like MLB and some of there other less popular games.