Sony Will Lose Money on Vita Hardware Sales

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Sony Will Lose Money on Vita Hardware Sales

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The platform holder hopes to start making a profit after three years.

While technology gets cheaper and cheaper every day, it's not free and no one needs telling that more than Sony. After years spent clawing its way back to profitably due to the vast sums of money it spent making the PS3, it's set to potentially repeat the process with the PS Vita.

The Wi-Fi only Vita will retail for the same price as the 3DS - $250 - despite having a lot more crammed under the hood than its dual-screened rival. PlayStation boss Kaz Hirai said the mobile gaming market was expanding rapidly thanks to tablets and smart phones, and that that Sony expected to start making a profit on the Vita hardware within three years. He said that Sony was hopeful that the Vita would outsell its predecessor, the PSP, which has shipped 70 million units.

Sony has had some funny ideas about what an appropriate price for handheld devices is in the past - the PSP Go and its "premium" price point instantly spring to mind - but this seems a much more sensible, not to mention successful, strategy. Having a more competitive price point will help get the device into peoples' hands and, hopefully, buying games, which is where Sony will actually make its money on the Vita.

The PS Vita is scheduled for release by the end of the year, although Sony's US boss Jack Tretton said that it might be delayed in some territories.

Source: Reuters via Andriasang

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Wait so the Wi-Fi one is better then the 3G? Also what's the difference between the two?

I want one of these so bad :P
I think I'll probably get one, but I might wait for a second generation, like they did with the PSP. Same with the 3DS - I'm waiting for the inevitable 3DS Lite.

I predicted this to my clan a few days ago. sony realised that making a profit off its hardware sales wasn't the way to go with the ps3, and it is better to stay competetive with ninty and microsoft even if that means initially losing money. nearly everyone is gonna buy uncharted with their PSV (yes I am calling it that) and if sony announce even more exciting launch titles, then they could earn back all their lost money on day one :)

Quiet Stranger:
Wait so the Wi-Fi one is better then the 3G? Also what's the difference between the two?

The $250 model doesn't have 3G, Wi-Fi only.
The 3G model ($300, I think?) has 3G and Wi-Fi, so you can pretty much access the internet anywhere with a signal.

I would have thought that Sony need all the money the can get their hands on since the hacking fiasco.

sony loosing money on a new console? never...
if i buy a new handheld, itll probably be this but i will have to play it in my mansion on mars.

Wow, and you would think these guys would actually learn from past mistakes. At times, when a company has large amounts of resources, they invest that resource poorly because they have so much of it (Look at Donald Trump). Releasing a handheld system when people are using smartphones more than ever is risky anyway, but to sell it without making a profit too, that's just ludicrous. You could make a substantial step up compared to the PSP and still sell it profitably. What's worse is, by the time they may become profitable, it'll be un underpowered peice of hardware again. If you look at the Xperia Play (the playstation phone), it is technically better than the PSP in ever single way, why not concentrate on that platform more?

I have no respect for these guys at all anymore. I haven't even gone to collect my free shit from the PSN outage, I'm completely over it.

You know, hardware might be expensive on the PC, but at least it's a self-sustaining platform and doesn't take risks that might blow up in the face and put an entire platform in jeopardy.

At any rate, I actually rather like the Vita (apart from the stupid name). Here's hoping it'll succeed and have a steady stream of WipeOut content.

wasnt selling at a loss common once upon a time?

It's nice to see a hint of the Sony sans hubris we used to know in the early days of the ps. This could be a sign of good things to come

Considering that they packed more advanced hardware into the shell than the current-gen smartphones, and those still retail at $600-$700 off-contract, selling at a loss is the only way to be remotely competitive. The real question is more how much of a loss are they taking.

When will Sony EVER not lose money on their device? It's like begging us to buy it so they would recoup the losses much earlier. Well, we will see.

tghm1801:
Same with the 3DS - I'm waiting for the inevitable 3DS Lite.

There won't be a 3DS Lite, according to Nintendo.

I'd like to think we could expect a 3DS+, though. With a better battery in it, and maybe better screens.

EDIT: Maybe a 3DS XL?

They wont make any money in the UK. its $410 for the 3G model here.

i hope this works out for sony, i may not like them but this seems promising.
btw why do people keep bringing up playing on your phone, doesn't this appeal more to people who are more involved in gaming than playing angry birds and bejeweled?

Baresark:
Wow, and you would think these guys would actually learn from past mistakes. At times, when a company has large amounts of resources, they invest that resource poorly because they have so much of it (Look at Donald Trump). Releasing a handheld system when people are using smartphones more than ever is risky anyway, but to sell it without making a profit too, that's just ludicrous. You could make a substantial step up compared to the PSP and still sell it profitably. What's worse is, by the time they may become profitable, it'll be un underpowered peice of hardware again. If you look at the Xperia Play (the playstation phone), it is technically better than the PSP in ever single way, why not concentrate on that platform more?

I have no respect for these guys at all anymore. I haven't even gone to collect my free shit from the PSN outage, I'm completely over it.

So, what you're saying is, you lost all respect for Sony because...

...because they're putting more advanced hardware into their devices than they can afford? They want to give the customers all this technology cheap? How dare they!

They don't get make profit from consoles. They recoup losses from games.

Specifically, games sold in Australia.

JediMB:

tghm1801:
Same with the 3DS - I'm waiting for the inevitable 3DS Lite.

There won't be a 3DS Lite, according to Nintendo.

I'd like to think we could expect a 3DS+, though. With a better battery in it, and maybe better screens.

EDIT: Maybe a 3DS XL?

And then a 3DS XL Lite with extra crap no one wants/needs but will buy it anyway.

Since Sony themselves have deemed Vita to be less investment heavy, i think they've learnt that lesson. So I think they'll be seeking to at the very least not make as bad a loss on the hardware per unit. Maybe even a small profit, but a quad core Cortex A9 won't be cheap. Looking at the pricing, it's definitely going to be competitive with the 3DS. Plus there's over 40 titles in development, so with a strong installed game base it's going to be an attractive platform, which i'm guessing is what Sony is gunning for.

SovietX:

JediMB:

tghm1801:
Same with the 3DS - I'm waiting for the inevitable 3DS Lite.

There won't be a 3DS Lite, according to Nintendo.

I'd like to think we could expect a 3DS+, though. With a better battery in it, and maybe better screens.

EDIT: Maybe a 3DS XL?

And then a 3DS XL Lite with extra crap no one wants/needs but will buy it anyway.

Probably upgraded E-Shop, Better Internet connection, More stuff for the camera, better graphics, updated and better 3D, Better Battery life and anything to do with Hardware.

I want a 3DS simpley because Gameboy/Gameboy colour games can be downloaded via the E-shop. Pokemon Yellow in 3D? Hell yeh!

OT: Wow, Sony are really braking their backs to give us better stuff...well they have earned my respect, good on you Sony.

ryo02:
wasnt selling at a loss common once upon a time?

I think Nintendo is the only one out of the Big Three who sells Hardware and makes a profit out of it.

teebeeohh:
i hope this works out for sony, i may not like them but this seems promising.
btw why do people keep bringing up playing on your phone, doesn't this appeal more to people who are more involved in gaming than playing angry birds and bejeweled?

Yeah, Smartphones and handheld gaming devices are two completely different things.

id rather have a dedicated device for games. Gaming on my phone is nice, but not something i would like to do longterm.

Leviano:
id rather have a dedicated device for games. Gaming on my phone is nice, but not something i would like to do longterm.

Vita isn't a phone, it doesn't even have phone capabilites.

I understand that they need to control the price to stay competitive, but should they really be pushing it THAT low? I'm sure they're losing money in light of the current hacking fiasco...

We should this new handheld console generation: Generation Y
Y as in, WHY?
Sony must be run be communists, cuz they sure like being in the RED

The price announcement came as a huge surprise for me, cos i expected it to be a whole lot more at launch. I appreciate what sony is doing. I just hope they actually know what they are doing.
They will probably find another way to make up for their losses - probably through the price of the games for the Vita.

So how are Sony the bad guys again?

If anything, Nintendo is even worse, making insane profit off all their products and STILL charging an arm and a leg for them.

I am just baffled by some of the comments here. Sony is not repeating the PS3 fiasco, and selling the Vita at launch at a low price, and you guys are not happy? It's not our job to worry about why Sony does whatever. As consumers, what matters to us is the end price point, and it's pretty good this time. "lost all respect for sony" what a joke.

Baresark:
Wow, and you would think these guys would actually learn from past mistakes. At times, when a company has large amounts of resources, they invest that resource poorly because they have so much of it (Look at Donald Trump). Releasing a handheld system when people are using smartphones more than ever is risky anyway, but to sell it without making a profit too, that's just ludicrous. You could make a substantial step up compared to the PSP and still sell it profitably. What's worse is, by the time they may become profitable, it'll be un underpowered peice of hardware again. If you look at the Xperia Play (the playstation phone), it is technically better than the PSP in ever single way, why not concentrate on that platform more?

I have no respect for these guys at all anymore. I haven't even gone to collect my free shit from the PSN outage, I'm completely over it.

How is Xperia Play better? It also does not have two sticks, it was not designed for real gaming, just Psone classics mostly. Smaller screen, and (duh) it's a phone! The battery life IF they had made it for intense gaming would be ridiculously short. You can't compare the Xperia Play and the Vita, they target different audiences.

ryo02:
wasnt selling at a loss common once upon a time?

almost all car makers do it since they can make money back off the warrenty sony is presumably intending to do that with the games retail

wow color me interested, with some of hte game that will be coming out for it and dual joysticks finally make it to the handheld? hell yeah! this is gonna be a fucking steal around christmas time, i am quite excited to get my hand on this puppy and get some games

(it's backwards compatible with psp games i'm hoping?)

Losing money in the hardware units is typical of the business model for game consoles; the losses are made up later in license fees for sales of games. This is the way it has been for decades, now. The problem of the PS3 is the size of the losses per unit. I don't know how the Vita compares, percentage-wise.

However, I will say that Sony is going to need to make further investment to ensure the quality of game development on the device, otherwise they will simply find themselves hemorrhaging money for no good reason. Ultimately, people do not buy hardware with features. What they buy is the enablement to play games they enjoy. Excess hardware or features that are beyond what is necessary to manifest that enablement only serve to dissuade people from purchase due to extra expense for unwanted capabilities or, in some cases, disablement due to the extra complexities associated with additional features and capabilities(basically, it's harder to integrate everything together in a smooth, user-friendly fashion). To mitigate this, Sony will need to ensure that the games available for the system are of such caliber to override these considerations and make the device sufficiently appealing to the market. Put another way, the market is saturated with hand-helds(counting smart-phones and tablets), and people only have so much money and time. Sony will need to create a compelling reason beyond just spiffy new hardware to ensure success. The games have to be there, and the focus needs to be primarily on gaming.

Don't worry they will make it up in volume.

Seriously though this is a lost cause. Even 3DS was really too late. Smart phones and tablets have gotten both cheap and accepted enough that there is no longer a place for a dedicated portable gaming platform.

My prediction is the non-phone vita will totally flop.

tghm1801:
I want one of these so bad :P
I think I'll probably get one, but I might wait for a second generation, like they did with the PSP. Same with the 3DS - I'm waiting for the inevitable 3DS Lite.

I don't see how a 3DS Lite is even possible. The DS Lite was a smaller version of the current DS and I can tell you right now I definitely do NOT want a smaller 3DS.

Also does Sony realize that Nintendo is making, what, maybe 100 dollars profit on each sale of a 3DS? Nintendo certainly won't need 3 years to make a profit.

Is sony trying to bankrupt themselves?

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