Is the PS2 hurting PS3?

[kexodusc]

However, as far as installed base goes, Sony was heads and shoulders above MS in sales. It was MUCH easier for MS to kill the program because the base was so small. For Sony the base is HUGE, so why kill the golden goose? But that brings us back to the original question. At what point does continuing to support/develop for the PS2 cut into PS3 installation?
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The installed base only plays a small part in it. Early on it was more significant, but as time goes on the value of the PS2 compared to the PS3 potential shrinks. PS2 is years removed from it's peak too, it's not like it's a giant cash cow they just CAN'T get away from. You'll see games continue to come out for awhile I suspect, but this industry has proven repeatedly that consumers will adopt a new generation of machine. If the installed base was a deterring factor, Super Nintendo never would have taken over from Nintendo, etc. I think of the PS2 as a saving grace on Sony's CE bottom line rather than a negative factor on the PS3. You're right - Xbox wasn't a money maker for MS to begin with so they were quick to move on to their second effort.

The bar keeps going up and when Sony finally releases some must have games there'll be Sony brand fans champing at the bit to get there hands on a PS3.
Whether Sony makes much money of it will remain to be seen, but millions of those things will sell.

GB - how much profit has MS seen from the 360?

[Groundbeef]

GB - how much profit has MS seen from the 360?

Not, sure. I'll get Bill on the horn and ask. I'll post when I get an answer.

[GMichael]

Not, sure. I'll get Bill on the horn and ask. I'll post when I get an answer.

Well? What's taking so long?

[Groundbeef]

Bill was too "busy" to take my call. Arrogant bastard. The best # I can come up with is from Nov. 2006. At that time, MS had driven the cost of the console down 40% from launch, and was making approximatly $75.00 per console. I would assume since then costs have been driven down further.

Now, after the price drop, I think MS is still making money, but it's not easy to find on the net. They have to be better than Sony, but again, its pretty hard to say.

Back in January there was a report that the XBOX division had sales over $2.6 Billion, and a small loss of $296 million. Thats like 1 day interest on their on hand cash reserves!

The division should be in the black by the end of 2007 according to both analysts, and MS.

If you want links, here they are:

http://www.joystiq.com/2007/01/25/mi...0-revenues-up/

http://www.techspot.com/news/23612-m...-hardware.html

[Sir Terrence the Terrible]

Oh, yeah, Sir. Terrance-He's the biggest game player on the board )

Actually I am far behind you my cowmeat friend. You know how I feel about games, so kindly note the mistletoe located conviently at my coattails

There is no way in the world MS will be in the black by the end of the year taking hits like this.

http://www.engadget.com/2007/07/05/x...o-three-years/

This is not 2005, this was this year. A billion dollar hit hurts companies even the size of Microsoft. What is worse, they don't know what the problems are. That means they may have to set aside even more than this.

http://www.xbox.com/en-US/support/sy...arrantyfaq.htm

[Groundbeef]

Actually I am far behind you my cowmeat friend. You know how I feel about games, so kindly note the mistletoe located conviently at my coattails

You are too modest. 3 time world champion Quake player, Voted "Most Likely to Pwn U" in 2007, and I remeber you when Fran Tarkentin interviewed you after your world record breaking run with PacMan in 1987. What was it 37 hours on 1 quarter?

In fact, a song was written about you Sir Testicle, heres the link:

http://video.google.com/videoplay?do...95041&q=tripod

Listen to it again, its WELL worth it!

There is no way in the world MS will be in the black by the end of the year taking hits like this.

http://www.engadget.com/2007/07/05/x...o-three-years/

This is not 2005, this was this year. A billion dollar hit hurts companies even the size of Microsoft. What is worse, they don't know what the problems are. That means they may have to set aside even more than this.

http://www.xbox.com/en-US/support/sy...arrantyfaq.htm

I gotta be honest on this one. I am not sure how the Billion set-aside slipped my mind, but you are 100% correct. MS will probably not show any profit in games this year. Had the set-aside not been made, they would have been in the black this year.

As far as not knowing what the problems are, they are aware of the issue. Tech geeks have identified a lack of proper ventilation resulting in solder liquifying, and coming off the connections on the board. The newer consoles (refurb, and new in box) have a larger heat sink- as identified by tech/game sites tearing some open. Also, I don't understand some of the lingo, but a smaller chip is being used. Its like 65nm, versus 90nm, and it generates less heat, and is smaller, resulting in better air flow.

They won't have to set aside more, as return rates are way down, and continue to fall. Short of this board, its really not an issue in the gaming arena. I havn't seen a story about it in weeks.

[kexodusc]

I gotta be honest on this one. I am not sure how the Billion set-aside slipped my mind, but you are 100% correct. MS will probably not show any profit in games this year. Had the set-aside not been made, they would have been in the black this year.

Semantic, but I've heard conflicting reports that MS was going to drop a B-note hit on the 07 fiscal year statements - I'm guessing there could be some retroactive adjustments to previous quarters, and of course future quarters as a few million more get sent in. So if the full billion isn't charged to 2007, they could still be profitable sooner rather than later - mind you, they may just take the bath in 07 to make 08 look like pure gold. Come to think of it that's a pretty good strategy - worst case scenario, PS3 catches fire and takes the sales lead for 2008, MS fires back with it's strongest earnings report ever...

As far as not knowing what the problems are, they are aware of the issue. Tech geeks have identified a lack of proper ventilation resulting in solder liquifying, and coming off the connections on the board. The newer consoles (refurb, and new in box) have a larger heat sink- as identified by tech/game sites tearing some open. Also, I don't understand some of the lingo, but a smaller chip is being used. Its like 65nm, versus 90nm, and it generates less heat, and is smaller, resulting in better air flow.

Another reason why I wanted my console from the latest batch...

[Sir Terrence the Terrible]

Semantic, but I've heard conflicting reports that MS was going to drop a B-note hit on the 07 fiscal year statements - I'm guessing there could be some retroactive adjustments to previous quarters, and of course future quarters as a few million more get sent in. So if the full billion isn't charged to 2007, they could still be profitable sooner rather than later - mind you, they may just take the bath in 07 to make 08 look like pure gold. Come to think of it that's a pretty good strategy - worst case scenario, PS3 catches fire and takes the sales lead for 2008, MS fires back with it's strongest earnings report ever...


Another reason why I wanted my console from the latest batch...

From what I understand, the bil has to be taken in 2007, and they are prepared to set aside more to handle any future problems. While some think they have nailed down the problem, issues seems to be cropping up with even after the switch to 65 nano chip. While problems are certainly not at the level of 2005-06, they are so steady even this year that they have been forced to take this action to avoid any class action lawsuits that might have occured.

[kexodusc]

Bill was too "busy" to take my call. Arrogant bastard. The best # I can come up with is from Nov. 2006. At that time, MS had driven the cost of the console down 40% from launch, and was making approximatly $75.00 per console. I would assume since then costs have been driven down further.

Now, after the price drop, I think MS is still making money, but it's not easy to find on the net. They have to be better than Sony, but again, its pretty hard to say.

Back in January there was a report that the XBOX division had sales over $2.6 Billion, and a small loss of $296 million. Thats like 1 day interest on their on hand cash reserves!

The division should be in the black by the end of 2007 according to both analysts, and MS.

If you want links, here they are:

http://www.joystiq.com/2007/01/25/mi...0-revenues-up/

http://www.techspot.com/news/23612-m...-hardware.html

Yeah, most of the stuff I've seen suggest MS is expecting to make it's fist penny in the division in the last quarter of 2007 largely because of Halo 3. Some are think it might fall back to Q1 08 but whatever.

Scary to think that you can sell, what? 40 million consoles, millions of games, and still not see a penny of the division.
Just goes to show these guys can lose $5-$10 billion and carry along like it's all peaches and roses. I suspect most users could care less about profitability, but I do see a fair bit of "my console's parent company has a healthier balance sheet than yours" mud slinging from time to time. Funny part is, the worse it gets, the easier it seems to be sell this industry as a new opportunity when trying to raise capital.
Don't kid yourself about MS cash reserves - no question they've got a lot of money and can raise even more in a hurry, but just because they can doesn't mean they ever wouldl. Doesn't work that way.
MS execs get more pressure and death threats for failing to exceed earnings than most other company execs get for failing to meet them. It's not what you've done, it's what you've done for me lately, and if they think investment returns in that business line aren't as good as another opportunity they'll pull the plug. Doubtful to happen now that 360 is on the verge of profitability and this 7 year long trip is starting reap rewards.
Anyway - just read an article that basically states this is looking to be the first generation where all the major consoles make a ton of money. Which could be interesting to watch, if profitability is good, gaming prices, or console prices could drop considerably. Here's to hoping...