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>> Has there ever been a console where, over the life of the console, the hardware was sold for a loss? > All of them. Are you serious? The Wii has sold more

>> Has there ever been a console where, over the life of the console, the hardware was sold for a loss? > All of them. Are you serious? The Wii has sold more than 100 million units over the past ten years and you think it's been a net loss for Nintendo? PS5-to-PC comparisons are hard to do in a meaningful way. It's like saying a Toyota Camry is sold at a loss because if you build one part-by-part it's going to cost $100,000+ rather than the $30k a dealer sells them for. If you take those PC specs and contact a manufacturer with a plan to order 20 million units, they are going to come in at quite a bit under $1600.

dijit 4y ago
I mean, it's conventional wisdom that Consoles are the _poster child_ for what "Loss Leader" means. https://www.makeuseof.com/games-consoles-sold-at-loss/ https://www.makeuseof.com/games-consoles-sold-at-loss/
- criddell 4y ago
  The first run may very well be sold at a loss, but almost every console has eventually turned a profit. I say almost because the XBox 360 may have been unprofitable over it's entire manufacturing run due to extraordinary warranty costs (red ring of death). I've read that it may have cost Microsoft more than a billion dollars, but I don't know if that's true or if that was enough to net Microsoft a loss over the 11 years it was sold.
- musicale 4y ago
  Conventional wisdom is not universally accurate in this case.
threeseed 4y ago
Sony in particular does this. For the first X years of its life, Playstation is sold as a loss. They generate revenue through game sales and then a decade later as hardware components become cheaper and scale increases they start to make money on the consoles as well. If they can't generate revenue through game sales the entire console model would be upended and hardware prices would rapidly increase. No company can take the risk to lose billions without a guarantee of future revenue.
- criddell 4y ago
  > No company can take the risk to lose billions without a guarantee of future revenue. Apparently the Nintendo Switch was never sold at a loss. Does it really matter though? They shouldn't be allowed to abuse consumers for the sake of their business model. If it were true that they were selling consoles for an expected loss, that would act as a barrier to new competitors entering the market. Should companies like John Deere be able to prevent third-parties from doing maintenance on farm equipment because John Deere's business model relies on that revenue stream?

dijit 4y ago

I mean, it's conventional wisdom that Consoles are the _poster child_ for what "Loss Leader" means. https://www.makeuseof.com/games-consoles-sold-at-loss/ https://www.makeuseof.com/games-consoles-sold-at-loss/

criddell 4y ago
The first run may very well be sold at a loss, but almost every console has eventually turned a profit. I say almost because the XBox 360 may have been unprofitable over it's entire manufacturing run due to extraordinary warranty costs (red ring of death). I've read that it may have cost Microsoft more than a billion dollars, but I don't know if that's true or if that was enough to net Microsoft a loss over the 11 years it was sold.
musicale 4y ago
Conventional wisdom is not universally accurate in this case.

threeseed 4y ago

Sony in particular does this. For the first X years of its life, Playstation is sold as a loss. They generate revenue through game sales and then a decade later as hardware components become cheaper and scale increases they start to make money on the consoles as well. If they can't generate revenue through game sales the entire console model would be upended and hardware prices would rapidly increase. No company can take the risk to lose billions without a guarantee of future revenue.

criddell 4y ago
> No company can take the risk to lose billions without a guarantee of future revenue. Apparently the Nintendo Switch was never sold at a loss. Does it really matter though? They shouldn't be allowed to abuse consumers for the sake of their business model. If it were true that they were selling consoles for an expected loss, that would act as a barrier to new competitors entering the market. Should companies like John Deere be able to prevent third-parties from doing maintenance on farm equipment because John Deere's business model relies on that revenue stream?