[tinybear1]

Microsoft testified under oath in court that they lost money on every Xbox sold prior to the current generation.

Sega lost money on every console prior to exiting the market.

Nintendo sold various consoles at a loss (Wii U).

The PlayStation 1 through 4 sold either at a loss or break even.

[bryanlarsen]

You're listing the losers in the market, the ones that had to drop prices to make sales. The real volume sellers weren't generally sold at a loss. Most Nintendo consoles were never sold at a loss. Sony often sold at a loss in the first year or so, but their redesigns made them profitable, and the vast majority of sales happened after redesigns. Moore's law was responsible for a large portion of the profits from hardware sales.

[johnnyanmac]

Okay. That doesn't conflict with their point. "No one had to sell at a loss... Except every non-market leader" only proves their point.

>, but their redesigns made them profitable

No one says consoles always sell at a loss. They are sold over 6-8 years and price drops are pretty conservative (until last gen where they ceased to be). Every conse eventually becomes profitable, but not in the years where they sell the most.

[bryanlarsen]

> but not in the years where they sell the most.

Nope. Take 1 example, the PS3. It lost money in 2007 & 2008, but became profitable in 2009. They sold 16 million PS3's in 2007 and 2008 out of a total 87 million. So approximately 20% of PS3's were sold at a loss.

And the PS3 is perhaps the console that was sold at the biggest loss at the beginning due to the horrendously expensive Cell chip.

It's kind of moot, anyways. The discussion is about the consoles of 2026 competing against Steam Machine. The PS5, Xbox Series X|S and Switch 2 are all currently being sold for positive margin.

[johnnyanmac]

The ps3 was certainly a unique case, because despite selling at a loss it still wasn't a competitive price. The infamous "599 USD" now translates to 950 dollars today, so that really shows you how utterly expensive it was (when the PS5 pro just needed to price hike to $800).so it coming down in price for consumers and manufacturers helped it immensely.

But I do believe that was a unique case. Consoles don't typically "come back" later in life. The vita later on didn't. The Wii U and Xbox one didn't. The dreamcast sure didn't. Sony's big turnaround should be praised, but not accepted as a norm of business.

[bryanlarsen]

Every console that sold over a hundred million consoles had over a decade of solid sales.

Those seven consoles significantly outnumber the 50 consoles that didn't.

Even the PS3 didn't sell 100 million units. Relative flops like the xbox one or the wii U are insignificant fractions of console sales.

[johnnyanmac]

So, 4 consoles?

Yes, I'm aware on how consoles are monetized. They take a loss in the first few years and make up for that with software sales, which they take a 30% cut on.

I'm not dispelling if the model isn't profitable, I'm simply stating that the hardware is historically sold at razor thin margins early on, if not outright a loss (until this generation)

[JackSlateur]

It means the cost of hardware+dev was higher than the cost of sold consoles

It does not mean that a device was sold cheaper than its own hardware

Basically, you have r&d but that is out of the topic