Record sales will not be enough for Sony’s PS4

PS4 consoles moving at a record pace.
PS4 consoles moving at a record pace.
Image: AP/Nam Y. Huh
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Sony announced this weekend that its new PlayStation 4 (PS4) console sold over 1 million units on the first day in the US and Canada.

The sales figure marks the first time that any video game console has sold so well, so quickly. The one-day figure for the PS4 launch easily beat the 2000 release of Playstation 2, which sold 980,000 units over 3 days in Japan. The sales record also relied upon pent-up demand and over 1 million pre-orders placed months ahead of the Nov. 15 release in North America.

Unfortunately, the record-breaking sales do not mean that all is well at the electronics giant.

Sony, along with the other major console manufacturers, including Microsoft, (with its $499 Xbox One, launching Nov. 22) and Nintendo, (with the foundering $299 Wii U) continue to face an uphill battle. For years video game console manufacturers have been pursuing a risky strategy: sell consoles at a loss, and hope to recoup profits on game licensing, software, and network fees.

It’s become increasingly difficult for console makers to attract the casual gamer with the growing popularity of alternative gaming platforms like smartphones, tablet computers, and laptops.

The PS4’s success is crucial for Sony, which has faced uneven earnings in recent years and dropped profit forecasts by 40% last month. Estimates are that the PS4, priced at $399, sells at a $60 loss per unit. The PS3 ($599 at launch) sold at a loss of over $300 per unit and resulted in total losses near $5 billion.

Industry forecasts indicate that through 2017, the PS4 is likely to outsell the Xbox One, 49 million units to 38 million.