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Almost all video game consoles are sold at a loss -- sometimes a huge loss in the first few years. Making money on console hardware has never been the name of the game. Every game sold for a Playstation comes with a licensing fee. It's in Sony's best interest to sell as many games as possible, which often means selling consoles at a loss.

Sony and other hardware makers also sell a lot of accessories, which often have huge margins too. The online services they sell also have big margins.

Selling hardware at a loss is one reason that consoles have always punched much higher graphically relative to price.

If the PS5 comes out for $500, it probably cost Sony around $700 to make it, and this is with getting massive volume discounts (guaranteed CPU and GPU contracts over several years with huge volumes of orders coming in) that your PC can't get.

And then because consoles only have one CPU and GPU combo to program to, you can get a lot more out of the hardware than you can with a PC.

This is why when the PS5 and the new Xbox launch, it'll probably give you better fidelity than a much more expense gaming PC -- and it will only get better visual fidelity for years to come as developers learn to exploit the architecture better.

I guess that would explain why Sony got rid of the option to run Linux on the PS3. With businesses buying PS3s as cheap servers and not buying any games, that would definitely be a bad deal for Sony if they sold the PS3 at a loss.

Yes that makes a lot of sense. Sony does not want to incentivize people to buy their consoles and never buy anything that they actually make money off of.

> Selling hardware at a loss is one reason that consoles have always punched much higher graphically relative to price.

Here's a 2 year old video comparing a $550 PC (with RX480) to PS4 Pro: https://www.youtube.com/watch?v=HueyUmSHrdo

Also, PS4 Pro specs list its GPU perf at 4.2 Tflops, while a GTX 1080, worth $499 and predating PS4 Pro by half a year has 8.2 Tflops. It's in the ballpark of 3.8Tflops of GTX 1060, MSRP $249.

The PS4 Pro's CPU at 2.13 GHz is also not what one would call punching above your weight. There are cheap i3's more powerful than that.

A console's value is a very dubious proposition if you are in a country which is given a favorable regional pricing by Steam.

It was always the case that you can build a faster PC than a console at roughly the same price. The difference is the games are optimized for the console then usually poorly ported to PC so they aren't very comparable.

The inverse can also be true, I've been recently told by console players that Diablo 3 for instance simply omits rendering of crucial enemy attacks (e.g. Molten explosions), if there are too many enemies on the screen. And console versions have less enemies than the PC version to begin with.

A console's value is about much more than performance. Consoles are for people who want a streamlined experience. Desktop operating systems don't make comfortable couch gaming systems. With a console, you can control the entire system with a simple controller from across the room, and you never have to worry about what's under the hood.

It's the same reason people pay a premium for Apple products even when they're strictly less functional - they're nicer to use.

Steam has been making strides in this direction with its big screen mode, though I admit that I have never used it and cannot testify to its efficiency.

Apple products have quite a few things going for them other than the smooth UX, I remember being surprised that a lot of non-technical people thought that they could not get a virus if they used Macs instead of PCs.

Cross platform games that are based on high-level APIs are probably not going to showcase this well, but look at the work that Naughty Dog does and try to find a budget gaming PC that can compete with that. Big budget, cross platform games aren't that well optimized, but the really well optimized games can look really good on old console hardware.

Heck, look at what Nintendo has done with Breath of the Wild on the Switch hardware.

i dont think thats been the case for the last gen. i thought they made profit early. but i could be wrong.

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