Why Is Sony OK With Taking a Loss on PS4′s Launch?

PlayStation 4 Hardware

It’s long been known that Sony (NYSE:SNE) expects to take a loss on hardware when the PlayStation 4 is initially released. But for the electronics company that saw their stranglehold on the video game console market shrink in the previous generation, a loss of revenue through hardware is being seen as a necessary step to take the lead in the next generation of consoles where early users can mean everything.

Sony Japan executive Masayasu Ito told videogame publication Eurogamer on Friday that while Sony will operate at a loss on hardware alone, the company will recoup most, if not all, costs when the average consumer purchases at least one game and a PlayStation Plus subscription along with it. As for the specifics of Sony’s operating loss on hardware, Eurogamer cited reportedly “well-placed sources” that said Sony expects to take an approximate $60 loss on each $399 PayStation unit at launch.

The average purchase of at least one PS4 game and PlayStation Plus would immediately add at least $60 to initial sales for Sony and Ito also explained that, even without the purchase of games or Playstation Plus, PlayStation 4 would actually turn a profit sooner for the company than the PlayStation 3 did.