And yeah I must be naive... But really I don't think they were lying. Just look at the machine. You can't deny it was built to last (...at least in principle). I don't see a deliberately cheap thing that clearly wasn't intended to last those 10 years.
Go back and listen to what the president said again. He said, "the PlayStation 3 is not only going to be relevent in 5 years time, but it's going to be a relevent platform in ten years time. So I think the investment consumers make on day 1 with the PlayStation 3 is an investment they can enjoy for many many, years to come."
First he's talking about the platform. When he got specifc to Day 1 adopters he litteraly say "many, many, years to come." That doesn't mean it'll last 10 years. You might even say he meant it would last as "many" years as he said "many" in that sentence. 2 years!
There was a telling point in that report when one of the hosts paraphrased SONY official response to their questions:
She said, 'Sony stressed PS3s
don't have an inherit defect...and while they're disappointed that a
small number of their 2.5 million customers
appear to have experienced problems, after the warranty has expired, they say it's
common business practice to charge for repairs after one year and that
they don't profit from the cost of that.'
That's the statement you get when they don't want to take an official position (for liability reasons). I've heard enough guarded language to know a non-answer when I hear it.
First red flag: They claimed 'PS3s don't have a defect,' but didn't specify the model of PS3 they were referring to. "PS3" is intentionally open to interpretation. Launch models? Slim models? Legally speaking it's non-committal. If they were sure there really wasn't a defect, they'd have said, 'no model of PS3 past or present has any defect that we have identified at this time.' That would have reassured customers, because it's clearly true or false - not open interpretation and might be considered an official position (legally speaking).
The second red flag: Why point out how it's
'common business practice to charge for repairs after one year and that
they don't profit from the cost of that'? They're clearly defending from multiple avenues of attack, indicating premeditation. If you know you're guilty, you'll have your defence ready. That's how that that statement reads to me. Normalizing is the most common defense for shady practices. "Everyone does it, so that makes it okay." If it were standard and okay, then why do you feel the need to tell us how normal it is? The fact they felt it necessary to point out they don't profit from repairs is the giveaway.
They're trying to imply that they loose money, when you pay them to repair your console! They were again careful to use the word profit. Technically that's true, as cost of repair + BOM/MNF the launch PS3 was a Net loss. But that's increadbly misleading! Those are not the only revenue sources. Sales are only one revenue source, repair is another. The revenue from those 2 helps make the entire venture profitable even if alone they are not enough. But they're not alone! Licensing BluRays and Video Games, and taking commisions on PSN saled for their backlibrary of digital titles is where SONY made up the difference...BIG TIME!
SONYs revenue sources are many. Their expenditures are many. They can point to any one revenue source and say they don't profit from it, because it's the sum total of revenue sources where their profits are realized. Profits result from reducing overhead costs and generating revenue. Any revenue source helps, be it sales and supports. And anything they can do to reduce costs while
appearing to deliver SONY quality helps too.
Think of it this way:
- The prevailing incentive for expenditures is reducing overhead
- The prevailing incentive for revenue streams is maximizing profits.
If you push either one too hard, it hurts you reputation, reliability of the product, will drive your customers to competitors, etc. So you have to balance them both. That's where priorities come in.