Often, game companies do lose money on the console. But Sega is apparently making somewhere around $20 on each console sold. Retailers make almost no money on consoles. I work at a retailer, and my understanding is our cost is somewhere in the neighborhood of $180. So it probably costs Sega around $160-170 to manufacture a Dreamcast.
Ok, it may not be wanted, but I can't help but want to clear up some of the mystery of Amazon's inability to be profitable.
The reality is that Amazon is unprofitable mainly because they don't want to be profitable. For starters, their book business was profitable in the fourth quarter of last year. And it may also have been for the first couple quarters of this year, though I don't know for sure. So it is quite possible to be profitable just from selling books and Amazon has done that. It was their other sections (the new-at-that-time music and video sections) that caused them to lose money.
Second of all, Amazon has publicly stated that they have no intention of being profitable at this point. That, in fact, they consider it a mistake. May sound ridiculous, but Amazon's ultimate goal is to rule ecommerce. Every section of it. As it has been stated numerous times, they want to be the Wal Mart of the web--a multi-billion dollar ecommerce hub.
Which means expansion. Book to music to videos to electronics and toys. Then on to software (which will probably be next), then maybe flowers or jewelry or travel or cars or whatever the hell they think will sell on the site. Expansion takes money. Advertising--building brand awareness--takes money. And they plan to spend more money than they take in for at least another year or two.
Amazon loses money because they want to. Because that is the plan. Not because they are incapable of being profitable. And Amazon has said that to their investors many times.
When Bezos started Amazon, he was not thinking of selling books. He was simply think of selling--on the internet. He researched 20 product groups and settled on books because of the huge selection and other factors. It was a good product to sell on the web, as he has since proven. But he never intended to sell only books. Why do you think he called the company Amazon instead of something with "book" in the title, or relating to books? He wanted to dominate from the very beginning.
When Bezos decides Amazon should start being profitable, he will make it profitable. In the mean time, his plan is to dominate the world of ecommerce. And he will carry out that plan by eventually selling anything and everything.
You're quite right. Amazon is doing what it always planned to do--becoming THE place to buy things on the web. It has been Bezos' plan from the beginning, and he has never tried to pretend it wasn't his plan.
If you're looking for a KMart of the web, then Buy.com is as far as you need to go. But if you want great customer service, Amazon is a better choice. I will continue to shop at Amazon because they have, quite simply, given me the best customer service I have received from any store, online or offline. I appreciate that and I reward that with loyalty. Plus, their store kicks ass, to be blunt. I still find their book store to be better than real world stores when it comes to finding a good book you weren't looking for. And they always give good recommendation for music and videos as well.
And Jon, instead of saddling us with bitching about the good old days, why don't you just change your bookmark from www.amazon.com to www.amazon.com/books. Takes you straight to the books front page, where nary a Pokemon is to be found. And the same applies to their other stores! Yes, www.amazon.com/music and www.amazon.com/video take you to the music and video stores, respectively. It's not too complicated, really.
I never saw Amazon as just a bookstore. I saw it as a great shopping experience because it, honestly, always has been for me. So whenever I decide I can afford that Diamond Rio, I'll be heading straight to amazon.com/electronics. And next Christmas, when I need to pick up some presents for my nieces and nephews, guess where I'll be clicking to?
That's right. www.amazon.com/toys. Pokemon or no Pokemon.
Slashdot Mirror
Often, game companies do lose money on the console. But Sega is apparently making somewhere around $20 on each console sold. Retailers make almost no money on consoles. I work at a retailer, and my understanding is our cost is somewhere in the neighborhood of $180. So it probably costs Sega around $160-170 to manufacture a Dreamcast.
The reality is that Amazon is unprofitable mainly because they don't want to be profitable. For starters, their book business was profitable in the fourth quarter of last year. And it may also have been for the first couple quarters of this year, though I don't know for sure. So it is quite possible to be profitable just from selling books and Amazon has done that. It was their other sections (the new-at-that-time music and video sections) that caused them to lose money.
Second of all, Amazon has publicly stated that they have no intention of being profitable at this point. That, in fact, they consider it a mistake. May sound ridiculous, but Amazon's ultimate goal is to rule ecommerce. Every section of it. As it has been stated numerous times, they want to be the Wal Mart of the web--a multi-billion dollar ecommerce hub.
Which means expansion. Book to music to videos to electronics and toys. Then on to software (which will probably be next), then maybe flowers or jewelry or travel or cars or whatever the hell they think will sell on the site. Expansion takes money. Advertising--building brand awareness--takes money. And they plan to spend more money than they take in for at least another year or two.
Amazon loses money because they want to. Because that is the plan. Not because they are incapable of being profitable. And Amazon has said that to their investors many times.
When Bezos started Amazon, he was not thinking of selling books. He was simply think of selling--on the internet. He researched 20 product groups and settled on books because of the huge selection and other factors. It was a good product to sell on the web, as he has since proven. But he never intended to sell only books. Why do you think he called the company Amazon instead of something with "book" in the title, or relating to books? He wanted to dominate from the very beginning.
When Bezos decides Amazon should start being profitable, he will make it profitable. In the mean time, his plan is to dominate the world of ecommerce. And he will carry out that plan by eventually selling anything and everything.
Joel Caris
You're quite right. Amazon is doing what it always planned to do--becoming THE place to buy things on the web. It has been Bezos' plan from the beginning, and he has never tried to pretend it wasn't his plan.
If you're looking for a KMart of the web, then Buy.com is as far as you need to go. But if you want great customer service, Amazon is a better choice. I will continue to shop at Amazon because they have, quite simply, given me the best customer service I have received from any store, online or offline. I appreciate that and I reward that with loyalty. Plus, their store kicks ass, to be blunt. I still find their book store to be better than real world stores when it comes to finding a good book you weren't looking for. And they always give good recommendation for music and videos as well.
And Jon, instead of saddling us with bitching about the good old days, why don't you just change your bookmark from www.amazon.com to www.amazon.com/books. Takes you straight to the books front page, where nary a Pokemon is to be found. And the same applies to their other stores! Yes, www.amazon.com/music and www.amazon.com/video take you to the music and video stores, respectively. It's not too complicated, really.
I never saw Amazon as just a bookstore. I saw it as a great shopping experience because it, honestly, always has been for me. So whenever I decide I can afford that Diamond Rio, I'll be heading straight to amazon.com/electronics. And next Christmas, when I need to pick up some presents for my nieces and nephews, guess where I'll be clicking to?
That's right. www.amazon.com/toys. Pokemon or no Pokemon.
Joel Caris