Shaky ground: Sony lost US$ 3.32 billion due to PS3 cost, pricing imbalance |
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In its recent fiscal 2008 annual report, Sony revealed to the public that the company lost more than US$ 3.32 billion over the past two years as a result of pricing the PlayStation 3 below its production cost.The report outlined the risks investors would be taking, noting that even if the PlayStation 3 sells well, "the large-scale investment required during the development and introductory period of a new gaming platform may not be fully recovered."
Sony mentioned that it spent considerable resources into research and development of the PlayStation 3, noting that the losses incurred might not be recouped if the platform they're supporting doesn't "achieve such favorable market penetration... resulting in a significant negative impact on Sony's profitability."
Even should the PS3 sell better than expected, Sony adds, it would take some time to make up for the costs it took to produce the console. Luckily, more high-profile games are coming out now that should help make up for the losses incurred. Let's just hope these new games become console pushers so that Sony can keep coming up with new tech for gamers to play with.
Thanks to mister common sense for the tip.
Via Kotaku
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Comments
I thought it was common knowledge that Sony under priced the PS3, to help establish Blue-Ray technology in homes! Sony has more than 1 department! The money generated from the success of Blue-Ray will more than cover the loss incurred of the PS3. Plus, Sony are still steadily selling PS3s on top of that. I'm sure the 'pricing people' at Sony know what they're doing... they've been in business for quite a while now lol!
I found this article on IGN. Oh well.
"I thought it was common knowledge" It is. So this isn't really news. It's more of a confirmation after the fact. As you mentioned with Blu-Ray this loss was a gamble on Sony's part and it's supposed to net them more in the long run. Remember, Sony was in the crapper not too long ago. They have more then one department but those departments are controlled by different people. Those different groups could very well start pulling individual plugs. However, Sony is right on track. Again, like you said, Sony knows what they are doing :)
was it not couple of weeks ago qj said sony made profit ? or have i getting the wrong end of the story
ouch that hurts.
This' definitely a shock to SONY PS fans. Jumping the gun like that. It will definitely cost SONY and arm and a leg (so to speak).
Here's an idea. Make the current model backwards compatible. I know I for one would buy one today.
how is this a surprise, its a known fact that they sold the ps3 at a loss. and how did they jump the gun?
multiplied by how much? equals this article.
Sony as a whole company is profitable. But they still lost billions on this one product. Think of it this way. You go to work and you bring home $1000. Someone smacks you on the back of your head while walking home and steals $200. You LOST $200. But you're still ahead $800.
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