Sony saw its quarterly losses grow for the fourth fiscal
quarter (January 2007 to March 2007). Not surprisingly, the company cited that
its overall $563 million USD loss – the company’s biggest quarterly loss in
four years -- can be directly attributed to costs associated with the
PlayStation 3 console. The company’s Games division witnessed a $1.9 billion
"In the Game segment, there was a significant operating
loss as a result of the sale of PS3 at strategic price points lower than its
production cost during the introductory period," said the company.
The PS3 comes packed with plenty of technology including the
complex Cell processor, Blu-ray drive, integrated 60GB HDD, WiFi and Bluetooth.
In mid-November, iSuppli
estimated that Sony was losing $240 USD on each 60GB PS3 it sold and $300
USD on each 20GB PS3 that it sold. Sony was able to stem those losses somewhat
by dropping the
20GB PS3 from its product mix in North America.
Sony expects that it will continue to lose money on the PS3
for the current fiscal year. That being said, the company expects to ship 11
million PS3s for the current fiscal year -- up from 5.5 million units for the
previous fiscal year. "The PS3 business will really get off the ground
this fiscal year," said Sony Corporate Executive Officer Nobuyuki Oneda.
Sony isn't the only company seeing losses from its gaming
division. Microsoft's Entertainment and Devices Division (EDD) which
encompasses the Zune and Xbox 360 witnessed an operating loss of $315
million USD for its fiscal third quarter. Microsoft's Robbie Bach notes
that the Xbox 360
hardware itself may never end up being profitable for the company, but it
plans to make money on peripherals, royalties from game publishers and its Xbox
Live online service.