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Sony hopes to stop losing money on PlayStation 3 next fiscal year

The PlayStation 3 is an expensive piece of hardware for both consumers and SCEI. The entry price of the PlayStation 3 fell significantly in 2007 – and while component costs also went down, Sony was still selling hardware at below cost.

At the time of the PlayStation 3 launch in mid-November 2006, iSuppli estimated that Sony was losing $240 on each 60GB PS3 and $300 on each 20GB PS3 that it sold.

Sony’s gaming division chief Kazuo Hirai spoke at a news conference at CES revealing hopes of turning a profit in the next fiscal year.

"We want to get to the positive side of the equation as quickly as possible," said Hirai in a Reuters report. "The next fiscal year starts in April and if we can try to achieve that in the next fiscal year that would be a great thing. We are going through the budgets right now. That (profitability) is not a definite commitment, but that is what I would like to try to shoot for."

The introduction of the 40GB PlayStation 3 SKU brought the entry price of the system down to $399 – a price that managed to entice buyers to finally put down their money. Sony said that it sold 1.2 million PlayStation 3 consoles throughout the holiday season, representing two-thirds what it sold in the rest of the year.

Given Hirai’s sentiments that the company is looking to "get to the positive side of the equation," gamers will likely see the $399 (for the 40GB) and $499 (for the 80GB) price points sustain throughout the foreseeable future.

Hirai’s comments also inadvertently reveal Sony’s failure to meet hopes of turning a profit by the end of this fiscal year, which ends March 2008. Sony said in July 2007 that had hoped to eliminate the negative margin during this period.

“For the negative margin to go away, the big trigger would be the cost-down in the Cell and RSX semiconductors. They are the key, and also optical pick-up is another factor, significantly,” Sony executive VP Nobuyuki Oneda said in 2007.

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RE: too ambitious?
By omnicronx on 1/8/2008 12:45:56 PM , Rating: -1
Or not? Sony will allow the 360 to have a BD player when they pry it from their cold dead hands! I do not foresee Sony allowing Microsoft to acquire the BD licensing that will be required.

I do foresee Microsoft beefing up their online movie library though.
If they can't get studio support through HD, do through their online store. That seems to be the Microsoft attitude.

RE: too ambitious?
By tallcool1 on 1/8/2008 1:16:50 PM , Rating: 3
Sony themselves would not stop Microsoft from acquiring a BD license! There are 9 companies (Matsushita, Pioneer, Philips, Thomson, LG Electronics, Hitachi, Sharp, Samsung, and Sony) that form the Blu-Ray Disc Association that develops and license Blu-ray Disc technology.

In fact, I would be willing to think that they would allow it. All 9 companies would stand to profit from it.

RE: too ambitious?
By omnicronx on 1/8/08, Rating: 0
RE: too ambitious?
By ElrondElvish on 1/9/2008 5:04:54 PM , Rating: 2
Thats a silly argument... Sony could *never* deny Microsoft a license to BD, as there are hundreds of millions of Windows PC's in the world (for business and pleasure). To do so would be suicide... its hard enough when Microsoft 'accidentally' breaks support for any tech it doesn't explicitly control on Windows, let along giving them any excuse to pull support outright.

RE: too ambitious?
By BrownJohn on 1/8/2008 1:17:43 PM , Rating: 3
That is what Microsoft wanted all along. They really don't care much about the blu-ray/hd-dvd war. They want people to purchase movies on Live, not through disc based medium where there are a lot more licensing fees. If Microsoft really cared about the war, they could have swayed many of the movie studios with sacks of cash.

"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer

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