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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 The0ne on 1/10/2008 12:17:51 AM , Rating: 2
You can't afford to lose on both ends. Usually when you're cutting the price of the system you're expecting to make some of it back or more from the software side. This is the case for PS3 or xbox. A company cannot survive if they keep losing money on the hardware and software side.

Having said the above, I'm not sure what Sony plans to do to be profitable this year. They really can't cut the prices down more. One option I do see is if they have the software support they did on the PS2 to drive everything, including the crappy ones. This time around though is much more difficult as Wii and Xbox are popular as well. There's only so many gamers out there of which specific regions are were not even consider in their plans. Wii has that covered :D

My freaking whole family loves this Wii! It's amazing to see people who had complained about gaming playing games AND having fun lmao.


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