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Sony loses money on hardware, but the platform as a while is profitable

Sony unveiled the new PS3 Slim officially last week at Gamescom in Germany. The new console was officially announced after months of speculation swirling about not only the slimmer PS3, but a price cut as well. Thankfully, both the price cut and new PS3 console became reality.

Times Online sat down with Sony Computer Entertainment's Kazuo Hirai and had a talk with him about the PS3 and the success of Sony as a whole. Hirai said that the time was right for the slimmer PS3 because Sony wanted to pass the savings on to the customer since it had to put less hardware into the PS3 than it was when the console first launched. The pressure from game developers to cut the price of the console likely figured into the decision as well.

When asked if the price cut was an admission that the PS3 sales have been disappointing, Hirai said sales were slower than the PS2, but on track with what Sony saw with the original PlayStation. He also says Sony looks at things on a 10-year life cycle and with the third anniversary, now coming it's too early to say how well the trajectory for the PS3 is doing.

One of the more telling questions in the interview was whether Sony is still losing money on the PS3. Hirai said, "If you're just talking about the hardware alone, the quick answer is yes. That makes good headlines, but I don't actually know that that's the true nature of the business that we're all in, whether it's PlayStation, Xbox or the Wii. I think the better indicator is to look at the business as a whole platform, to ask are you profitable in terms of the hardware, software, and peripherals. And the answer t o that question is yes on a gross profit level since the last fiscal year."

Hirai said in the interview that the "magic wand" motion controller for the PS3 is set for release in the Spring of 2010. He also said that Sony is working hard to be sure that software supporting the controller is available when it launches as well.

Hirai also says that Sony will not be ditching physical media altogether as some expected with the announcement of the UMD-less PSP Go. He points out that in many countries and locations downloading a full PS3 game would take inexcusably long to do.

He said, "We are committed to the PSP 3000 and the UMD business. A lot of people like to speculate that we're getting out of that business, but nothing could be further from the truth. We're not going to deprive consumers in all those other countries."



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Better questions...
By tallcool1 on 8/25/2009 1:37:22 PM , Rating: 5
quote:
When asked if the price cut was an admission that the PS3 sales have been disappointing,
The same could be said for any console for any generation. So would the interviewer say the same about a XBOX360 price cut or when the PS2 had a price cut back in the day? The obvious answer is no. Its a one sided question with an agenda. They had to price cut to be competive, even if they offer more than the other console as far as hardware goes (ie blu-ray disk player, user removable hard drive, wireless included, HDMI from the start, etc.) Over time the cost of the PS3 also has come down as does with any technology and with the smaller form factor this allows them to reduce the price, even if they are still at a loss. Gimme a break with this question. Geeze.
Back in the 80's when CD players came out they where expensive and the price dropped over time, would you say. "are you dropping price because sells are dissapointing?". Stupid question.

quote:
He points out that in many countries and locations downloading a full PS3 game would take inexcusably long to do.
Which is correct as you cannot assume that everybody has access to high speed internet.

When you have access to somebody at this level, I would hope that the intervier would ask some better questions than that.




RE: Better questions...
By invidious on 8/25/2009 1:45:58 PM , Rating: 5
If there is no controversy the media does what they do best, make some up.


RE: Better questions...
By DotNetGuru on 8/25/2009 2:43:17 PM , Rating: 5
I agree. This is so absolutely not an issue, it seems like a JasonMick post just trying to get hits.


RE: Better questions...
By bighairycamel on 8/25/09, Rating: -1
RE: Better questions...
By StevoLincolnite on 8/25/2009 3:43:18 PM , Rating: 4
quote:
I agree. This is so absolutely not an issue, it seems like a JasonMick post just trying to get hits.


RE: Better questions...
By Icelight on 8/25/2009 3:49:01 PM , Rating: 5
Hehe, like this:

quote:
Hirai said, "If you're just talking about the hardware alone, the quick answer is yes. That makes good headlines , but I don't actually know that that's the true nature of the business that we're all in, whether it's PlayStation, Xbox or the Wii. I think the better indicator is to look at the business as a whole platform, to ask are you profitable in terms of the hardware, software, and peripherals. And the answer t o that question is yes on a gross profit level since the last fiscal year."


Hmm, I wonder what the headline is for this article.


RE: Better questions...
By gstrickler on 8/25/2009 4:04:55 PM , Rating: 2
Give him a 6.


RE: Better questions...
By SPOOFE on 8/25/2009 3:44:28 PM , Rating: 1
quote:
Its a one sided question with an agenda.

What agenda? PS3 sales are in last place. It's the most expensive of the three newest consoles. Those two facts mean one thing: Sony needs very, very high sales numbers in order to make money, and they don't have those sales numbers.

This is a console originally described as being "too cheap" for $600... by the people that made it. Your post doesn't take that into account at all.


"I want people to see my movies in the best formats possible. For [Paramount] to deny people who have Blu-ray sucks!" -- Movie Director Michael Bay

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