Kutaragi: PlayStation 3 is "too cheap"
by James Ransom-Wiley 
{ May 17th 2006 at 2:25PM }
In a disturbing twist, Ken Kutaragi has gone on record stating that the PlayStation 3's $600 price tag is "too cheap." The SCE president has again compared the forthcoming console to a fine dining experience. His argument is that no one calls into question the price differential between some slop at the cafeteria and a meal at an upscale restaurant. From his (deep pockets) point of view, "If you can have an amazing experience, we believe price is not a problem."Does Sony's braggadocio excite anyone? Because it's turning us off.
After a paltry E3 showing - from a games perspective - it's hard to see the PS3 as anything more than a Trojan horse for sneaking (relatively) cheap Blu-ray devices into consumers' homes. The PlayStation brand is being pimped, and gamers are paying for it, literally. It's ridiculous for Kutaragi to suggest that his company is doing us a favor by launching the PS3 for $600. It's also disrespectful. Who else gets the feeling that Sony is looking down on us?
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Reader Comments (Page 1 of 5)
sine909 @ May 17th 2006 2:31PM
But the PS3 has historic japanese crab battles. You'll never find that on an Xbox 360. ]:
Ryan @ May 17th 2006 2:32PM
Spare me.
Can't wait for the Wii!!!
Kamalot @ May 17th 2006 2:33PM
All around, the flood waters are rising. Sony no longer is the dominant name in portable music, televisions or stereo equipment. Their namesake is sinking in a torrential sea of small, nimble companies. What is Sony to do?
All eyes fall on the Playstation, the only division of Sony to be profitable in quite some time. Once the laughingstock of the company, the unlikely bastard child of all things Sony; the Playstation name is now the company?s life preserver, and all divisions want to hold on for dear life.
Sony has created the Playstation 3 (PS3), not as a game machine, but as a vessel to float the company into new lands. They are burdening the system with a new movie format (BluRay) unheard of levels of digital rights management for music and video, Memory Sticks and more.
The results are already starting to show. A year ago, Sony promised to launch the PS3 in Spring 2006. Instead, they waited till Spring 2006 to announce that they won?t be launching the system until November 2006, in Japan, with other regions perhaps as soon as Spring 2007. Why? Digital Rights Management issues with the upcoming BluRay format.
The other divisions of Sony are dragging the PS3 down. The Playstation Portable (PSP) suffers from the same illness; too many hands in the basket. The PSP was designed around a slow-loading UMD format for distribution of movies which makes the machine less than ideal for game playing. Compared to ROM cartridges, UMDs are too slow loading and consume too much battery time. They make the machine more fragile and introduce problems with additional moving parts. In short, they are a sacrifice to the movie industry arm of Sony; giving up on the optimal game experience for the opportunity to sell you movies you probably already own on DVD.
Sony hopes that the PS3 will carry their formats of movie and music distribution will become the de-facto standard by attaching them to the PS3. 100 million PS2s have been sold in the last 6 years. One would think that using the Playstation?s success to launch a new standard format may be a good plan. The problem isn?t in the plan, it is in the execution. Delays and compromises will push the PS3 back while consumers looking for a game system will pick up another available option, such as an Xbox 360 or Nintendo Revolution; systems designed to play games first and foremost. Consumers looking for some of the other features the PS3 is to include, such as High Definition movie playback, will pick up more readily available and cheaper options, such as HD-DVD.
The delays brought about by making compromises to the core functions of the system will put a great strain on Sony. Currently, their ark is full of holes and loaded with baggage. The flood waters rise. How many gamers will wait until this time next year in order to pick up a PS3 when Xbox 360 games are available today and are getting excellent review scores? How many will pass up the Wii this holiday season when it is affordable, fun and available? How high will the waters rise before Sony can launch the ark?
http://kamalot.blogspot.com/2006/03/sonys-ps3-ark.html
From 3/14/2006
Chris @ May 17th 2006 2:33PM
I don't really see why they even call it the PS3 when its not really offering anything new in game persepctive, before you know it there will be just the same old games with nice shiny graphics, it should just be called the PS2 special rip off edition
Uglypimp @ May 17th 2006 2:33PM
It's the only tactic Sony can use. It's classic barrage marketing where you consistantly hammer consumers with a message. Hopefully, some will buy it.
I feel torn. I'd love to have a PS3 when it comes out but I can't part with 600 dollars (I would only consider the premium version for purchase). Possibly when Blu-Ray actually has proven itself as a 'here to stay' format it would be worth more to me, but as it is, it's just too expensive for things that haven't proved themselves useful.
I think if Sony hadn't developed Blu-Ray (or the HD format wars weren't going on) the PS3 would be a tour-de-force and probably be untested again in the console wars. It's amazing how badly this has all unfolded, and only the people wanting to play games that are PS3 exclusive are going to suffer. Including me.
alienhead_69 @ May 17th 2006 2:33PM
For that price, I better get one the size of the one in the picture.
jay @ May 17th 2006 2:33PM
I think it was on here a few months ago, someone said the only place Sony can go is down. And look, they've treated consumers like crap over the past week or so.
The Sony scenario is just laughable now.
Excuse me whilst I go purchase a 360.
Gonzo @ May 17th 2006 2:34PM
Turning me off? Yea but I'm starting to get used to it.
What I'm dreading (and the reason I'm not getting a ps3 at launch, except to maybe put on ebay) is the months following launch where something simple will snap in 80% of the machines and sony will grind another $200 out of everybody.
David @ May 17th 2006 2:35PM
I'm sure this is gonna garner a lot of love for Sony...
But in all seriousness it is cheap for what it can _Potentially_ do, don't yell at me thats simply the truth, for all the crap they plan to shove into this thing it is definately an investment for the future for a lot of people.
Then again! People don't go to upscale restaurants every night of the week or else we'd all go broke.
Equiz @ May 17th 2006 2:37PM
Corporate arrogance: the same sin that threw Nintendo of it throne and almost killed Sega.
Prof-KOS @ May 17th 2006 2:38PM
That's a disturbing thought....too cheap. Could that be a setup for a price raise in case they have more problems with the Blu-Ray? I can see a delay to 2007 and a $50 price jump before it hits shelves. They'll blame oil prices or something, but I can see that happening when the shareholders see what the loss per system is going to be.
David @ May 17th 2006 2:38PM
@ no. 3
"All eyes fall on the Playstation, the only division of Sony to be profitable in quite some time."
Uh actually Sony still has the worlds best selling LCD TV, the Bravia Line.
Ryan @ May 17th 2006 2:39PM
LOL @ the GAF joke, #1.
ZildjianKX @ May 17th 2006 2:39PM
Uglypimp, well said. I agree with every word of your post.
If Sony wasn't trying to pimp blue-ray, released PS3 last December with a DVD-ROM and stopped trying to say Blue-ray will make games better (it won't), the PS3 would have dominated this whole generation (if it launched at $399).
Now as gamers we have to pay $200 more for a Blue-ray player that may not become the dominant format. Sure, it's a bargain for a Blue-ray player, but I don't want a Blue-ray player until I know the format will stay around. I almost think that all Blue-ray players are over $1000 just so the PS3 seems like a "bargain."
Another issue I have is the PS2 sucked as a DVD player, which doesn't say much for how the PS3 will play movies...
diddydiddydid @ May 17th 2006 2:40PM
somebody please put something inedible in his mouth!
existonfile @ May 17th 2006 2:43PM
Hmmm over priced product that fails to meet expectations and is only there to push a proprietary format on consumers... Sounds like business as usual over at Sony, I don't know why anyone is complaining they've been employing this tactic for decades! Should've known things were heading downhill with the PSP and the whole UMD fiasco. Sorry but Next Gen is making me sick, I'm waiting for my NEW GEN, Wiiiiiiii!!!
MosquitoControl @ May 17th 2006 2:43PM
I'm bitterly annoyed at Sony, and people constantly defending Sony.
Your trojan horse analogy is entirely correct. Sony is forcing its fans to vote in the bluray-HDDVD battle. Vote with a C-note.
I don't want to pay $100 for a drive I have no need for. Games still fit on DVDs. I don't mind swapping DVDs, seeing as how it's very rare. And, if I end up wanting BluRay, I'll buy a dedicated, higher quality player for $200 when content is actually there.
Sony has used its fans as pawns. It bothers me. A lot. I don't want BluRay. They're forcing me to pay for it.
So... no PS3 for me. Not for a long while. And I don't see any games making me change my mind.
CUBS-BEARS-BULLS-RULE @ May 17th 2006 2:44PM
This is how i see it the ps3 and xbox 360 real close in sales in US and Wii in a close third(cause its a fun system. I don't really know about europe and the other countries that 360 is releasing there system in i think they r like czec rebublic africa brazil and other. In japan nintendo wii will rule there cuz look at the ds lite there sold out(the lines were huge on launch date) and then ps3 just cause of how good the ps2 did goodthere(they won't like it cause of its size just like they didn't like they psx cause it was big and to expenpensive) and the 360 a pretty close third place once they relize the price of the ps3.
Michael @ May 17th 2006 2:44PM
Is this guy on "crack" or what??? Let me ask all of you Sony fanboys out there a simple question (and be honest):
Isn't $600 a bit expensive??? When you figure that it'll probably only come with 1 controller, so you'll have to buy another controller (probably $50). Then, you'll want to buy a couple of games with it (probably $60 each). Then, there's sales tax. When you add it all up you're probably looking to spend close to $1000. And the funny thing is that the PS3 was meant to be played on an HDTV and about 90% of people out there don't even own an HDTV (at least not yet). You're actually spending more for your videogame entertainment than you are for the TV that you're viewing this on. The good thing is that the prices have come down on alot of HDTVs. Fortunately, I own an HDTV and I also happen to own an Xbox 360 (for which I'm happy with). But, the vast majority or people out there who are looking to buy the PS3 will probably be hooking it up to some old analog 27" TV.
And getting back to the total cost for the PS3 and accessories, after spending all that money, are you people still able to pay your bills?? Your rent??? Your mortgage??? Hey, I work hard for my money (like most people). And the average family income simply can't afford to spend that kind of money.
The PS3 might be considered a "value" at $600. But, Sony needs to do some more market research and realize that $600 is a bit steep for most (not all, but most) hard working people out there.
Just my opinion
boots (former bd (former b)) @ May 17th 2006 2:47PM
How coincidental! I thought I had seen that image before. Sort of:
http://www.joystiq.com/2006/05/12/sonys-ps3-is-still-600/
Joystiq is bashing PS3 like crazy these days.
Vik @ May 17th 2006 2:48PM
Well there's always a niche for the luxurists in the gaming world, and they'll be satisfied I'm sure with an entertainment console with all the makings of a super computer. The problem is, to effectively recover the PS3 should have been marketed to a greater population at a cheaper price.
I think in terms of pricing and strategy, Sony has made a few mistakes:
1. They've introduced a two-tiered package to consumers. This, as discussed, is an impetus for confusion - the consumer rightfully asks "Why are their two different types?". This oft-asked question will probably be supplemented with "What makes the two packages different?". Herein lies another mistake. Sony as with Microsoft, have endorsed the more expensive package by creating a feature set disparity between two versions of the same console.
If a two-tiered console into market is stringently followed, why couldn't Sony opt to create a Blu-ray version and a non-Blu-ray version of their PS3 console? This seems far more marketable and Sony caters to two markets at the same time: The entertainment market, and the lucrative gaming market. (Sure I can't get my game in 1080p then, but my TV doesn't output bullocks resolutions anyway).
2. In a word - pricing. Sony has targetted a richer demographic with it's reflectively high price tag for its console. Gamers are reminded they are not buying a gaming console, but an entertainment computer. This puts off a lot of gamers, rightfully so when a console such as the XBOX 360 does just as well gaming-wize for a slightly more affordable price. But to look at it in more detail, it seems reasonable that a cheaper price tag even if by $100 would gain the exceptance of a larger demographic of gamers. The target market would increase (however slightly) but would probably be a better optimization for Sony in the long run.
I'm not sure why Sony is doing what it is doing?
A Rolls Royce is not for everyone; they stay lucrative by maintaining a small production of its vehicles for select customers. .
Bang&Olfsen Speaker systems are crazy expensive, priced at an incredible premium over the sum of their parts. But a select crowd buys them and the company profits by catering to these niche.
Why is Sony attempting to market their console to the masses (25 million consoles in x years) when their pricing is bottlenecking them to a select crowd of Sony zealots and the rich?
Vik
turken @ May 17th 2006 2:48PM
I really like the restaraunt analogy...
Yes, there is merit in eating at a "Sony" 4 or 5 star restaraunt when the situation calls for it. They are certainly prestegious and beautiful in presentation, and they have some very unique flavors to offer. But, to be honest, I have neither the stomach nor the wallet to sustain such a habit on a daily basis. Simply put, with both the Sony PS3 and restaraunt, you'll literally be paying out the a**. Well, at least I will since a lot of that fancy food doesn't agree with my digestive tract.
Extending the analogy, Microsoft is now in the position of "Sit-down Casual Dining Chain." That is, MS has become the Applebee's or Olive Garden of the game industry. Everything looks nice and clean, but is still moderately overpriced and entirely predictable. The management counts on a large percentage of customers coming in for a "cheap" entree, but then spending excessively on the appetizers, drinks, and desserts. These restaraunts, like the XBox360, are wildly popular with the upper middle class who are too lazy to cook (or think) for themselves, and tend to follow whatever happens to be popular at the moment. The mixed blessing of this establishment is that while you know exactly what you will get and it is generally satisfying, there really isn't as much variety as you might originally think. Every restaraunt just has a slightly different take on the same generic menu.
And then there is Nintendo. They are positioning their Wii console to be the corner bar and/or family-run "hole in the wall" ethnic restaraunt. Sure, the quality may vary wildly from place to place, and the "interface" may be lacking (or take some time to get used to)at some restaraunts. However, taken as a whole, it is this class of eating establishments where one is most likely going to find the places that have the best -- that is, the most authentic in a given genre -- food, and more often than not, it will be at the cheapest prices, because these restaraunts don't have to worry about all the overhead and expenditures on image.
So, I don't know about everyone else, but most of my favorite restaraunts fall into the latter category, just as I suspect that most of my favorite games in the next generation will turn out on the Nintendo Wii.
Nine @ May 17th 2006 2:48PM
get a life... or better yet: a job.
simply get only one launch title instead of 3 and you spent the same as on the 360 launch...
as for the 600$ version: sony gives me 400$ and a great console because i don't have to buy a 1000$ stand alone blue ray player.
aceattorney @ May 17th 2006 2:49PM
All the more reason to hear what Peter Moore of Microsoft has to say about this situation:
http://spaces.msn.com/aceattorney
Watch Video 20.
josh @ May 17th 2006 2:50PM
Number 11... Check out Sony's stock:
http://www.nyse.com/about/listed/lcddata.html?ticker=SNE
Heck, even go back a little, say to the May 8th and ninth. The company as a whole is'nt doing too well. They're closing 7 factories and firing over 10,000 people. After a chunk being ripped out of the Sony music division with the "non-disc" MP3 format Apple offered with its music player, the i-pod (oh, and no spyware either)and it's online service... Sony hasn't been very profitable at all.
Let's hope they sell more of those LCD t.v.s, alot more!
HA!
Why don't you hop on ameritrade and pick up a few shares while it's hot!
Prediction: MS offers to buy Sony in 3 years.
riffgod @ May 17th 2006 2:50PM
This is just another feeble (very feeble) attempt for Sony to try to get the consumer to believe that the PS3 is worth it's price tag.
Although there is a lot of talk about which console has what to offer, I don't think that much of what's being said will have to do anything with the success or failure of each console. I know it's hard to believe this, but game consoles get sold on the titles available. No one buys a game console because it has the latest edition of Madden. No one buys a game console because it can play dvds or blu-ray discs or hd-dvds. No one buys a game console because they can chat with their buddies over the internet. No one buys a PSP (Sony's other Trojan horse with UMD) because they have yet to put out a game for it that is so great to so many people that you just have to have one. PS3 will be the same way. There will be the inital, "I gotta get this because the I've been programmed to do so (just like there is with every other console), and then the rest of us will wait for a game or number of games that make it a must have system and we'll justify what price we pay by what games they have to offer.
I'm sorry for the long post. I'm sure it will keep some people from reading it, But it's just my two cents so I suppose it doesn't matter.
Vince @ May 17th 2006 2:50PM
Well you could have least put his "too cheap" statement within it's original sentence to avoid this article looking like a party political broadcast for the opposition.
Plus, it is also available for $500 you know.
Blu-ray isn't just about HD films, it's also a very high capacity medium and if you think the mega games of the next few years won't be needing a lot more space then you're living in the past.
Judge it on what it does, not on the spin coming from Sony and Joystiq.
CUBS-BEARS-BULLS-RULE @ May 17th 2006 2:52PM
you rule #16 the ps3 was the first to use dvd's for playing games on they were smart there but they waited for the price of dvd player to become cheaper to manufacture on there system now that ps3 didn't wait it will take a while for the ps3 to drop in price cause blue ray players by themselves r $1000 and ps3 is $600 and eveything else in the system but the browser part in the ps3 is cool hopefully the do an update to the 360 where u can do that but then the system is to much like a computer maybe but whatever sry if i misspelled
LaughingMan @ May 17th 2006 2:54PM
Given that they're about to take an enormous loss on these machines, I don't think they're looking down us. I think Kutagari is given to insane pontifications, sure. Fact is, however, Sony are going to take a massive loss on production of these machines, and all told they are, given what individual elements cost in the market, a good value. An Xbox 360 with equivalent hardware addons to the premium PS3 will probably end up costing more.
The real question is whether or not consumers want Blu-Ray, which is what Sony are staking this on ultimately. And I think, period, that the majority of people don't. Right after college I worked in a video store and man were people pissed as VHS got phased out - this may not reflect data but in my personal on the ground experience it was rough and now people are settled. That's a huge chunk of the population who are not going to bother upgrading to HDTV for a long time. Likewise, friends who come over say they cannot tell the difference between HDTV and SD when I flip from Lost in 4:3 blocky ugliness to the HDTV version. There are far more people who lust for Metal Gear Solid 4 alone than Blu-Ray. Does Blu-Ray offer any advantage to gamers? Given the inclusion of hard drives in all PS3s, doesn't Blu-Ray mean that processing power can be lifted from decompressing assets?
Even given the ranting about the premium PS3 - everyone always wants the best but ultimately how many gamers out there have a HDTV set with HDMI? Seriously? 10 million? I doubt it.
I think in terms of dry facts the PS3 is an incredibly powerful piece of home entertainment with exceptional tech for its price. Whether or not people badly want or need one, however, is something they haven't thought about. It's too soon. Check back a year after launch and let's see where we're at. I predict the PS3 owns Japan followed by the Wii (which will launch on a tide of goodwill but once in many hands won't impress as much as it could)... In the US perhaps the 360 ends up dominating that market, closely folllowed by the Wii. Sony take it in the shorts on the PS3 in US and Europe. Everything changes.
Kengro @ May 17th 2006 2:55PM
This looks to be the first round ever i don't get all consoles, i don't want blueray and i don't want to pay 600 for something i don't want in the first place...
I guess it will be 360 and wii for me
Paul Cosgrove @ May 17th 2006 2:56PM
Personally, I think the fact that Sony still let Kutaragi out in public is a sign that they've lost it.
Things like this are just making it worse; it's one thing to say "We know it's expensive, but it's a Blu-Ray player too and will offer great gaming experiences" and entirely another to suggest we should just be thankful Sony are being so generous to us miserable peons.
CUBS-BEARS-BULLS-RULE @ May 17th 2006 2:57PM
NINTENDO WII-CHUCKY CHEESE
XBOX 360-CHILIS
PS3-THE 4 SEASONS (WAY TO EXPENSIVE NOT AN AVERAGE PERSON CAN GO THERE OR GET A PS3)
LOL
Maestro @ May 17th 2006 2:58PM
It's easy for a rich Sony exec to tell me it's worth the money. But I'd like to hear him explain what makes his PlayStation 3 $200-$300 better than the 360. What's so "upscale" about his PS3 that makes the 360 "slop at the cafeteria"? Seriously, show me! I'm all ears. Show us your online network. Show us your killer graphics that can only be had because of Blu-Ray. Show us 1080p gameplay that blows 720p/1080i out of the water.
Really, we're waiting. You've got the most captive audience you'll ever have so let's see this upscale experience already! Or could it be that you've made one or two bad feature decisions and now you're hoping we can pay for that mistake? If you manage to deliver on your hype, you'll make loads of cash. If you show us a $600 rebranded 360, well done MS.
Vik @ May 17th 2006 3:00PM
What gaming demographic do you think the PS3 should betargetted to?
I think 18-34. Realistically many in the older side of this range (23-34) have jobs, pay bills, manage an income that gets eaten up by a bunch of things - but still can save. They are also the group with the greatest earning/spending potential.
But being a part of this range, I feel Sony is marketing to 14-18 year old guys named Bravos - who's father owns a massive cruise company on the mediteranean shores of Greece. They haven't offered an intuitive console that simplifies the home entertainment solution. Sony has offered a complicated machine that seems dedication in time that frankly my age group just doesnt have.
Gonzo @ May 17th 2006 3:01PM
It looks like the nay's have spoken.
I keep coming back to the thought of why am I going to pay that much for something that's probably going to (like everything else sony) break in a couple of months.
The ps2 is great but I wouldn't have gotten it for anything more than free.
I'll put money down for the Wii but that'll probably work longer than I will.
CUBS-BEARS-BULLS-RULE @ May 17th 2006 3:03PM
!!!!!!!!!!!!!HELL I'LL BUY A PS3 IF IT HAS A GEORGE FORMAN GRLL IN IT CUZ IT LOOKS LIKE ONE AND IF IT HAS A HEMI IN IT WITH A V8 ENGINE LOL ITS TO EXPENSIVE FOR JUST A GAMING MACHINE CUZ I DON'T WANT ANYTHING EXCEPT A GAMING MACHINE REFER TO ME BY MY #!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1111
boots (former bd (former b)) @ May 17th 2006 3:04PM
josh, I've been actually predicting the same thing as you.
If Sony goes indeed bankrupt, Microsoft could buy them, as they can outbid Phillips, Panasonic, et al. Not that I like the idea, but for Microsoft that would be huge: Enabling Backwards Compatibility with all Sony and Microsoft consoles on Xbox 720, plus entering the consumer electronics, mobile phone, movie, music, and overall entertainment business at once. That would lead to eventually more business buying and convergence et al... and I fear that.
I'm still getting a PS3.
Mike @ May 17th 2006 3:04PM
Ok, this may have been answered, but what speed will the Blu-Ray drive be in the PS3. Originally I heard it would be single (1x) speed which doesn't bode well for load times or movie playback (Sony's supposed trump-card). 360 already updgraded the in-deck DVD-ROM, how long will it take Sony to upgrade the Blu drive? It's funny, I'd buy a PS3 if it blew away the 360 graphically (it most likely won't) but I'll buy (or attempt to buy) a Wii at launch and it won't be nearly as strong as 360.
josh @ May 17th 2006 3:05PM
Oh... here are the other 2 console makers :
http://quotes.nasdaq.com/quote.dll?page=charting&mode=basics&selected=NTDOY&symbol=NTDOY
http://quotes.nasdaq.com/quote.dll?page=charting&mode=basics&selected=MSFT&symbol=MSFT%60
Looks like Sony and Microsoft are not fairing so well after E3.
I wonder if those Sony fanboys' opinions are "worth" as much as those investments!
HA!
mercatfat @ May 17th 2006 3:05PM
I wish Ken would start acting Japanese instead of this faux-"American asshole" crap.
It's like the Dead or Alive guy, but less fun.
David @ May 17th 2006 3:05PM
@ Josh # 25,
If you maybe read a little into the situation at all you might understand the facts a little better. Sony has actually had more profit in the last year in its sales, but higher taxes cut in and turned those profits moot. It's also a little thing called preparing for the future, that is, Sony is more then willing to loose a little (a LOT) of money in order to make some (a LOT) profit in a few years. Take this gamespot article:
____
Sony Corporation called a press conference today in Tokyo to announce its consolidated results for the financial year ending March 31, 2006. Though the company's operational results were strong, an increased tax rate resulted in a year-on-year decrease in net income.
Sony's sales and operating revenue of 7.5 trillion yen ($63.9 billion) grew by 4 percent, while operating income of 191 billion yen ($1.6 billion) beat the previous year by 68 percent, turning heads on Japan's Nikkei stock exchange. However, an increased tax rate on the company's deferred tax assets led to a weaker bottom line than those numbers would suggest: Net income for the year came to 123.6 billion yen ($1.06 billion), a 24.5 percent decrease from the preceding year.
On the gaming side of the business, Sony's game division showed strong revenue performance but lackluster profitability, with 958.6 billion yen ($8.2 billion) in revenue yielding only 8.7 billion yen ($75 million) in income. Despite revenue growth of 31 percent, profits for the division fell 80 percent year-on-year, a sharp decline that Sony attributed to continued high R&D costs for the PlayStation 3 and "charges associated with preparation for the launch of the PS3." As a result, the game business was a drag on the company's overall profitability this year; despite bringing in about 13 percent of overall revenue, games yielded only 7 percent of the company's profits.
Sony reports that PS2 sales held steady over the last year--an impressive achievement given how long the console has been on the market. The company shipped 16.2 million PS2s during the financial year, as well as 14 million PSPs. The introduction of the PSP has been a boon for the bottom line; much of the gaming division's growth over the last year was due to sales of PSP hardware and software.
Other bright spots for the company included its life insurance business and LCD TVs, where the Sony/Samsung joint venture has gained market share at archrival Sharp's expense.
___
http://www.gamespot.com/pages/news/story.php?sid=6148465&page=3
GQ @ May 17th 2006 3:06PM
You are just a Nintendo fanboy who hates Sony. Sony are the best. Get over it. Go buy a lollipop.
sandro @ May 17th 2006 3:07PM
Sold out at launch!!! I need mine *-)
SuperUser @ May 17th 2006 3:07PM
Bye, Bye Sony!
Hi Nintendo (for games) and Apple (for everything else)...
David @ May 17th 2006 3:08PM
@ Mike
Sony announced the drives are 2x speed
Kevin @ May 17th 2006 3:08PM
I don't understand why people continue to back sony with the 'it has blu-ray so it's def worth 600 dollars'.
Please tell me where I can buy anything that is affiliated with blu-ray right now. NOTHING! Their is no reason to buy a blu-ray drive right now. No media. No movies. Their is absolutley nothing out in the market and sony is just trying to push the blu-ray format through their PS3.
Clint @ May 17th 2006 3:08PM
I don't know what M$ gave you guys from Joystiq on that bus, but it sure paid off with some bad coverage of Sony!
jon @ May 17th 2006 3:09PM
The words of Shane Kim from a recent interview by TeamXbox.com. Shane says the reason Sony flip-flopped on the hard drive is because Blu-Ray load times are so slow that it must have HD to make up for it. 360's faster drive has much shorter load times (as anyone owning a 360 can tell you Load times are very short).
Shane Kim: Nothing has changed, really. You look at a game like Oblivion, there was no concerns about how much content we could put on a DVD. We haven?t seen any developer complaining, at all, what the Xbox 360 is capable of doing. If anything we?ve heard more concerns regarding the very slow disc access speed of Blu-Ray technology ? that?s why the PS3 is required to have a hard drive in both of the their SKUs. From a games standpoint, nothing has changed. I understand why Blu-Ray is great for Sony, but I don?t understand why Blu-Ray is great for games. There?s no choice there. That?s a pretty big thing to require consumers to sign up to. When it comes to the Xbox 360, we provide choice ? whether it?s the Core package or the HD-DVD add-on.
Now that Sony is talking about the two different SKUs for the PS3?there?s no HDMI in the 20 GB SKU. With no HDMI you can?t output at 1080p, so I just don?t understand that. If 1080p is the ?true high-definition?, at least by Sony?s doctrine, how can you have Blu-Ray and not output at that resolution? I think we are in the sweet spot. I feel very good about that.
J B Cougar @ May 17th 2006 3:10PM
Kutaragi says PS3 is "too cheap"? Hmm.. I think PS3 is "going to fail"
Pete Carrier @ May 17th 2006 3:11PM
Let's face it, gamers are cheap, and will go to great lenghths to get a good deal. As much time as we spend on our gaming machines and playing games, it is "relatively" in-expensive (CHEAP). Any hobby that you spend that much time doing, (skydiving, scuba diving, hockey, GOLF) costs much more per hour. Get over the price you know your gonna have one the day it is released. It may be an initial hurt to your wallet but in the long run you have to ask youself how many hours of enjoyment did you get out of it? Then you can ask youself was it worth it, my answer to that question to any console I have bought, which is most consoles ever released is a resounding yes.