PS3 has lost Sony $4.7 billion, may be profitable next year

by Griffin McElroy on Oct 30th 2009 11:15AM

First the bad news: Sony's recently released FY Q2 2009 financial report included some pretty upsetting figures for investors to witness -- namely, that the company's "Networked Products and Services" division, which includes video game hardware and software sales, reported a ¥58.8 billion (or $654 million) operating loss during the quarter. The drop off was attributed to "a decrease in PS2 hardware and software unit sales, and the impact of the appreciation of the yen." Indeed, the PS2 took a hit this quarter to the tune of 600,000 units year-over year.

Now, the worse news: The financial report included enough data for various GAFers and VG247ers to slap a number on the amount of money that the PS3 has lost Sony: $4.695 billion. Sure, that number seems outrageously high -- because, well, it is -- but it's hardly an apocalyptic loss. Actually, it's reminiscent of losses incurred by Microsoft with the release of the original Xbox, which drained the company of $4.202 billion over a similar four-year period.

Finally, the good news: Shortly after the financial report was published, Sony CFO Nobuyuki Oneda claimed the PS3 was getting cheaper to produce, stating, "the difference between sales and materials cost has been reduced to between 10 and 20%. Within the year, it could be in the single digits." He later added, "we'll be able to reach profitability at some point in the next term." Considering PS3 sales jumped 800,000 year-over-year with the launch of the Slim, we've got a bit of advice to aid in this endeavor: Keep making it skinnier.

Source

Tags: japan, losses, market, ps3-slim, q2-2009, sales, sony

Reader Comments (101)

that $5 billion loss by Sony doesn't include their foray into the CPU making business. they wanted to compete with the likes of Intel, AMD, IBM, etc. they built foundries from scratch because the long-term view was that the Cell would be the first processor where they learn the ins and outs of making a CPU and grow from there. sony had very broad ambitions. the Cell was the beginning of the new CPU industry from Sony, the PS3 was going to to take over the multimedia home theater, and the Blu-Ray would become the dominant media. gaming was just the way to achieve all that. the PS3 was the trojan horse to win all their other industries.
all companies are still trying to achieve the holy grail of making the family room the center of all your spending. movies, internet, music, microtransactions up the ying yang.
and Sony's failing on all three aspects. the one aspect they're succeeding is making a PS3 a great gaming platform which is what they should've focused on. the ps3 is now matching the 360 as a gaming platform.

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