
Operating losses at platform holder’s gaming unit expected to exceed YEN 100 billion
Sony has said that it expects losses in the unit to be double its initial forecast for the financial year ending March ’08.
Reuters reports that contrary to its initial prediction of losses totalling YEN 50 billion, it now expects its gaming losses to exceed YEN 100 billion ($875 million). The reason for the change is the lowered retail price of PS3, meaning Sony is making an even greater loss on every unit than it was before.
However, despite its gaming troubles, Sony still expects its overall electronics business to beat previous predictions.
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Comments
Very Bad News
Launching a successful platform may be a license to print money when you get it right (Nintendo) but it is still a multi billion dollar gamble as Microsoft and now Sony have proven. If these losses continue for much longer will they be able to go ahead with PS4?
Remember that the 100 billion yen loss includes big profits from PS2. So the PS3 is losing an even bigger amount than that headline figure.
Re: Very Bad News
Bruce, I don't think Microsoft have proven that at the moment. Microsoft's gaming division is either in the black, or nearly there, (depending on which sources you use) after their second console. Their business model was to make losses on the original xbox, and to make a profit on the 360, and they look like they are going to do it, even taking into account the consoles they've had to replace.
Sony have entered a marketplace witha ludicrously high price point, not tried hard enough to develop enough individual games, or to secure any truly good exclusives, then screwed over the european customers by charging even more for reduced functionality.
I seriously doubt that they will learn from their mistakes, but I hope they will, and will right them all next time around, let's not forget, Sony is a massive company, and if it thinks there is a chance of profit in it, there will likely be a PS4 in some shape or form.
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