Stringer: Wii business model superior to PS3’s

Sony CEO Howard Stringer has admitted that PS3 hardware sales aren’t ever likely to recoup the $3.3 billion losses the machine has already occurred.

In a wider interview, Stringer also admitted that he had played on a Wii – and said that Sony had “neglected to pursue” Nintendo’s audience effectively in the past.

He added that Wii "may [have] a superior [business] model" – despite calling it an "expensive, niche game device" in the past.

“The major difference lies in the fact that Nintendo makes money with the hardware alone, which may be a superior business model,” he said.

“But the Wii is not succeeding at our expense – it is not hurting us. We decided years ago to build a game console that offers much greater functionality. The Playstation 3 has an enormous processor; it is gradually emerging as the central server in our users' homes.”

When asked if PS3 could make back the money it had lost, Stringer added:

“Not for as long as I live. It will certainly take some time. The traditional business model for the PlayStation envisaged us making a loss with the hardware in the early years until the production costs had decreased to a point that enabled us to break even.

"In the meantime, we earn money with the games. We are currently at the stage in which we need to get a grip on the production costs. That takes time. We are already making more money with the games than we are losing with the hardware.”

Discussing Wii, he commented:

“It's a different experience. The Wii is a well-made device that has found a new target group. For a while, we held the same target group with the SingStar karaoke game. But perhaps we neglected to pursue that avenue.

"PlayStation games are rather designed for those who play a lot. Although it's a different strategy, it pays off. We currently have a production bottleneck with the PlayStation 3.”

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Tags: Sony , ps3 , howard stringer , playstation 3

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