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It's reporting season, and Sony has revealed just how much it has cost them to win the HD war for Blu-ray, through sacrificing the PS3, and why they could not really afford to cut prices sooner than they have.
According to the figures, Sony's PlayStation division's losses since 2007, the launch of the PS3, is now at $4,695,000,202. $1,970,923,859 of which was lost in the first year of launch, with the latest quarter showing a loss of $653,333,333 (losses actually increased from $413,541,667 in the previous quarter, possibly due to exchange rate issues). It is very normal for game consoles, in its first year, to be a loss making venture. The profit comes later from software licensing and sales, and as hardware costs decrease, from hardware sales as well.
It is well known that Sony's decision to include a Blu-ray drive in the PS3, which meant delays to the release of the console and added cost, meaning that every PS3 sold so far has meant a loss for Sony. The decision to include Blu-ray won the HD war for Sony against rivals Toshiba and their HD DVD format, but the success of the PS3 so far has been the side effect. Only until recent price cuts has the PS3 started selling the way that the PS2 did during its heyday, but this move may actually further increase Sony's losses.
As a comparison, Microsoft's gaming division has been profitable since 2008 and Nintendo has never had a loss since since 1998 (they made $5,691,428,301 last financial year).
More:
This forum post has all the figures for all the game companies, very useful indeed:
According to the figures, Sony's PlayStation division's losses since 2007, the launch of the PS3, is now at $4,695,000,202. $1,970,923,859 of which was lost in the first year of launch, with the latest quarter showing a loss of $653,333,333 (losses actually increased from $413,541,667 in the previous quarter, possibly due to exchange rate issues). It is very normal for game consoles, in its first year, to be a loss making venture. The profit comes later from software licensing and sales, and as hardware costs decrease, from hardware sales as well.
It is well known that Sony's decision to include a Blu-ray drive in the PS3, which meant delays to the release of the console and added cost, meaning that every PS3 sold so far has meant a loss for Sony. The decision to include Blu-ray won the HD war for Sony against rivals Toshiba and their HD DVD format, but the success of the PS3 so far has been the side effect. Only until recent price cuts has the PS3 started selling the way that the PS2 did during its heyday, but this move may actually further increase Sony's losses.
As a comparison, Microsoft's gaming division has been profitable since 2008 and Nintendo has never had a loss since since 1998 (they made $5,691,428,301 last financial year).
More:
This forum post has all the figures for all the game companies, very useful indeed:
