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http://videogames.yahoo.com/feature/sony-h...the-ps3/1223467

Sony has lost over $3 billion on the PS3

Mario and Master Chief seen hi-fiving.

By Ben Silverman

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Think you paid too much for your Playstation 3? Don't expect any sympathy from Sony.

In the company's fiscal 2008 annual report, Sony revealed that they've now lost roughly $3.3 billion (that's billion with a B) on the Playstation 3 since its launch. That breaks down to $2.16 billion in 2007, followed by a notably smaller but equally daunting $1.16 billion loss in 2008.

The reason? Pricing the console below its production cost. That's right - that hefty $599 you paid for the PS3 back when it first launched was significantly cheaper than the cost of producing it in the first place, and while the retail price has come down some, the losses keep piling up.

Investors have reason to sweat. In a statement, Sony claimed "the large-scale investment required during the development and introductory period of a new gaming platform may not be fully recovered." They went on to note that they've invested a great deal of money into R&D for the console, a sum they might not be able to recoup if the PS3 "fails to achieve such favorable market penetration."

Sony fanboys should take heart, however. Losing money on hardware is relatively common in the video game biz, as companies routinely lower prices to sell more units and thus stimulate software sales. Sony's game division saw a 26% sales spike last quarter, a trend they expect will continue on the strength of strong exclusives like the recently released Metal Gear Solid 4 and the upcoming sequel Resistance 2.

But will it be enough?

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I'm pretty sure that this is really old news. Sony said that they first year or two they would lose money before that they eventually start gaining it back. I saw somewhere that the price of manufacturing has dropped considerably, and they are currently making money on it.

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Wolmacs will quickly spin this off as a known issue. Losing money on hardware in fact is really nothing. He'll turn around and start ripping MS about how much they've lost something along the lines 5 Billion and a token RROD rant and how it could be possibly more.

I predict he'll say when you sell 200 million plus units world wide combining PS1 and PS2 it all in good fun for Sony. What a tool....

;)

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Sony has made a lot of money indirectly from PS3... In blu-ray and in software/accessories.

Sony WILL make a lot of money from PS3 by the end of its life cycle. They chose to lose money in the beginning. Everybody knew they would lose money. Whether they sold 100 million units in a week or none, they would've still lost money.

Sony's gaming division is more than PS3. So the gaming division is actually not doing bad. PS2 and PSP are very profitable.

Let's talk about that Microsoft 7-billion-dollar hole they're in. :hehe:

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womfalcs3 (6/27/2008)
Sony has made a lot of money indirectly from PS3... In blu-ray and in software/accessories.

Sony WILL make a lot of money from PS3 by the end of its life cycle. They chose to lose money in the beginning. Everybody knew they would lose money. Whether they sold 100 million units in a week or none, they would've still lost money.

Sony's gaming division is more than PS3. So the gaming division is actually not doing bad. PS2 and PSP are very profitable.

Let's talk about that Microsoft 7-billion-dollar hole they're in. :hehe:

again, can you defend sony without bringing up MS?

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No offense, cause I own all three consoles, but isnt it better to get something worth more than you paid rather then buying something worth less than you paid?  The PS3 costs more to make then they sell it for because it has more advanced, high-end technology.  The 360 costs less to make then they sell it for because its technology does not meet the same standards and comes with a lot less additional hardware features as well.... yes sony itself might have lost money, but in terms of console owner vs console owner... its not looking so good for the 360 technology wise.

Thats like saying "haha you bought an $80k porche for $50k, but porche is losing money!!  I bought this ford truck for $20k and it only cost $10k to make so ford is richer!!!"  Ummm yea.... you still overpaid and are stuck with a pos ford that will probably break on you at any moment.

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joremari (6/27/2008)
womfalcs3 (6/27/2008)
Sony has made a lot of money indirectly from PS3... In blu-ray and in software/accessories.

Sony WILL make a lot of money from PS3 by the end of its life cycle. They chose to lose money in the beginning. Everybody knew they would lose money. Whether they sold 100 million units in a week or none, they would've still lost money.

Sony's gaming division is more than PS3. So the gaming division is actually not doing bad. PS2 and PSP are very profitable.

Let's talk about that Microsoft 7-billion-dollar hole they're in. :hehe:

again, can you defend sony without bringing up MS?

you do realize the :hehe: at the end of the MS thing right?

then again its true.

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Sony is a multi-billion company, you have to lose money to gain money, that's how the business goes.

Only thing that is turning gamers away from the ps3 is because there isn't many great games for it, only thing Sony really have is MGS, GT5, Resistance and Socom.

I do see the ps3 picking it up though, its always been like this with them, losing money but wind up making it back, plus more.

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I've always said that the PS3 was the backdoor to make sure Blue Ray won the format wars.  Most people I know that have them, myself included, purchased them to be BR players.  Only recently did I see gaming on that machine as something that may be worth my while.  That being said, Sony stands to make a huge amount of money on the royalties from Blue Rady discs and technology, so this 3 billion, or whatever number it ends up being, will be a drop in the bucket. 

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