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PS3 Loses 3 Billion Dollars
July 1, 2008
Complaining that the PS3 costs to much, well don’t expect any major price drop soon. Sony’s 2008 financial report has revealed that they have now lost over 3 Billion Dollars on the Playstation 3 since it was released. The next generation console lost 2 billion dollars in 2007 and a further 1 Billion dollars in 2008.
The reason for this monumental loss of money is that the production costs are far more than the retail price, due mainly to the controversial inclusion of the Blu-Ray Player, which although the recognised leader in HD Video, has failed to capture the imagination of the movie watching public who seem content to stick with DVD. Although the price of a new PS3 has dropped slightly since its inception, because it still costs more to make than they make back in selling it, a major price drop is likely to be far away.
Investors in Sony are naturally nervous about the current situation and in a press statement released by Sony they remark, “the large-scale investment required during the development and introductory period of a new gaming platform may not be fully recovered.” They also say that the huge amounts of Research and Development invested into the console may not be able to be recouped if they are unable to achieve good market penetration. Basically if the PS3 doesn’t do better than the XBox 360, Sony are in a spot of trouble.
Losing money on console hardware is nothing new to the industry, its a common practice to sell a console at a loss to stimulate sales in games, as a person will only own one console but may buy a many games, which is where they hope to recover their costs and turn a profit. Sony’s game division experienced a 26% increase in game sales in the last quarter, a trend expected to continue, mostly on the strength of new releases like Grand theft Auto 4, Metal Gear Solid 4 and the upcoming First Person Shooter Resistance 2. The question that everyone is asking, is will it be enough.
by Scarface of Cheats2k
Topics: General, Industry News, Playstation 3 |