Note: LOSS FIGURES for SOFTWARE AND HARDWARE.
I just lumped it in for both for now.

To repeat: I can't change the reported operating income for the GAMES division - it is still (US$1.245 Billion) - LOSS for FY ending Mar 2008

@DMeisterJ @TWRoO

If we change the following assumptions for FY ending Mar 2008 to:
PS2 software - $4 per unit
PS2 hardware - $10 per unit
PSP software - $4 per unit
PSP hardware - $10 per unit

Given the above the numbers - the PS2 and PSP segments generated:
US$1.18 Billion (in operating income)
then it must mean that the PS3 segment (hardware and software)
LOST US$2.42 Billion dollars in FY end Mar 2008

If you take the same assumptions for FY ending Mar 2007,
then the figures are:
PS2 and PSP = 1.21 Billion
PS3 division = LOSS OF $3.18 Billion

FY ending Mar 2006
PS2 and PSP = 1.36 Billion
PS3 division = LOSS of $1.29 Billion

TOTAL LOSS = 1.29+3.18+2.42 = 6.89 Billion Loss for PS3 hardware AND software in total.

Loss is much less but then think about the implication:

PS2 (and to a lesser degree PSP) wasn't very profitable at all (for the past 3 years) and relied on MASSIVE volume to generate profits.

So, either you accept that PS2 and PSP (together) is not very profitable
OR
PS2 and PSP is very profitable and PS3 losses are much more massive and would be very difficult, if not impossible to recoup this generation.

@ Jia Jia
I think you may be the one without any financial or business analytical skills.
Please think before you post.

@Rock_on
Let me see you calculate based on Sony numbers - here is the link:
game division numbers are always on page 4 or page 5 of the pdf reports
http://www.sony.net/SonyInfo/IR/financial/fr/index.html

@ |_emmiwinks

If you are saying that the PS2 makes more than $15 per unit, that is OK. I have no objection.

Just know that if PS2 hardware makes more than $15 per unit, then YOU are saying that the PS3 lost even more money.

You can't have it both ways -- that is PS2 makes a LOT of MONEY and PS3 didn't lose that much money.

That is the original thesis of the post. If you assume ps2 is wildly profitable (see unit hardware and software sales), then you MUST ACCEPT that the PS3 division (hardware and software) is LOSING A LOT OF MONEY.

And if you assume that the PS2 is not very profitable, then PS3 didn't lose as much money. But then, what chance will the PS3 have to recoup those losses then?

That is you then have to assume that PS3 is WILL BE MORE PROFITABLE than PS2.
Which I don't think even the biggest Sony fan will agree with.

@ rasone

Sources are Sony financial reports reported to the public. Available at their own website.
Please see previous post for the link.

PS3 will be the most profitable Sony console. This thread fails. $11 billion  dollar, loss lol. The accumulated PS3 losses are around 4 billion dollars and the PS3 is making profit now and the loss will be erased within two years.

One of the problems with an analysis like this is there are far too many assumptions which are not being generated with care ...

From (probably) 2001/2002 Sony would have been spending money on R&D for the PSP and PS3, and these costs would have steadily increased as they got closer and closer to releasing these platforms. It is quite plausable that these R&D costs could be measured in billions of dollars, but they would have also been spread across multiple divisions within Sony because the technologies have use outside of gaming.

The PSP was rumored to be sold at a pretty major loss when it was first released, and with Sony's track record this seems like a reasonable assumption. Even if the hardware isn't sold at a loss, the massive marketing campaigns that game consoles tend to have typically prevent the console from breaking even until it has a large enough userbase, and steady enough software sales that the revenues for the platform surpass the marketing costs; with how anemic the software sales of the PSP are it may still not be a profitable platform for Sony.

Sony has spent years acquiring game developers so that they could have more in-house developers than any other publisher (in particular any first party publisher); there are costs associated with buying these developers, and recuring costs associated with funding development within these companies. On top of that development for PS3 games have ballooned in cost and development time, and it will be years before the revenue of these games is counted against the cost of developing them.

... Basically there are tons of costs and investments which are not being accounted for that will (at least in part) be responsible for a lot of the losses the Playstation division has faced.

This should be locked, buried, and burned. The creator of the the thread basically attributes all PSP losses to the PS3, and not just in his first massive lump of assumptions but also his second. And since he makes an asinine assumption like that, it makes the PS3 look even worse because he attributes gains to the PSP that never existed to begin with. Basically, if the PSP lost sony $1 billion in that timeframe, then he's attributing $1 billion in losses to the PS3 that it didn't cause.

Obviously the thread creator is an avid X360 fan boy. This thread is trolling and flame bait. Please lock the thread.

Wow 11 billion? OOOOUCH!

Microsoft just called, They said thier 1 billion loss a year aint shit compared to sony's

@ Rock_on

Its called Scenario Analysis - that is why I don't really care what numbers you use in the assumptions as long as it is consistent.

Based on your numbers - PS3 lost $4 Billion dollars. Again, if that is true, then this is the math:

FY end Mar 2008 = (1.245 Billion) Loss
FY end Mar 2007 = (1.969 Billion) Loss
FY end Mar 2006 (first mention of PS3 in the financial statements) = 75 Million Profit

Cumulative Loss = (3.14 Billion) Loss

So: If PS3 (hardware and software) lost $4 Billion
Then PS2 and PSP for the past 3 years, after selling a total of 80.46 million units of hardware and 721.2 million units of software in TOTAL
ONLY made $0.86 Billion (860million dollars)

Which works out to roughly $1 PROFIT on average for either PS2 and PSP hardware and software sales.

Is this what you are saying?