Sony loses $18 per console in US, possible profit in UK

[Squilliam]

letsdance said:

Squilliam said:
If the hardware losses as implied are this low, then they must be losing money on something else. There are only 3 areas where they have big enough expenses to really lose all that money.

1. Advertising? They must be spending a lot here.

2. Game development? Face it, all HD publishers have been making losses and I doubt that Sony is any different.

3. Research and development? If they're spending heavily here, it means Console number 4 is inbound sooner than you think.

Advertising is a sink hole for dollars. HD publishers arent first party. I doubt Sony loses much here considering they get a good chunk of the money compared to third party. And R&D is very possible. Ps4, PSP 4000, Ps3 slim, PSP Go 2000 are all logical to assume are being woorked on.

They have almost as many developers as Ubisoft but they had 1M fewer sales for the month of January than them. They are infact a large publisher so they need a lot of sales to keep their teams fed, especially as they have had a stable workplace for a long time, with promotions, raises etc it costs a lot of money. In addition to this they spend a lot on technical development as well. They'd need almost as many sales as Ubisoft by comparison, and Ubisoft has the advantage of being able to release for two to four platforms.

R+D is an ongoing cost, it ramps up when they start paying other companies for technology but as a base I don't think it really diminishes as I haven't heard of layoffs going on. Im not sure what they're doing in relation to the PSP2, but they're probably working on a replacement and nearing release for this year or next year. They probably don't want to be beat to market by the DS replacement either, especially as the DS next will have a strong media capabilities as its rumoured to contain a Tegra 2 core.