Sony plans on breaking even with PS3 March 2009

[Dodece]

Whether some want to concede the truth or not the profitability of the PS3 or the lack thereof it terribly relevant towards the future of Sony gaming. Companies do not run on faith. They run on profit margins. To invest in any industry a company needs to have confidence in the ability to turn not just a profit, but a large profit to offset the risks.

Would you invest in a venture that looks like it will net you a couple hundred million annually if the downside is that you could end up taking a six billion dollar loss if the venture fails. The risk of large losses for minimal gains is not what any company is looking for, and few are willing to look past that. Right now Sony is regretting that.

Right now Sony is bleeding from the eyes, and if you could finagle a honest answer out of them. They would probably tell you that they would never go through this kind of debacle again. Even if at the end of the rainbow there was a small pot of gold. They would concede that the damage inflicted would be worth less then the reward won.

To make matters worse for them next generation. Microsoft will have won some momentum for their brand, and will probably have a strong loyal community. Nintendo will be vocal and resurgent. Both will have shown grown greater profitability from this generation, and thus will have even more money to spend.

The result is that the Sony executives running gaming need to show real profitability before the investors will tolerate another run through the gauntlet. They may just count their blessings, and back out of hardware. Sony couldn't even adopt the Nintendo philosophy next generation. The pricing worked due to vast differences, and next time around Nintendo will have the deep pockets to not only be competitive in pricing, but also spend more on better components.

Really it matters a lot when the PS3 becomes profitable, or if it will become profitable. The PS3 must succeed for their to be a PS4. Were the PS3 to fall through the floor next year you could kiss any chances of the PS4 good bye.