Why not? Cell development was one of the main reasons for the huge losses. 

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.

@ everyone who wrote something about the following things


- Even if Sony pulls an Xbox 1 they won't pull the plug on PS4. They're still a big company. They'll suffer, no doubt about it, but they won't pull out. It would be stupid for them, they'll learn from their mistakes and carry them over to the PS4.


- Blu Ray is winning because of the PS3. If Sony wins the HD war, then all the royalties they'll make on Blu Ray disc could cover any debt aquired by the PS3.

- PS store is definetaly not a saviour for the PS3. I don't see them making more then $100 million NET/year on the PSN.*


* PSN reasoning - Its going to be a long time before Sony has 5 million users who spend $20+ on the PSN. Actually they would need to spend more since Sony only takes a small cut of each transaction. Then take in consideration server cost, salaries, upgrades. I'm sure they make money off the PSN, but nothing in comparisson that would help cover the loses.

Sony is not as big a company as many would think, they're actually the most fragile of the three in console gaming right now. The idea that Sony is actually a massive multifaceted corporation with one waining limb is really a myth, after multiple set backs due to recalls in their other industries and the fall of their gaming division, the entire corporate body has been put in significant jepardy.

Microsoft is the undisputed financial giant with money to burn.

Nintendo is currently financially the second (or is it third?) largest company in Japan at the moment putting them well above Sony financial prowess.

I hate to burst your bubble, but sony is the small fry of the three in the console race this generation.

Also, why anyone would believe that Sony, a company renowned for its huberus, excess, arrogance, exagerative and unique "interpretation" of facts in its press releases can be taken at face value now without any evidence provided to their benefit is an even more baffling question in my opinion than whether or not they can actually break even by march.

What's more important to Sony: Being Candid or quelling fears that the PS3 is in danger? 

The PS3 is not in danger. Sales continue to grow. As soon as sales drop back down to 30k per week and remain flat, only THEN it can be said that the PS3 is truly in danger.

In order for the PS3 to fail, HD media formats must also fail. While HD media only represents less than 10% of the overall home media market (still a new but growing market), unless the sales trends of the last 12 months make a sudden 180, HD-DVD will never be the only HD media format, meaning Blu-Ray is here to stay. As long as the PS3 remains a comparably priced BR-D player, it also stays.

woah i just read both pages this is a insane read i loved it. Atfer reading all that..we all know that sony takes risks, this is one they were willing to take, and theyll stay true for Ps4

Yeah but will they ever make money on the PS3, probably not

 That isn't earn! It just converting one asset to another. Only if they valued the CELL manufacturing under $800 million they have a profit from it, otherwise it was allready in the books!

Not a great position for Sony; however, they do make unexpected profits elsewhere due to the ps3. For example...I had no interest in an HDTV until I got my ps3 and saw how terrible playing on SD was compared to my friends HD so I bought a 60" Sony 1080p SXRD & a 40" 1080p Sony Bravia....and I had NO interest in a psp until my ps3, and have bought 2 since...one for me and one for my nephew....And I also own 62 blu-ray movies....

So yes, they lose money on the ps3...but the ps3 is the sole reason for me owning....
2 HD Sony TVs....2 PSP's....and 62 blu-ray movies....

So yes, it is a large loss, but Sony is making some "unrealized" profits elsewhere due solely to the influence of the ps3.

Not only that Just_Ben, Sony took out a 800 million dollar loan to help launch the PS3. Selling the Cell manufacturing to Toshiba won't even cover that now that loan when you figure in how fast interest builds on 800 million dollars.