This really puts Nintendo's recent increase in profit estimates in perspective.

http://www.usatoday.com/tech/gaming/2007-04-04-psp-price_N.htm

It's the first time Sony has officially lowered suggested retail prices on the PSP since its debut in March 2005. Video game publishers and financial analysts have been urging Sony to slash hardware prices in recent quarters.

Although Sony promised business at the gaming unit would improve by the latter half of the fiscal year, the company said declining sales during the October-December period of Sony's predecessor console, PlayStation 2, as well as the handheld PlayStation Portable and PSP game software, hurt quarterly profits at the gaming unit.

Sony's PSP competes mainly against Nintendo's Game Boy and DS. Despite being launched in 2004, the DS — which some retailers sell for as little as $130 — outsold every other console in the United States in February, registering 485,000 units sold, according to market researcher NPD Group.

Sony miscalculated when it came to the PSP and the PS3, and with PS2 heading into decline they're really starting to feel the hurt

this actually isnt as bad of a lose then I was expecting.

I dunno. 400 million dollars is a lot of money. Especially when PS2 should be raking in the profits, and PSP is supposedly profitable too. I don't know what Microsoft's peak quarterly loses have been with the XBox line, but they never had two profitable consoles while blowing through a billion a year.

The loss was less because they sold 3 million less PS3s than expected. Had they actually sold that many the loss would have been double or worse.

No, that was the third quarter 2006, the PS3 hadn't launched yet.

since when is production free.

 costs them $800 to make a PS3, if they sell one thats $600 back.

Ouch!

Yes - the PS3 had launched (3qrt is Oct-Dec 31st) - and includes any moneys paid for shipment of the units to stores. More production might have hurt less.

This really is *quite* bad. The 3rd qrt is easily the biggest qrt of the year for publishers/producers, and in general if you can't make a profit during this quarter - you might as well give up.

Now Im waiting to see the figures for the 4th qrt (Jan-March 07). A lot of PS2/PSP/PS3 units were sold in the 3rd qrt - and a lot less in the 4th qrt. Sony's figures are not going to make for pleasant reading. Lucky for them, the rest of the company (TVs, LCD screens) have picked up over the same period to offset this loss. 

 You're right. Q3 2006 would be from April 2006 to July 2006, before PS3.

 http://en.wikipedia.org/wiki/Fiscal_year

 We could guess the losses post-PS3 pretty easily, though.

 Assuming $200 loss per PS3 @ 3 million PS3's  = 200 x 3,000,000 = 600,000,000
 dollars.

 Of course, that does not take into account marketing, sony's movie studio, game sales, blu ray sales, etc. etc.

Ok, I'm confused about the exact months. But damn, PS2 sales should be mostly profit and they are still bleeding money. Anyone know what the 2006 total losses were?