Checked the thread over on GAF and saw this...

http://mandetech.com/2012/01/10/sony-masaaki-tsuruta-interview/

Mentions that the Cell on PS3 cost $400 Million to develop. It says the engine used for PS4 could actually cost up to $1 Billion. Could something like this actually be a cause for the loss? Not all of it, obviously, but a large chunk?

Well that could potentially waste that mound of money that they got from PS2 I was talking about earlier.

Like many I was having trouble believing that Research and Development could justify these losses in whole, or as a major contributor. That said I like to deal in facts more then I like to deal in opinions. I am glad that I made sure of my facts before posting. While it is true that Sony did sell its stake in semiconductor manufacturing to Toshiba back in 2007. Which would have left the majority of R&D up to a third party to absorb. After all Sony doesn't have to be the one designing a component. They just need to buy it from someone else.

Sony did do something rather unexpected they left the industry, and then they bought back into the industry, or it seems that was the plan. They sold their stake in the Cells manufacturing to Toshiba, and now it appears they have bought it back for less then they sold it for initially. I suppose it seems smart unless Sony repeats the losses that they suffered initially to begin with. The cost of acquiring the manufacturing facility is 835 million dollars, and that does go a long way to explaining these numbers. Especially when you factor in true research, and development. Not just finding a way to make the chips better, but retooling the facility to manufacture them. All of that really before work can be put into developing other components.

So I guess I am vindicating the Sony Defense Forces on this one, and some of you probably need to pull back on your blood lust. These losses are the PS4 production line gearing up as it were. Personally I don't think this was a great strategic move on their part, but on the plus side for the fans of the Cell it doesn't look like Sony is going to abandon this particular piece of hardware moving forward. So you can rejoice your probably going to have real backwards compatibility for the next console in the series.

http://pulse2.com/2010/12/24/sony-to-buy-chip-fabrication-facilities-from-toshiba-for-835-million/

Ouch. That's a lots of monies lost...

That plant was bought not to make cell chips, but to make camera sensors, so it has nothing to do with SCE losses.

http://www.psu.com/forums/showthread.php/295102-Sony-to-spend-1-billion-on-CMOS-sensor-production

These are obviously horrible numbers, but I'm curious how many assets Sony (as a hole) has, how much could Sony cut and sell to other studios?

(I'm thinking selling Spiderman to Disney would at least get them some quick cash before the next Avengers movie :P)

@Kynes

Thanks for the link it was quite informative, and to be honest quite perplexing to say the least. You would think that a plant geared to produce Cell chips would continue to be used as such. Actually it seems to be a bit disquieting from a gaming standpoint. Do you know which division is housing the loss by any chance.

I don't think that SCE is the division that takes the "loss" (I'm not sure in Japan, in Spain accountability you spread the investments in several years) but it's probable that the division that sells the CCDs (one of the most profitable Sony products) is the division that takes the hit.

I remember when some of us said that Sony didn't need that 50 US$ cut, as they were selling good numbers, and they needed the extra cash, but most people here said that SCE was very profitable. It seems that time has put everything in its place.

Wow.

Plus if we were to add in the loss of FY2011 for Sony (being at -$1,191,610,100), then SCE would now only have at least $21,803,100 left in profits.

Bascially, the profits that they made from both PS1 & PS2 are almost completely wiped clean.

And that number is without taking into consideration the R&D expenditures made before FY1995.