Forums - Sales Discussion - Sony Lost Over $3 Billion To PS3 Cost, Pricing Imbalance

Pricing the PlayStation 3 below its production cost caused Sony to lose $2.16 billion in 2007 and $1.16 billion in 2008, the company revealed today.

Sony's fiscal 2008 annual report delineated potential risk factors to its investors, outlining that "the large-scale investment required during the development and introductory period of a new gaming platform may not be fully recovered." The loss figures were provided as an example of the "significant negative impact" introducing a new platform can cause at first.

"In the past, large-scale investment relating to capital expenditures and research and development for the manufacture of key components, including semiconductors supplied for [PlayStation 3] was also recorded within the Electronics segment," the company said.

In order to stay competitive, said Sony, it had to invest large amounts of money in research and development to introduce the PlayStation 3 into the market, and these sorts of expenditures don't always get recouped, especially if a platform "fail[s] to achieve such favorable market penetration... resulting in a significant negative impact on Sony's profitability."

Even if it can recoup its investment, Sony said, it's still possible to have lost large amounts of money on the platform's introductory period, and even a successful PS3 might take a while to replace what it cost to produce. These possible outcomes are currently a risk for the company, Sony said.    

http://kotaku.com/5018899/sony-lost-331-billion-to-ps3-cost-pricing-imbalance



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Poor Sony



I hope my 360 doesn't RRoD
         "Suck my balls!" - Tag courtesy of Fkusmot

I believe this was posted earlier today, or I'm having a severe case of deja-vu.

Anyways, wow. That's a lot of money.



A bit slow on the uptake: http://www.vgchartz.com/forum/thread.php?id=30551&start=0



Why do people hate Sony so much , the Sony hate is incredible , this article has already been posted !!!

Does the Anti-Sony mentality conflict reading comprehension or what.




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wfz said:
I believe this was posted earlier today, or I'm having a severe case of deja-vu.

Anyways, wow. That's a lot of money.

Sorry. I must have missed it. I hadn't seen it stated that Sony was mentioning possible outcomes and citing risks. If they're starting to frame things like that then maybe they have some turn around plans in mind. It would be good for them if it worked out.



Million said:
Why do people hate Sony so much , the Sony hate is incredible , this article has already been posted !!!

Does the Anti-Sony mentality conflict reading comprehension or what.

If it's any consolation, I have complete indifference towards Sony and do not care about their success or failure.  



Dolla Dolla said:
A bit slow on the uptake: http://www.vgchartz.com/forum/thread.php?id=30551&start=0

Yep.

I thought it would be posted in the sales forum. My bad. Hopefully this thread will be locked.



Wasnt Sony in trouble last year, I heard they were close to going bankrupt. I read that somewhere a long while ago but I am not sure. Dont shoot me for saying this!! I am asking a question here!