Truly amazing, of course like they have already admitted this year they very well may never make that back. Considering according to latest estimates the PS3 is running dead last in third party software sales in the US I really do not see this dynamic ever changing.

Your reading comprehension skills still not up to par? *sigh*.

Sony didn't write this article, an analyst did, so blame the analyst and not Sony.

A lot of you are mis-reading this.

He's saying that the money Sony made on PS2 hardware since it became profitable is less than what Sony is losing on PS3 hardware.

For the past few years, the PS2 has cost less to manufacture than it's sold for, so Sony was making a bit of money with each console sold. The PS3 costs more to manufacture than it's being sold for, so Sony are losing money on each console sold. The money being made from PS2 hardware since it became profitable is less than what's been lost from PS3 hardware.

This is not surprising.

Money being brought in from game sales, periphial sales, and PSN download sales are not included in this estimation, for either console.

This is taking a narrow look at things.

Lets say Sony lost a few billion on the PS3, some would say they have to make that up ENTIRELY from PS3 revenue in the future, but that's not true.

A lot of the PS3 costs have come from the cell processor. That may seem like a bad investment at first but Sony is selling the processor to a lot more then video game consumers. It's now selling to a lot of research institutions and other locales that need high speed computing with extreme perfornace. It's also moving into servers and other Linux devices, a great fit because most serious server providers use Linux (ditto with most research institutions). I would estimate that Sony will easily turn a profit on the cell in general with any money for the PS3 being icing on the cake. They will also have to pay WAY less for the PS4 development since they'll almost certainly just use an updated version of the cell (which other video games can't use since it's a Sony owned tech).

Additionally a lot of costs have been from Blu Ray drives. Blu Rays are now about 15% of the HUGE DVD market and are gaining traction. How much do you think not repeating beta max is worth to Sony? I would say at least one or two billion. Using the PS3 to win the format war alone is worth at least as much as all the losses on the PS3 have been. They get royalties for every Blu Ray sold from every maker and every studio. When Blu Ray starts to become the dominant form of external media (probably in 3 or 4 years) Sony will look brilliant with its victory in the format war setting it up for at least a 10 year lock on external media formats.

Finally the PS3 has also sold other sony devices. Their TV sales are way up, partially I'm sure becuase more people need HDTVs for their HD systems; ditto with recievers and other products Sony makes. Most notably the PSP has started to pick up no doubt thanks to synergy with the PS3. I know I bought one mainly because of that feature. I can stream all kinds of stuff from my PS3 to my PSP (even some PS3 games) and that was a major reason for picking the PSP in the first place.

Sony is not Microsoft where the 360 is the ONLY game in town. Sony makes a ton of things most of which synergize with the PS3. Microsoft has flat out lost 6+ billion on the Xbox debacle, I guarantee you Sony is billions ahead across the 3 generations of the PS especially if extra revenue in other areas as a result of the PS brand is calculated in.

How can you say Sony losing money vs Mocrsoft losing money be ok. I agree with the Blue ray drive that was worth some money to win that.  MS got into it to stop Sony from taking over the entertainment hub which they have succesed in.  Also MS has been in the black for a few quarters and looks to make money on the 360 going forward.  They are also building there brand Xbox which from the sales they generated looks like they are succeding.

Neither company wants to lose money, NIntendo they make money from day one.

That is brave....What do you understand for better?  Sales?  Metacritic scores? Your opinion?

Sony lost more money on the PS3 in its very first quarter after launch than the PS2 had made in profits over its six year life up until that point, and then some.

@ thread

Article: PS3 is losing money, lots of it

Sony Gamers: Pffffftttt! Just some Market Analyst, what does he know?

Article: PS3 will sell the most software

Sony Gamers: This man is a genius!

Onlooker: I don't know if that sounds right. In fact, I'd say that prediction is highly unlikely

Sony Gamers: Oh, can you predict the future? I didn't think so. Sush!

@ Konnichiwa

I can see truth in his words. But what with Sony's software sales and PS1 also making billions it kinda means they still have a profit and even itf it's small, they'll make money back on the PS3, I'm sure. Just like M$ is now making some money on the 360 after the X-box loss of billions...right?

Impulsivity

@Impulsivity

Great reply! Right on the money! Sony has been around since the 1940s they look at things in the long term, they leveraged the popularity of the Playstation brand with their huge Columbia Tristar movie studio (which recently bought MGM) to win the format war. Bravia Tvs are incorporating the XMB and Sony has all of their divisions working toward a common goal. That of owning the living room. The PS1 lasted for 7 years the PS2 will likely last at least 1 more year (9 years total) so why can't the PS3 last 10? Bluray royalties are worth billions and the Sony games division has already posted a profit. Sony may have lost all the money made from the the PS2 but developing Bluray and the Cell? I'd say thats worth it.

Good thing the article wasn't about the "runway succes of the Zune" or about how Vista is so broken companies aren't upgrading and Microsoft is stopping Windows XP production to force them to upgrade. Hmm I wonder why my brother just got a 70k job in downtown chicago switching a large law firm from Windows to Linux? 

 can you back that statement up a little more?