They didn't think they would do well? Honestly whats worth more to anyone, 11c per disc royalties or leadership of the console industry and billions of dollars per year profit? No rational mind would give up billions per year in profit. The opportunity cost here isn't the cost of PS3 vs possible royalties, its billions of dollars profit not made + losses made vs royalties at 11c per disc.

???? why would they release 2 uncharteds 3 R&Cs and 4 CoDs in one year???

i think what he ment was that its cheap now with a decent amount of good games + exclusives with many more to come in the future

They've gotten more than just disc royalties. If the PS3 is responsible for the disc royalties, that means you are saying the PS3 is responsible for Blu-Ray winning the format war. That means that the PS3 is also responsible for every cent of profit that Sony makes selling Blu-Ray players. Similarily, anything Blu-Ray related that profits, means the PS3 is responsible. The PS3 could also push a sizeable number of 3DTVs, which would be more profit attributable to the PS3. It isn't just about the royalties on the discs alone.

Now, I'm not saying Sony has made some masterstroke and will be earning billions per week. I'm saying that they took a calculated risk, which unfortunately for them went wrong. Even so, the PS3 could well end up profitable for Sony as a whole (hardware+software for PS3, Blu-Ray players, BD disc sales in the future, 3DTVs that sell because of PS3 etc) in the far future, just nowhere near as soon as Sony would have predicted (they probably thought within 10 years, whereas it will probably take 15, 20, 25+ years).

All that doesn't justify the idea they would knowingly give up several billion in what seemed to be pretty assured profit.

Logically it makes sense that they believed that the PS3 would sell better than it did at launch and the competitors, especially Nintendo would sell worse than they did. It doesn't make sense to assume they are still on the same plan they had at launch. The PS3 is a calculated risk gone wrong but definately a calculated risk they believed they would come up ahead on even if hindsight says otherwise.

@Red Part: Depending on what they thought was possible, they may well have considered it worthwhile to sacrifice the billions of the Playstation brand. Considering that the maximum possible number of consoles they would have deemed themselves able to sell would probably be ~150 million (at the max), they probably saw leadership of the TV and Blu-Ray sectors as far, far, far more profitable (home consoles make up a tiny market compared to worldwide TV sales, or current DVD sales).

I agree that they most likely expected both the 360 and Wii to not perform as well as they did and they probably are not on the same plan they originally were, but that doesn't mean that they threw away guaranteed billions (which, seeing how well the Wii has performed, may not have been guaranteed had they only tried to match the 360's specs and keep costs down) for nothing. They could have made far, far more had Blu-Ray taken over quicker (and it could yet become the market standard, which could replace the billions lost on the PS3 in losses + lost profits).

I bought my fat PS3 in 2007 February and Yakuza3 limited PS3. It worth the money I paid. There are all the types of games I like in PS3 unlike XBOX360

Its getting there. For my money Teh C3LL still has a little to prove.

It was a cost bumper upper that has arguably meant large delays in quality titles and even today is partly responsible for shoddy ports.

I unlike many will not lay all blame for porting problems at the feet of Devs. Teh C3LL has to carry some of the blame.

Drop the cost to 150 GBP and find someway to eliminate the poor ports and then we are talking.

Heck I'd be one of the first to snap one up at that price.

The profit from their games division made up a significant proportion of their overall profit and recent losses. Relative to TV and Blu Ray profit it still makes up a larger slice of their 'potential' overall pie and its something which doesn't rely on too many factors outside of their control as in with Blu Ray its a consortium and they aren't the only major stake holder and as with 3DTV they aren't the only 3DTV so competition limits their profitability. Consoles are a micro-monopoly and the potential profits can be far greater.

I am willing to bet quite a lot that they believed honestly that they could release a PS3 for $500-600 or Euro and blaze a trail through both the console and media markets and that their profit would be higher than ever. If you look at the level of investment and statements before and during the early part of this generation they were drunk with success and they over-reached. They bet on being number 1 in sales for consoles, the PS3 still selling for $400 + (because it was that good to them) and massive Blu Ray royalties. Its a pity that the Champagne is still one ice.

I don't say this because I hate Sony, but because I believe its a realistic interpretation of the events of this generation. I don't mind if you disagree and we can continue to discuss this if you want.

Hmm...Main point was price of 699€ and you get crappy games..
And how about release of Xbox 360 with Playstation logo?
Or with Wands/Gems so it could rival Wii?

Sony didnt expect ps3 to sell much better than it did. There fiscal projections confirm this. Sony would've expected the losses aswell, obviously you have to isolate ps3 losses and not strong yen, recession. Without strong yen the ps3 would of been healthily profitable at $299 now. Bluray will ensure profits for the next decade even by doing nothing at all. Sony has proprietary tech in bluray players and discs.