Sony to take a huge loss with mounting PS3 startup costs

[bingo83]

It's only natural for a company to lose out in at least the first year of its console launch, which slowly evens out and turns into a profit as units are sold. This is well known in the video game industry, however Sony announced yesterday that it plans to lose some odd $817 million dollars related to start up costs for the PS3, which is just astronomical.

The company has already sunk over $400 million into promoting the console and the implementation of the Blu-ray drive along with the Cell processor will no doubt help aid in creating an even larger hole for the company to climb out of, as analysts speculate Sony will spend between $500 (£280) and $800 (£440) dollars to manufacture each console.

I dont see Sony hitting the £280 mark and fully expect the console to go on sale in the UK for nearer £400.

[Blaze Lord]

They won't sell it at cost, bingo, so how much it'll cost Sony to make a console doesn't really matter all that much to what the retail price will be.

[bingo83]

I fully expect them to make a loss on each and every console they sell. With Sony they want units in each and every home possible. With the technology under the hood I still feel that it will be at least £100 dearer than a 360 at launch.

[Blaze Lord]

It's not just Sony. I don't think any console was ever sold at or above cost for the first two years of its existence.

I really think Sony might launch at the same price the 360 launched. But Microsoft will respond with a price cut, since they have a headstart and deeper pockets.

[bingo83]

At the present time Microsoft has deeper pockets than Sony. Sony's other divisions have been losing lots of money recently. The have lost a huge amount of money by not being able to compete in the mobile audio department with Apple taking a near 55% share of the market. Their TV department has also lost ground to the likes of LG and Samsung. Sony has backed blu-ray in the next wave of video formats and shareholders will be hoping that it doesnt end up with a new BetaMax format. I am sure Sony will sell Millions of PS3's but I dont think the Next Gen wars will be as clear cut as the last generation of video games consoles.

[Blaze Lord]

I agree. Sony's hoping the PS3 will be to Blu-Ray what the PS2 was to DVD. But I don't think that's the case. People aren't as ready to switch over yet. It's a different story in Japan, because they've had high def going strong for years, but not the rest of the world.

[Raisedbyflames]

competition cna only meen good thigns for us better deals and better prices.