Sony Expects Huge Losses on PS3 Launch

Since the Blu-ray drive and Cell processor from Sony are so expensive to manufacture, there’s no other way for them to have a huge loss on every PlayStation 3 console sold. We all know that they make money off of the games these days, though.

Today Sony announced details from its fourth quarter and full-year fiscal results. For the quarter ended March 31, 2006 the company lost 66.53 billion yen (about $569 million) on 1.85 trillion yen in total revenue. Last year, during the same months, Sony lost 56.5 billion yen on total revenue of 1.7 trillion yen. But the reason for that was because there was a difference in taxes in the US, compared to the year before that (2004).

In November, when the PlayStation 3 is set to launch, Sony expects the segment to fall down by a staggering 100 billion yen ($871.6 million) in operating losses during the business year as it prepares for launch.

“We believe that we can lower costs dramatically [on the PS3] through chip shrinkage and by cutting the number of parts but there is no way to avoid high costs in the first year,” Sony Senior Vice President Takao Yuhara told a Tokyo news conference.

Obviously there’s no way to avoid launch shortages, but Sony will do anything to do it better than the Xbox 360 launch, which didn’t go as smoothly as Microsoft wanted. But seeing that Sony is making a big loss on the production, it looks like they really want everyone to enjoy their systems as much as possible during the holiday season.

This could mean that the games are going to be a bit more expensive than we’re used to, but I’m just being skeptic here. What do you think? Will this affect the price and quality of the games?

Since the Blu-ray drive and Cell processor from Sony are so expensive to manufacture, there’s no other way for them to have a huge loss on every PlayStation 3 console sold. We all know that they make money off of the games these days, though.

Today Sony announced details from its fourth quarter and full-year fiscal results. For the quarter ended March 31, 2006 the company lost 66.53 billion yen (about $569 million) on 1.85 trillion yen in total revenue. Last year, during the same months, Sony lost 56.5 billion yen on total revenue of 1.7 trillion yen. But the reason for that was because there was a difference in taxes in the US, compared to the year before that (2004).

In November, when the PlayStation 3 is set to launch, Sony expects the segment to fall down by a staggering 100 billion yen ($871.6 million) in operating losses during the business year as it prepares for launch.

“We believe that we can lower costs dramatically [on the PS3] through chip shrinkage and by cutting the number of parts but there is no way to avoid high costs in the first year,” Sony Senior Vice President Takao Yuhara told a Tokyo news conference.

Obviously there’s no way to avoid launch shortages, but Sony will do anything to do it better than the Xbox 360 launch, which didn’t go as smoothly as Microsoft wanted. But seeing that Sony is making a big loss on the production, it looks like they really want everyone to enjoy their systems as much as possible during the holiday season.

This could mean that the games are going to be a bit more expensive than we’re used to, but I’m just being skeptic here. What do you think? Will this affect the price and quality of the games?