sladesurfer
07-29-2006, 04:34 PM
http://arstechnica.com/news.ars/post/20060728-7379.html
Sony wants to make sure its investors are prepared for the massive initial losses the company will take on the PS3 launch.
Sony is clearly placing a huge investment into their next-gen console. The Cell processor development alone has cost the company US$2 billion, and costs for marketing will only rise as the launch date approaches. In addition, there is a danger that Microsoft may put pressure on Sony to reduce the PS3's price by announcing a price cut for the Xbox 360. According to Merrill Lynch Japan, such a move could result in a second-year loss for Sony of US$730 million, and another loss of US$457 million in its third year. This would be in stark contrast to the PS2, which was profitable in its second year, to the tune of US$757 million. Fortunately for Sony, Microsoft has stated that they have no plans for any price cuts on the Xbox 360 prior to the PS3's launch, although they have not ruled out the possibility of an attractive holiday bundle. For his part, Yuhara insisted that Sony will completely recover its PS3 investment within five years
Sony wants to make sure its investors are prepared for the massive initial losses the company will take on the PS3 launch.
Sony is clearly placing a huge investment into their next-gen console. The Cell processor development alone has cost the company US$2 billion, and costs for marketing will only rise as the launch date approaches. In addition, there is a danger that Microsoft may put pressure on Sony to reduce the PS3's price by announcing a price cut for the Xbox 360. According to Merrill Lynch Japan, such a move could result in a second-year loss for Sony of US$730 million, and another loss of US$457 million in its third year. This would be in stark contrast to the PS2, which was profitable in its second year, to the tune of US$757 million. Fortunately for Sony, Microsoft has stated that they have no plans for any price cuts on the Xbox 360 prior to the PS3's launch, although they have not ruled out the possibility of an attractive holiday bundle. For his part, Yuhara insisted that Sony will completely recover its PS3 investment within five years