Saturday, August 30, 2014
Search
  
Submit your own News for
inclusion in our Site.
Click here...
Breaking News
Intel Hopes To Improve Its Mobile Business With Ex-Qualcomm exec
Kingston HyperX Demos DDR4 Memory at PAX Prime
Corsair and ASUS Fastest DDR4 Memory Kit
Intel Unleashes its First 8-Core Desktop Processor For Gaming
Samsung Partners with Nike On Running App
Samsung Applied for Samsung Quantum Dot TV Trademark
New iPhones Expected at Sept. 9 Event
Google Tests Drones For Delivery Of Goods
Active Discussions
help questions structure DVDR
Made video, won't play back easily
Questions durability monitor LCD
Questions fungus CD/DVD Media, Some expert engineer in optical media can help me?
CD, DVD and Blu-ray burning for Android in development
IBM supercharges Power servers with graphics chips
Werner Vogels: four cloud computing trends for 2014
Video editing software.
 Home > News > Games > Sony Lo...
Last 7 Days News : SU MO TU WE TH FR SA All News

Tuesday, June 24, 2008
Sony Lost Over $3 Billion To PS3 Cost


Sony's PlayStation 3 pricing strategy to offer PS3 below its production cost has caused the company to lose around $3bn over the past two fiscal years.

According to Sony's fiscal 2008 annual report, pricing the PlayStation 3 below its production cost caused Sony to lose 232.3 billion yen ($2.16 billion) in 2007 and 124.5 billion yen ($1.16 billion) in 2008.

"The large-scale investment required during the development and introductory period of a new gaming platform may not be fully recovered," Sony said.

Sony said that developing and providing products that maintain competitiveness over an extended life-cycle requires large-scale investment relating to research and development, particularly during the development and introductory period of a new platform.

In the past, large-scale investment relating to capital expenditures and research and development for the manufacture of key components, including semiconductors supplied for PLAYSTATION3, was also recorded within the Electronics segment.

Despite the losses, Sony is still willing to offer the console even for free, according to a report by Tweak Town. Sony is expected to offer in Australia a PS3 with every purchase of a Sony Bravia TV.

"It is particularly important in the Game segment that these products are provided to consumers at competitive prices to ensure the favorable market penetration of the platform," Sony added.

Should the PS3 platform fail to achieve such favorable market penetration, there is a risk that this investment, or a part thereof, will not be recouped, resulting in a significant negative impact on Sony's profitability. In addition, even if Sony is able to sufficiently recoup its investment, significant negative impact on Sony's operating results could occur during the introductory period of the platform. Further, even if the platform is ultimately successful, it may take longer than expected to recoup the investment, resulting in a negative impact on Sony's profitability.

An example of such a significant negative impact during the introductory period of a platform are PS3-related charges that resulted in losses of 232.3 billion yen and 124.5 billion yen within the Game segment for the fiscal years ended March 31, 2007 and 2008, respectively. These losses arose from the strategic pricing of PS3 hardware at points lower than its production cost.


Previous
Next
Catalyst Hotfix For Radeon HD 4800 Series        All News        Asus Unleashes the Latest Intel P45 Chipset Based ROG Motherboard
PSP v4.01 Update     Games News      PS3 Firmware v2.36 Coming Soon, v2.40 to Include Trophies, In-game XMB

Get RSS feed Easy Print E-Mail this Message

Related News
Sony PSN Back Online
Sony Offers New Smart Tennis Sensor
Sony Debuts Ultra-Compact a5100 Interchangeable Lens Camera
Sony, Huawei, Microsoft To Announce New Smartphones at 2014 IFA
Sony And Best Buy To Jointly Boost 4K Content
Sony Bravia S90 TV With Curved Screen Coming In Europe
Sony Releases The AS20 Action Cam, New Cyber-shots
Sony Reports First Quarter Profit
Sony Settles 2011 PSN Hacking Case
Sony Xperia Z3 Specs Leaked
Sony Invests in Image Sensor Production
Sony Failed To Pay Web Hosting Bills

Most Popular News
 
Home | News | All News | Reviews | Articles | Guides | Download | Expert Area | Forum | Site Info
Site best viewed at 1024x768+ - CDRINFO.COM 1998-2014 - All rights reserved -
Privacy policy - Contact Us .