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PS3 pushing SCE $1.71 billion into red

Sony CEO tells press conference that the game division's fiscal-year losses will be double previous estimates.

434 Comments

Last week, Microsoft announced its financial results for the quarter ending September 30, 2006. As usual, its game division lost money--a lot of money. For the July-September quarter, the company's Entertainment and Devices division, which makes the Xbox 360, lost $96 million--an improvement over the $173 million the company lost during the same quarter in 2005.

Today, one of Microsoft's rivals in the game arena announced that it too would take a loss on its own game division. Speaking at a press conference in Tokyo, Sony CEO Sir Howard Stringer announced that losses at Sony Computer Entertainment are expected to now total 200 billion yen--or around $1.71 billion--for the fiscal year ending March 31, 2007. The figure is nearly twice the shortfall Sony originally projected.

"Considering some of the additional costs of PlayStation 3, we have to generate some excitement and profits from elsewhere in the company to offset the performance of PlayStation 3," Stringer told the Reuters news service.

One reason cited for the increased costs is Sony's decision to drop the price of the lower-end PS3 model in Japan. At last month's Tokyo Game Show, the company announced it would lower the price of the 20GB version of the next-gen console from 60,000 yen (about $515) to 49,980 yen (about $429).

Despite the increased cost, Stringer expressed confidence that the PS3 will be a success. "The point really is that PlayStation 3 is already finished and has been tested in America and has been deemed a creative success," he said. "In the end that is what counts."

The executive also expressed apparent befuddlement about some gamers' anger that the PS3 launch was pushed back to March 2007 in Europe. "I think the idea of worrying about a delay in PlayStation is slightly strange to me," said Stringer. "Every complex technology runs the risk of delays."

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feryl06

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Sony shouldn't worry. The PS3 will sell and in a few years, this will all be a bad dream.

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madhatter73

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If MS Wanted to silence Sony permanently, all it would take is $100 price drop to the 360 on November 15th...

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castlevaniaX

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We have to expect this from Sony in the first place. PS3 costs Sony too much money because of the Processor and the blu-ray technology.

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EternalDove

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I'm with Humanchild. Frankly I don't care if they die, but another console, is another console. I buy and play 'em all!

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Bushido_Vx

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1.71 billion dollars? ...Sony better start praying.

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BlackDragon110

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Wow nearly 2 billion lost. Microsoft didn't even lose that much in 2 years. I don't think they lost that much since entering the video game market. The PS3 isn't even projected to make a profit for 2-3 years. So anyone else thinks it's time for Sony to start worrying? Their entire game devision may be riding on the PS3.

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fastpunk

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I doubt they were expecting losses of 1.7 billion. Considering that the PS3 isn't very stable and isn't very innovative (+ the high price), I doubt it will be a success. I'm not a Nintendo fan (far from it actually) but the Wii will probably win this next-gen console battle.

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hmsmichaelot

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[This message was deleted at the request of the original poster]

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EternalDove

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Hah, saw it coming a mile away. Sony is out-a-here, they need to stick to what their good at - computer screens and TVs.

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humanchild

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I don't get it. I mean even if you're a total MS fanboy why would you, or anyone, be pleased with Sony's downfall? If there's no competition MS sure as heck isn't going to try as hard to please it's consumer base. If there's no choice then they don't have to worry about you going to someone else. I mean it seems to me that the people who should worry MOST about Sony crashing and burning are MS fanboys. (Nintendo is just crazy enough to go on innovating even when there's no discernable need. ...and God bless 'em for it.) I hope all 3 systems find some measure of success because then we, the consumers, are the ultimate victors. Anyone who would delight in the downfall of a rival console (MS, Sony, or big N) is either a shortsighted fool, or a corporate lapdog. Maybe both.

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TintedChimes

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They'll make it back once they nickel and dime us like xbox live. That's how it works, lose on the console but gain big on the games, I give them two years to make it all back, if that. Same with Microsoft, they'll make it back within two to three years. As for Nintendo, well they already make profit off each console sold and they make money off games, hmmm....guess they're doing fine. Video games are always like this, a lot of Research and Development and then wait a while and rake it in for 3-4 years, start all over again. It's always like this, cyclical, not down or up, cyclical.

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lordoblivion_kz

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I find it funny that the only Console manufacturer to actually make money is the only one who only makes video games. Coincidence?

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ashcroft_123

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i can't believe how damn idiotic some people can be how can you be happy when someone is in trouble would you like it if I'd be laughing at you if you had problems sheesh

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Ryuketsu2043

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Sony won't go under no way..but..its not gonna help their system at al lthats for sure...oh wel lalls fair in games and war...

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amurphy245

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if blue ray doesnt become the next gen disk format sony are in some serius sh**

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LancerVI

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This is where Microsoft has a huge advantage over Sony. Microsoft can keep doing what it is doing and play the waiting game with sony. Like Reagan took on the Soviets........outspent them until they were broke. That's what MS is doing to Sony. One of these years, in the not so distant future....somethings gotta give. Sony is going to dump a huge portion of its business.

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SpareJesus

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nuttysack Makes me wonder if Nintendo is doing ok, ahh they'll be fine, Microsoft and Sony know they have to take losses at first. By the way, Nintendo are doing okay. ;) They've already had their report filed; they're up 456.2 million dollars or so, if I recall the article correctly. It's on the news index. They're doing well, either way. MS and Sony however seem to be losing money at the moment. They should soon regain it, though.

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tarv4973

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I may buy a PS3 out of pity now :)

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REVOLUTIONfreak

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more bad news for Sony, what's new

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Dace67

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Ouch. SCE is hurting. I have my doubts that the PS3 can really recover the SCE from those losses.

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NoShenanigans

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Eh, If Sony goes under, we can only hope that new games go to the 360 because I really don't want to be forced to play games under the iron fist of the Wii remote.

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madman1230

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DAme, it's bad i mean 1.7 billion, Hold on sony i need my ps3 realy bad, i need good games.

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Progn0sticator

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*Makes a noise like a plane plummeting to the earth* Sorry Sony, you lose at life XD

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TristanH12

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SONY what are they doing, they are always digging themselves into a hole, I want them to be successful but come on, is it really worth losing a billion+ dollars? I just love the final concluding statement, it is classic.

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billysea

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These company are basically suiciding everytime they make a system. Why? Becauase they rely too much on technology and less on idea. They put all the resources mindlessly into making a powerful system and ignore about the core of gaming - fun. Losing money is doom to happen to anyone who are too lazy to come up with idea for the next video games and only building raw technology.

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Warlypwnage

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sony is in deep trouble. unless they can come out with some great exclusives for the ps3 besides Resistance, Fall Of Man, i think they are finished in video games.

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LosDaddie

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:lol: :lol: Great news!!:D What an awesome announcement to start the week. The downfall of Sony is happening before our very eyes!:lol:

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nuttysack

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Makes me wonder if Nintendo is doing ok, ahh they'll be fine, Microsoft and Sony know they have to take losses at first.

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mrvl912

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i guess it has to be successful now, huh? is nintendo the only one making a profit right now? looks like they're making a comeback.

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tondi

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second post....not bad, anyways, even if i like sony, im not exactly surprised, i mean, what did you expect. The console hasnt even been released!! but i think they will get out of this hole...eventually

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demollyon

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muahahahaha! i love that stuff!

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ajy2

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Doesn't get much worse than that...

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