Sony game group down $2 billion

Strength of PS3 in Europe and Japan?!?......erm, huh? This report above isn't about Sony sales in North America, it's worldwide...you think the PS3 is doing any better in Japan? hardly. Sony has been downplaying it's looses on the PS3 for some time, why? simple...they want to keep selling systems, the PS2 isn't outselling ALL the next-gen systems, i don't know where you pulled that from, but it's a crock. The PS2 sales along with the PsP sales are showing sings of loss, i suggest you re-read this report. Developers are already pulling away from PS3, Square/Enix is in the process of developing their games for multi-platform, because it's about time and because they can no longer rely on the PS3 sales like they could the PSX and the PS2. A system is only as good as the games that come out for it, my friend....Sony starts having developers moving to greener pastures (which they will if Sony keeps reporting losses like this) then all you'll have is a overpriced BR player that has no developer support.

Elder_Scribe, The real irony here is that I don't believe that XBOX 360 has sold more units than the PS3 since the PS3 launched, so is XBOX 360 doomed to the same fate? I find XBOX 360s in similar quantities to PS3, these are not indicators of a poorly selling system. You're basing your thoughts on the success of the WII (which I own), which is in no short part due to their incredibly small price tag (compared to other next gen systems). But even being a WII owner, I see right now that 2 years from now, I won't be buying more games for this system. Not that there are a whole lot of titles worth owning right now for it. Darkride66 bought the system largely for the Blue-Ray player. That makes it a REALLY smart purchase. Sony will see through this, without a doubt it may take some time. But while they are taking the hits with the PS3, their PS2 sales are still strong enough to provide some support to the home office. I like many people on this forum would love to see a price drop on the PS3, to get it into my home. But for those people fortunate enough to own one, I wish them the best as they enjoy Heavenly Sword and Lair this year.

Of course they lost money. They had no killer games. What? Resistance and that's it?

With the strength of the PS3 in Europe and Japan I'm really surprised that anyone but the most blinded fanboy could be thinking that the PS3 is about to be yanked off the shelf after only a few months. Sony's high end TV's are out of my price range but does that mean they're not being sold. Nope. And the PS2 is still outselling ALL of the next-gen systems. What does that mean? I really don't know but I'm not losing any sleep about Sony or developers not supporting my PS3.

I honestly don't understand what all the hooplah about BR is about. I watched a demonstration at my local best buy on a Sony 40inch LCD television and the picture was very grainy. I've not witnessed an HD-DVD movie as of yet, but I have seen a BR HD movie on a High-Def 40 inch LCD and I was not impressed. The movie took too long to load and the picture quality was inferior to standard DVD. Anyone who does not believe me, can visit your local electronic retailer with High-Def demonstrations. The BR player was also at a price of $999. With a price tag like that....slow playing time and questionable image quality does not warrant a BR purchase. The technology seems underdeveloped as of right now.

Well, let's hope they lower the price on the PS3 so i can afford one!!!! If they keep this up in a few years we will see ps3's in game stop used bins! Come on sony! Clean up ya act!!!!

Whatever you say Darkride66. Hmm....you know i remember back in the day when Panasonic released a system....let's see, it had hardware that dominated the platform marked that nobody really needed, had a decent possible lineup of games, and an overinflated pricetag, and it failed...sound familiar? The PS3 isn't selling, go into ANY video game store and ask the salesperson for a WII......then ask them for a PS3, see what you'll find more of. You lack of business sense is laughable, if Sony loses enough investors and money over this fiasco then they WILL pull the plug on this system. I'm not a fanboy of anything, just stating fact....it happened to the 3DO, Saturn, Dreamcast, Virtual Boy, and so on...what you think these companies couldn't afford to keep out a dying system? sure they could, but it wasn't cost effective...and neither is the PS3!

A few points I'd like to make. Blu Ray was a huge deal for me when I bought my PS3. It's fantastic. Blu Ray's are in my local Wal-Mart, Future Shop, everywhere. Yeah they're pricey, but the quality is there. Does no one remember how expensive the PS2 was at launch? Or the Xbox? Or the PS one? Of course new tech is pricey. That's not rocket science. The PS3 is a bargain for what you get. And once the games start rolling out in earnest even better. I remember when no one I knew had a DVD player. When the PS2 came out they all did. Same thing this time. I don't know anyone with a HD DVD player. Guess what? I know a few people with a Blu-Ray now, and more who are planning on buying and that's because it's their PS3. Still no one with HD-DVD, even the 360 owners (myself included. Why bother? My PS3 plays Blu-Ray. Perfect!) Now this is only a select group, but I know what I see. And people who predict the downfall of Sony because of this? Sony had revenue in 2006 of $68 Billion US. Microsoft had $44 billion. Sony's not going anywhere. Give your collective heads a shake, fanboys. Ooo, ooo, sony lost 1 billion, or 2 billion or whatever and it's revenue is only going to be $66 BILLION THIS YEAR. Oversimplified? Sure, but I'm making a point. The sky is not falling, PS3's are not going to be discontinued and if I have to replace a faulty 360 for a FOURTH freakn' time I'm just not going to bother. ...ah who am I kidding. I have to play Halo 3.

You don't see the wii posting losses like this. The Wii can not keep up with the demand and the price is half that of the ps3. These numbers are troubling even though it is just starting $2 billion is not chunk change and if sony doesn't get some games that take ps3's off the shelves they will be in deep trouble. Sony will eventually have to drop the price of the ps3 to get the console in more homes creating more profit losses. Most people who already have the wii and xbox360 are happy with them. Those people are not going to shell out $600 for the same system. They might consider it if the ps3 price is considerably cheaper.

paabss, I'm not disagreeing with you that Sony has overstepped itself. I'm a Sony shareholder and these losses are not attractive to see at all. The thing that amazes me though is that even with hurting PS3 sales, and the losses that Sony is taking on this initial round, the future looks really good. Look at the total picture, their last generation system still sold 193 million software units, their handheld segment although looking less attractive than DS sales is the only competition nintendo has ever had in that segment, and their PS3 is lined up and ready to go for the wealthy that are ready to put down money to enjoy Blue-Ray. Hardware development ALWAYS gets cheaper over time, so the losses that they are experiencing will eventually turn to profit. I know a lot of people that complain about the $600 price tag, but seeing how high they went for on ebay, I wish Sony had slapped a $1000 price tag on them, especially when they first came out. Sony is in a very precarious position right now, they don't want to piss off the other Blue Ray player manufacturers who are selling some of their hardware for WAY more than $600. The blue-ray format is what will eventually pave the way for Sony's success. The HD format is on the slight decline right now, and as far as Wal-mart (or any other retailer for that matter goes), they will sell what they can make a profit on. If they sell enough HD movies to make a profit, they'll carry them. The fact that product is on the shelf is not an indicator that the product is selling well.... just look at the PS3.

erm, not really ghsacidman.......the NES sales were stable throughout the start, Genesis was stable (may explain why they supported that platform for three versions eh?) the PSX did just fine. Sony screwed the pooch, they created an expensive system with features that simply are not needed or wanted, the investors warned Sony about this before the system was released, now there paying the price for their greed.

s_king7, it depends on the Month for BR vs. HDDVD sales. With matrix coming out on HDDVD only (for the next few months) the BR folks will be quiet next month or so. Matrix 1 is made for 1080p. The simple fact is both formats are not selling, which is why this "war" will go on for a while. 50-60% of 2% is nothing. Many great movies aren't coming to either because the market is not there. Like Jurassic Park, that would be great. Star Wars III, LOTR. Nothing planned. VOD is the future, not some DRM invested disc media. Consumers are sitting this one out, I cannot blame them. But since I want to watch Planet Earth in HD I'll pick HD. If in 5 years HD dies I won't care anymore than I care (today) about VHS vs. Beta.

No, the question IS how much did Sony lose, because if they keep losing money like this then it's not about when there going to drop the price on the system but if there even going to keep supporting the system at all. Personal opinion? if you don't own a PS3...don't buy one, there losing money hand over fist and developers aren't going to support a dying platform. If you own a PS3, sell it while the getting is good.

Everyone saw this coming. This is no big deal in the least... New consules loose money before they make money, thats just the way it is.

Ouch, that must have hurt.

The question is far beyond how much money did Sony lost in last 3/4 months. What we do want to know is when are they going to down PS3' price. I'm in Portugal, Europe, where a PS 3 cost 599 Euros (round 650 US dolars). Too much money, 1 month's salary for many people in Portugal. And, thats for sure: only a price reduction, let's say fixing PS 3 in 400 Euros can iniciate a "overboost" on sales. Otherwise, it will be the greatest flop ever in Sony's history

mddg, like I said, the profits are not off by as much people would have you believe. In other words, if somebody has an estimate, then the estimate is off by x percent, then it gives me an opportunity to highlight the fact that they are loosing money, as though their estimates were off by a hundred percent. Your point about undercharging is correct, except that If they undercharge for a system to attract people, without that many great games, then it is undercharging that is generating system sales, and thats ok. But next year, when production costs are way down, sony can begin to profit off of its system, perhaps even lower the price, assuming better games are out. It's actually better for sony not to sell a bunch of systems right away at a loss if they can keep relatively in step with their 2-3 year targets, which they are. I was actually a fan of their strategy when stores were like "sorry, no ps3s left" -- I thought this was working out well for them (not a huge fan). Why this assumption? What I have just described is the story of the xbox360 its first year, and now they are doing just fine. This being said, I will agree that sony will start to do bad if no good games come out next year--they have about a six month grace period. If they start to sell more systems generated from desired games, at less of a loss, then things have worked out better for sony than if they sold a bunch of systems at launch. What really gets at me is that things like this are blown way out of proportion, and it is spun as though this will cause big problems for sony, when in fact it means nothing in the big picture and it will never affect gamers in any way. I wish gamespot would stick to game reviewing and leave financial analysis to others, although it has caused me to emerge from the shadows and post for the first time.

To those who don't know a thing about HD-DVD and Blu-Ray As far as i know Blu-Ray has 70% of the market and thats from march sales: << LINK REMOVED >> just type "hd-dvd vs blu-ray march sales" on google and there will be further proof and the percentage has gone up from 65% to 70% so please carry on writing the rubbish and if you know about Uncharted: Drake's Fortune then you know how good it is for Games mmmm.. i doubt it! Hd DVD is cheaper, so i dont trustr this numbers cus they arent official, and plus why would Companys liek WALMART support a product taht is loosin market share? Walmar is supportin HD DVD, and not blu ray, so again who is gonna get more market share, the consumer woldnt spend $600 OR $1000 to watch a dvd in a house, lol look whats happenin to the ps3, its sittin in shells, why? cus not games and cus sony did a PSP all over again, Sony focus in Blu ray b4 the games for its ps3, just like they did with teh PSP, they focused in UMD movies b4 games, "Americans are cheap Sony said " not really, i think Americans are smart tahts why we are the world super power, cus we know how to make bussines and save money or spend money in usefull things. Again SONY is lost, Sony Though they were invincible cus it brand, and its payin a HUGE PRICE, 2 billions per month.

It's a good thing Sony makes good TVs to make up for their gaming divison. Introductory price?? So the price will go up soon?

To those who don't know a thing about HD-DVD and Blu-Ray As far as i know Blu-Ray has 70% of the market and thats from march sales: << LINK REMOVED >> just type "hd-dvd vs blu-ray march sales" on google and there will be further proof and the percentage has gone up from 65% to 70% so please carry on writing the rubbish and if you know about Uncharted: Drake's Fortune then you know how good it is for Games

getaconnection: OK. half the people that post here have some type of higher education. I'm surprised you would admit to this because once you start posting "blood boiling" rants on a forum such as this you forfeit any degree creditability. Obviously we don't know you or if you are telling the truth. A masters degree is irrelevant here my friend. -> I know, it's just upsetting because very complex issue that people oversimplify and distort, starting with brendan. I don't think my "rants" are that anger filled, I'm just trying to convey some facts and analysis. Why do I post then? I don't know. It seems like people would like to hear real analysis and context to the situation, rather than a bunch of uniformed opinions. But if you don't like it then I guess don't read it and continue what you are doing. Btw, you don't have to have a master's degree to go to finance.yahoo and look up sony's stock price. I was just as suprised at that as you were probably.

yes mddg_mmcc you made a good point

Well said, mddg_mmcc.

The running argument for Sony is that this was all part of their "plan." And I must agree. Sony planned on losing money on the console, but they didn't plan on losing this much. There's something you all seem to be forgetting... The system isn't selling! The idea of undercharging for your system is to get people to buy it, get a large install base, then make up for the loss and turn a profit through software that every owner of the console needs. That's not happening. Right now there are nearly 3 million PS3's sitting on store shelves worldwide, and little incentive for consumers to buy it. The system may be cheap for what you're getting, but it's far from cheap to people with bills to pay. Plus, as I said pages ago, the benefit of the added horsepower remains to be seen, and there are little to no must-have exclusive games out there, or on the way. Some are also talking about how much Microsoft has lost from the Xbox and 360. But Microsoft's game division is making money. The money you talk about them losing is on the hardware alone. They have made up for it with software, peripherals, and Xbox Live - and have made a profit. And that's the "plan" Sony is using for the PS3. Unfortunately for them, it's not working so well. Go ahead and call me a fanboy, but last generation I probably spent just as many hours playing my friends' PS2's as I did on the GCN and Xbox I owned, and done my fair share of criticizing Microsoft and Nintendo for their idiotic mistakes (360's are still unreliable, they're still selling Core 360's without hard-drives, the Wii still isn't online, and no one besides Nintendo know what to do with the Wii Remote). I give praise where it's due, and criticize when they do wrong. I'm no blind follower of ANY corporate logo.

It's too bad Sony forgot what made the PS2 so enjoyable. It was kept well priced, added the DVD feature to the experience (opposite of BR, which will be overrun, as well as HDDVD by digital downloading of HD movies), and it promoted just about everyone to make games on it. Back in the day, when a developer made a game, PS2 was the first to look at. Now Sony just tried too hard. If it didn't have a Blu-Ray player it would be more affordable and I would have been first in line. But for now I have to settle for all the great games Microsoft attacked viciously to get to their library, and into my xbox360.

Hvac0120, you got it.

Consoles produced for girls? combat1818, you are a sexist. :)

Incubus420 Please?!?!?! Sony has tons of Money, just like Bill Gates...soo who cares. Im sure this is shocking considering, the fact that the system costs about 800-900 bucks to make. Of course they are gonna lose money they are operating "under margin," which is what ever system for the last 1 million years has done in their first year. All Sony needs to do is; ride the wave and get those games out. Lair, MGS4, HS. Then people will buy the system and soon after that people will start buying more Blu-Ray's, becuase that war between the two formats is pretty much over. You and I both know that this is sad and upsetting but everyone knows whats going to happen. Its not like the Dreamcast effect could happen again, or could it?...The 360 does look a lot like the Dreamcast..I didn't say it!?! ________________________________________________ Um, Sony doesn't have nearly as much financial resources as Bill Gates and Microsoft. LOL I don't know where fanboys are getting their information, but it's very misleading and misinformed.

just a word about hd-dvd vs blu ray---if you are in the buisness of mass producing dvd movies you will know that if you choose the blu-ray option your prouction line needs to be completly replaced(machinery--software etc)this costs huge amounts of money--if on the other hand you choose the hd-dvd route then hardly any changes need to be made to your production process--also on 720p and 1080i vs 1080p to produce a game/movie in 1080p is almost 3 TIMES more expensive than producing the same game/movie outputting at 720p/1080i----and we all know that for every 100 GAMES launched on the PS3 only about 2 will output in 1080p-----------PS3 OWNERS WAKE UP!!!!!!!!---1080P= IN GAME MOVIES

I guess Sony and Microsoft forgot that some people want a video game system and not a next bloody computer. If wanted a next computer, then I will buy one. All I want is bloody game system to play games, not to roam on the internet and other crap. I guess the Wii does not look bad right now.

Losses were all part of the 'plan'... Sony knew that they were going to be bringing a new technology packed in with more new technology for an unbelievable low price. Which means BIG losses for them. What Sony is counting on is for the PS2 to continue to sell and bring in some money to make up for PS3 losses. Think about it...There are already over 150 million PS2's out in the world, along with the 100+ million PS1's out there and ? million PSPs. The PS2 outsold every console last year. That means that while 10 million have a 360 and another 7 million have a Wii, 20 million more people have gotten a PS2 (made up estimate on PS2) on top of what has already been sold since launch. So, a lot of people JUST got their PS2 and now have 1000's of games to play before they are ready to move on. Those people will continue to see the "next-gen" push and will eventually follow, but there are tons of old games for them to play until then. Plus, this year is the start of the awesome games line-up that Sony has been building for the past year. Once they see those in action, they may feel they are ready (as long as their wallet agrees). A loss was expected and their profits will return once everyone is ready to move on to next-gen. If they don't come around by next year, then Sony may be in trouble, but that is what they are betting their company on....

Just ouch...

I wonder, what is Sony's next step to avoid more loses?

Seriously, imagine that you are the PS3 leader (Chairman), what will you do?

Jamalnos, well said... And im also tired of the people that bash Sony and then says ''Im no fanboy I own a PS2'' That doesnt mean you can jump over to MS side.. And also manny of my friends and other people says that they will buy a PS3 when the ''good'' games come... So its not over yet

@combat1818; Don't hold back now, none of this sitting on the fence nonsense, tell us what you really think... LOL UK prisons are too soft, make them all like that US prison where they live in tents and wear pink all day... that seems to stop people re-offending.

Good job Sony! :P

I've played an xbox 360 for several months now & I don't see a red ring of death. It works fine & all that PS3 fanboy crap is just that. Crap. If you don't want to see a red ring, then don't put the power cable somewhere where you can trip over it while the 360 is turned on. Use battery UPS to protect it from power outages (a cheap one runs about $30).

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

Team666 "I like pizza... yummy." sandwiches are better and will sell better than pizza

jamalnos nailed it. Having two gorillas like MS and Sony in the same market in a win for all. The systems will get better, cheaper and the consumer will benefit. I've even heard rumours that apple wants to try again, but I think it might be too late, Sony, Nintendo and MS own the current market. The cost of entry would be very high indeed.

I am sure from one thing and it is: PS3 must be always in the battlefield against XBOX 360 because if PS3 got out, XBOX 360 will **** us all of us like chickens in prices and will control the world of games. so the competition must be always exist for more entertainment and more available options for us the consumers.

The PS3 is not a failure, it is simply not the huge overwhelming success that some thought it would be. There are many reasons for that slower start; they include cost, the xbox360 footprint and the wii. When the PS2 came out the market was different. It was really the only game in town. Sony will be ok. /I honestly think the folks at Sony/Microsoft get along better than some on these threads.

I just can not imagine the situation after 3 years.

Maybe if they didn't flood the market with machines no one wants, they'd have an artificial shortage that keeps the demand high... Oh wait... that only works if someone wants one in the first place.

New technology takes a little catching up. The number will be a little different in a year.

jamalnos, that article, which I couldn't read, is a 2005 job. For movies both BR and HD offer a comparible visual experience. They use the same codec, they offer TrueDolby, they use Blue Lasers, they output at 1080p. iHD is finalized, while Java-BR is not, which is why movies from studios like Warner and Paramount come out first in HD-DVD. The HD-DVD standard is better thought out, from a consumer POV, which is why I like it. BR is technically better, but those technical specs offer me nothing. I'm not willing to pay a lot more unless I get a lot more. And again I have no plans to replace my DVDs, the A20 upscales to 720p. Moving forward for HD I only want a few movies on HD; LOTR *might* be one of them. If the movie is not available on HD and I want it I'll get it on DVD and pay less. Recently I have downloaded a few movies from my cable provider in HD (720p and 1080i) and I actually prefer that. I don't wish to invest heavily in any new media which will be outdated in a decade or less. It's cheaper to rent once a year than to buy anyways.

I like pizza... yummy.

Nintendo is the only game company smart enough to post profit year one of a console release.