Sony Loses $3.3 Billion with PlayStation 3
Sales of Sony’s PlayStation 3 have resulted in losses of $3.3 billion dollars since the system’s launch, reports Forbes.
Key to the company’s losses is the “strategic pricing” initiative it has adopted in an effort to catch up with Microsoft’s Xbox 360, a console which hit shelves almost a year earlier.
Under this scheme, the system is sold to consumers at a loss, though the idea is that software sales and the fruits of being an eventual market leader would counteract these early-term losses.
Sony’s annual report to the Securities and Exchange Commission doesn’t bear the same optimistic outlook on the console’s future that Sony has become known for.
“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,” reads the report.
Further exacerbating this problem is the unexpectedly slow uptake Sony’s console has seen.
While the “strategic pricing” initiative has allowed Sony to make up some of the ground between it and Microsoft, the overwhelming success of the Wii, combined with a distinct lack of exclusive, triple-A games on Sony’s platform have left it in third place in the current sales war. [wired]