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Sony: PS3 Manufacturing Losses Likely To Rise

Following <a href="http://www.gamasutra.com/php-bin/news_index.php?story=10238">news this week</a> from Sony showing better than expected results for the company’s financ...

Jason Dobson, Blogger

July 28, 2006

1 Min Read

Following news this week from Sony showing better than expected results for the company’s financial quarter, despite increased manufacturing costs related to the PS3, the company has confirmed that losses within its flagship games division may mount in the next quarter. According to a report from Reuters, Sony Senior Vice President Takao Yuhara commented that a possible increase in valuation loss on microchips used within the PlayStation 3 could result in even greater losses within the July to September time frame. "We might see valuation losses of a size that we cannot laugh away in the quarter," noted Yuhara. As a result of manufacturing and R&D costs prior to the launch of the PlayStation 3, the Sony's games division saw a 29.1 percent drop in sales and operating revenue from ¥172.8 billion ($1.50bn) to ¥122.5 billion ($1.06bn). Despites this, however, the company as a whole reported an operating profit of ¥ 27.05 billion ($232.5m). Yuhara seemed undaunted, however, and noted to reporters that Sony expects to recoup the PS3-related losses within a five year span, just as it did with the PlayStation 2. The PlayStation 3 is set launch in November, and Sony has iterated that the company plans to ship 6 million units by March. The console will ship with two separate hardware SKUs, the high-end of which will cost $599, and will feature the new, but largely unproven, Blu-ray technology as its optical disc format.

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