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Hirai: New PS3 Represents Return To Roots For PlayStation

Sony Computer Entertainment head Kaz Hirai sees the revamped PlayStation 3 and renewed logo as a mark that PlayStation is "going back to our our roots"; new PS3 hardware sells at a loss.
Sony Computer Entertainment chief Kaz Hirai sees a bright future for PlayStation 3, and with the new revamped hardware, he hopes for a renewed spirit in the former market-leading gaming brand. "We wanted to make sure that we set a new direction for the PS3," he told the UK's Times newspaper. "The PS logo with the capital P and small S has always been our logo, has always been synonymous with video games and I wanted to reset the thinking." He continued, "Also internally I wanted to send the message internally that we are resetting the thinking, going back to our roots. What better way to do it than by resetting the logo? That puts the entire organization on its toes. On a practical level, when you have PlayStation 3 spelled out, the aspect ratio was such that if you wanted it on a billboard it became tiny. It didn't work in terms of visibility." Hirai also said that the new $299 PS3 hardware will still be sold at a loss, continuing the "razor and razorblades" business model in which hardware is sold for a loss, while the money is made on software. "If you're just talking about the hardware alone, the quick answer is yes," he said when asked if Sony takes a hit on the new hardware. "That makes good headlines, but I don't actually know that that's the true nature of the business that we're all in, whether it's PlayStation, Xbox or the Wii." "I think the better indicator is to look at the business as a whole platform, to ask: are you profitable in terms of the hardware, software and peripherals. And the answer to that question is yes on a gross profit level since the last fiscal year." Hirai also expressed no regrets in packing so much technology into the PS3. The inclusion of Blu-ray ultimately led to the high cost of the console at launch, causing problems for the PS3 in the face of cheaper rivals. "Had we done less, I think we'd have gotten into a situation where, especially with the way technology ramps up, it would have been very difficult for us to embark on a 10-year life cycle with this particular console," Hirai said. He added that PS3 installed base growth is "slower than the PS2 was but it's pretty much on track with the growth that we had with the original PlayStation." Sony still manages to sell a surprising amount of PS2s, despite the fact that the console is nearly a decade old. The PS2 has sold 138 million units to date. The original PlayStation sold 102 million units.

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