PlayStation 3 may become profitable - Sony

PS3 News | Cheaper components propelling manufacturer 'to the positive side'.

At the Consumer Electrics Show in Los Vegas, Chief Executive of Sony Computer Entertainment Kaz Hirai has spoken of turning the flailing PlayStation 3 into a profitable venture, reports Reuters.

Sony currently sells all PlayStation 3 consoles below cost price - the amount of money it takes to source parts and assemble the entertainment device - and in the first half of this fiscal year Sony Computer Entertainment made a net loss of over a billion US dollars, including all money made back on PS2, PSP and game sales. However, now that PS3 components are falling in price, Sony may finally be able to turn a profit. "We want to get to the positive side of the equation as quickly as possible," Hirai stated from the sidelines of a CES media conference.

"Component costs are coming down, and the number of components...we are seeing a reduction. The 40 gigabyte PlayStation 3 obviously has fewer components (than more powerful models), and uses less power, which means that components required to dissipate heat, for example, can be smaller, so there is some cost reduction there...So costs are coming down significantly," he explained.

Hirai is hopeful that Sony Computer Entertainment will experience a financial resurgence in 2008. "The next fiscal year starts in April and if we can try to achieve [a profit] in the next fiscal year that would be a great thing. We are going through the budgets right now. That is not a definite commitment, but that is what I would like to try to shoot for," he added.

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9 Comments

5 years ago

Wow that would be a neat trick.

I guess that assumes PS3 sales does not require any further stimulants. Maybe if Xbox 360 was repositioned with some price cuts that might make life unpleasant again.

littlemo

5 years ago

I'm still amazed at the size of the losses they're taking on the PS3. I would have thought PS2 game sales would have been able to offset PS3 hardware losses.

Jedi.Jell

5 years ago

Kaz Hirai wrote

Hirai is hopeful that Sony Computer Entertainment will experience a financial resurgence in 2008. "The next fiscal year starts in April and if we can try to achieve [a profit] in the next fiscal year that would be a great thing. We are going through the budgets right now. That is not a definite commitment, but that is what I would like to try to shoot for," he added.

Well obviously, all business shoots to make a profit.

Totally a nothing statement by Hirai... again.

renegadesx

5 years ago

Quote

which means that components required to dissipate heat, for example, can be smaller

Is anybody else worried about this particular statement? If they are not extremely careful it could end up like the 360's RRoD

littlemo

5 years ago

renegadesx wrote

Quote

which means that components required to dissipate heat, for example, can be smaller

Is anybody else worried about this particular statement? If they are not extremely careful it could end up like the 360's RRoD

Nothing to worry about here because of what he said immediately prior "...and uses less power..." less power = smaller cooling components, unlike MS which didn't have big enough/correct components to start with.

Ken_Gooner

5 years ago

does this mean that there could be a price cut for the ps3?

Capoeira

5 years ago

Ken_Gooner wrote

does this mean that there could be a price cut for the ps3?

My bet is no, at least not in the foreseeable future. Sony would want to reap the benefits of a profitable production period before nullifying that with a price drop.

As to whether Hirai is only trying to paint a pretty picture with this announcement rather than give an accurate account... well that ones up to the cynics. Oh wait, that's me! He's full of sh!t etc...

EDIT:

Oops.

DancesInUnderwear

5 years ago

Capoeira wrote

As to whether Karai is only trying to paint a pretty picture with this announcement rather than give an accurate account...

How to know you've spent too much time on this forum.

Jellyfish

5 years ago

littlemo wrote

renegadesx wrote

Quote

which means that components required to dissipate heat, for example, can be smaller

Is anybody else worried about this particular statement? If they are not extremely careful it could end up like the 360's RRoD

Microsoft are using the correct components, the factories who are contracted to build the consoles are doing it incorrectly. If they bothered to spend a little bit more cash on getting a solder with a higher melting point the majority of the failures would never had happened. Microsoft also should of designed a better cooling subsystem but considering it is their first 'from the ground up' hardware they've done a pretty good job.

Also smaller doesn't actually mean cooler, smaller means higher power efficiency. The will still run at the same temperature, it's just there is not the same amount of surface area to cool. However this doesn't really mean much when you have monstrous chips like the ones in 360 and PS3. This is because they're based off chips that usually require liquid cooling to run above 2.5 GHz...

The reason the Intel chips are now so power efficient is because they are not only smaller, they use different materials in construction. Also they are idling most of the time so bits of the chip shut down and consume little or no power at all. When you're running a game CPU usage is not going idle a lot.

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