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Future of Sony Ericsson uncertain

via SPOnG:

"Sony CEO, the 66 year-old Sir Howard Stringer, has told German news outlet Welt Online that he does not expect the R&D cash spent on PS3 to be recouped soon. Asked by the Welt if he could ever see the $3 billion ($1.6b or Euro 2.03b) spent on development of the console, he responded, "Not for as long as I live (laughs). It will certainly take some time."

He was, however, bullish in terms of consumer uptake of the PS3, saying that, "Consumers are purchasing our PlayStation 3 video game consoles faster than we can produce them."

"We currently have a production bottleneck with the PlayStation 3", he continued.

He also confirmed that even with hardware bottlenecking due to demand, "You also know, however, that our business model is not perfect, and that we make a loss on every console we sell."

He was then drawn on one of his company's competitors, Nintendo. Strangely, or with good PR vetting of questions, Microsoft and the Xbox 360 did not merit a mention. "The Wii is a well-made device that has found a new target group. For a while, we held the same target group with the SingStar karaoke game. But perhaps we neglected to pursue that avenue."

"The major difference lies in the fact that Nintendo makes money with the hardware alone, which may be a superior business model. But the Wii is not succeeding at our expense – it is not hurting us. We decided years ago to build a game console that offers much greater functionality. The PlayStation 3 has an enormous processor; it is gradually emerging as the central server in our users' homes."

So, how is Sony making any money from PS3? Quite simple according to the Welshman, "In the meantime, we earn money with the games. We are currently at the stage in which we need to get a grip on the production costs. That takes time. We are already making more money with the games than we are losing with the hardware."

What about a price cut then? Will there be one this year? "I think not", says Sir H enigmatically."

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chasuk083460d ago

"We are already making more money with the games than we are losing with the hardware"

There we go, sony arnt still making a loss

TOO PAWNED3460d ago (Edited 3460d ago )

Yeah but they did loose a lot, 3 billion is really a lot of money. ALso it seems it is going to be harder to recoup that amount of money than I expected, to be honest.
"Asked by the Welt if he could ever see the $3 billion ($1.6b or Euro 2.03b) spent on development of the console, he responded, "Not for as long as I live (laughs). It will certainly take some time."

PirateThom3460d ago

Bare in mind, unlike other PlayStations, the PS3 wasn't being solely funded by SCE, it was a Sony Corp. venture due to blu-ray, which is why Sony are tolerating a $3 billion loss and attributing it to SCE, blu-ray licensing was worth a lot more than $3 billion.

kevin11123460d ago

but you gotta think, all of the ps3's R&D is also R&D for the ps4. I think sony really plans to make cash with the ps4.

Chuck Norris3460d ago

He doesn't plan to live very long then. The PS2 has more than recoup their losses hardware-wise. I still see a price cut coming this fall since MS is doing it also. You need to spend money to make money.

I still don't get as to why they would upgrade the HDDs from 80GB to 160GB. They should just pass the savings off to the consumers and let them choose whether to upgrade the HDD off the shelves instead.

coolfool3460d ago (Edited 3460d ago )

I would much prefer it if they just shipped the 40gb model at a reduced price and then I would have to the option to spend the savings to upgrade the HDD.

Of course the problem with that is that Sony, who obviously have a deal with an HDD manufacturer, wouldn't see the extra profits from this. The may make a loss on the console as a whole but I bet individual components are still making money.

Chuck Norris3460d ago

Even if Sony did have a deal with an HDD manufacturer, they would still take in profits from the 40GB & 80GB HDDs in the first place. Granted that they would most likely earn more profit for selling the 160GB HDDs but that profit will ultimately turn out neglegible if they don't find a way to attract a larger userbase. Selling the 40GB PS3s at a lesser price would benefit them more in the long run. They had a good chance to do it by lowering the price of the 40GB model but they opted to increase the disk space and keep the price instead.

meepmoopmeep3460d ago

that's a shame, i really like Sony Ericsson phones

Luca Blight3460d ago

I have one right now and it's my favorite phone yet

Chuck Norris3460d ago (Edited 3460d ago )

The link you posted is the duplicate. This story was published first using the original source.

SUP3R3460d ago

Thanks for clearing that up Chuck.

kspraydad3460d ago (Edited 3460d ago )

Quote:

But the Wii is not succeeding at our expense – it is not hurting us.

Um...how many PS3s could have been sold if Monster Hunter had not gone to the Wii?

Edit:: Disagree? WTF! What game is 3 of the top 5 selling games on the PSP (a SONY product)? You seriously don't think it would have pushed PS3 sales? When it launches for the Wii in Japan it is going to explode ... and those are lost sales to SONY.

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