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Author
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Topic: Sony has lost over $3 billion on the PS3
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Scott Jentsch
Phenomenal Film Handler

Posts: 1061
From: New Berlin, WI, USA
Registered: Apr 2003
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posted 06-30-2008 05:54 PM
I think Sony is playing the long game with the PS3, and it shows with how they are approaching things.
By pricing the console below cost, they are counting on future sales to offset the difference. This is common in the gaming industry, so no big surprise there.
By bundling in the Blu-ray drive, they built in lots of disc capacity for the future, and they tied the success of the PS3 and the success of the Blu-ray format together.
By buying out Warner Bros. and/or Fox to seal the deal against HD DVD, they shut down their biggest current threat to the Blu-ray format. I suspect that Sony has also been subsidizing Blu-ray production costs to encourage movie releases on the format in spite of problematic yields (I don't know if that continues to be an issue or not).
By releasing Bonus View and BD-Live on the PS3 to the point of exclusivity in the market, it makes the PS3 the only choice for the informed public looking for the best Blu-ray experience now and in the future. Those people are now potential buyers of PS3 games, which makes the circle complete.
The long-term view is the right one, so long as the market responds in good enough numbers in the time Sony has to absorb the investments they have made and continue to make in order to achieve success.
As much as I wanted HD DVD to succeed, I have to admit that Sony is doing a lot to make the PS3 and the Blu-ray format a success. It's a big gamble, but if they succeed, it will have paid off.
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