Unless you're Nintendo, the recession period hasn't been kind to your bottom line. Sony released its fiscal second quarter results, which show a reported a 58.8 billion yen (or $654 million) operating loss from its division responsible for video game hardware and software.
Those who have been tracking Sony's reports since the launch of the PS3 have noticed a trend of losses. Now, launching and supporting a new platform is an expensive endeavor. Typically, hardware is sold at a loss initially to build a user base so that the profits may be reaped from software sales.
Looking at the losses total since the PS3 launch, the branch of Sony has lost nearly $4.7 billion, according to VG247. While that is a lot of money, Microsoft went through a similar sort of thing with the original Xbox, losing $4.2 billion over the console's four-year lifespan.
According to Andriasang, Sony CFO Nobuyuki Oneda said of PlayStation 3 costs, "At present, the difference between sales and materials cost has been reduced to between 10 and 20%. Within the year, it could be in the single digits. We'll be able to reach profitability at some point in the next term."
M$ was doing this to compete, and was on its way up in the console world. Sony is on the back end of this. M$ take was to gain marketshare.
Same as Sony! Sony was doing this to compete for the "Blu-ray" and they won! Though they are/were lossing money from PS3 but they are gaining them back from Blu-ray associated profits.