Sony's game division is losing a lot of money.
The company's game unit saw operating losses more than double last quarter, going from $378 million last Q to $841 million this Q.
Sony said the losses are "due to the loss arising from the strategic pricing of [the PlayStation 3] at points lower than its production costs and PS3-related inventory write-downs." Ouch. So, basically, Sony loses money on each PlayStation 3 then sell, and also loses money when not enough PS3s sell. Ouch, again.
Seemingly, the idea of taking a loss on each console sold and making up the money on the back-end when developers pay for rights to develop for the system isn't working so well at the moment, although, we'll know a lot more after this holiday season, when an assesment can be made on the effect of the PS3 price cut on sales. It's a roller coaster, eh?
As a whole, though, Sony is doing just fine: The three months ending September 30 saw the electronic giant beating analysts expectation with an operating profit of $787 million, up from a $180 Million loss the year before.
The company's game unit saw operating losses more than double last quarter, going from $378 million last Q to $841 million this Q.
Sony said the losses are "due to the loss arising from the strategic pricing of [the PlayStation 3] at points lower than its production costs and PS3-related inventory write-downs." Ouch. So, basically, Sony loses money on each PlayStation 3 then sell, and also loses money when not enough PS3s sell. Ouch, again.
Seemingly, the idea of taking a loss on each console sold and making up the money on the back-end when developers pay for rights to develop for the system isn't working so well at the moment, although, we'll know a lot more after this holiday season, when an assesment can be made on the effect of the PS3 price cut on sales. It's a roller coaster, eh?
As a whole, though, Sony is doing just fine: The three months ending September 30 saw the electronic giant beating analysts expectation with an operating profit of $787 million, up from a $180 Million loss the year before.