PS3 Has Lost More Money than PS2 Generated at Peak

http://www.gamedaily.com/articles/ne...at-peak/?biz=1

While Sony has already made big strides in 2008 and the company's gaming division did record a profit of about $51 million during its last quarter (April-June) based on stronger sales of PS3 hardware and software, it's no secret that the expensive PS3 has been a loss leader for the company. In 2008, Sony lost $1.16 billion and in 2007 the company lost $2.16 billion, meaning that overall the PS3 investment has cost Sony over $3.3 billion.

What's really surprising, however, is that Sony has already hemorrhaged more cash on the PS3 than it made selling PlayStation 2s during the entire five years of its peak. This comes from industry veteran David Perry, who cited new data from DFC Intelligence during a speech at the Games Convention in Leipzig. Perry, according to 1UP, was talking about how Sony has invested an enormous amount in this console generation and to make the most of it the company will likely extend this cycle as far as it can – even longer than the PS2.

Like most hardware in the typical "razor and blades" business model, Sony did lose money on the PS2 initially as well, but it didn't take long for Sony to streamline the system, make it profitable and then of course the company went on to sell over 120 million units worldwide. If Sony can follow a similar pattern, maybe just maybe they'll be able to breakeven (or even profit) on the massive PS3 investment.

Looks like the consoles software will have to make up for these losses.

Blu-ray.

Sony knows that you have to give away the razors to sell the blades. Keep in mind that this is hardware ONLY, and does not include earnings from game sales and licensing. Just as with any of their consoles in the past, they make their profits in the software.