PS3 launch spurns 68% loss in operating profits for Sony

via: HEXUS.gaming

16th May 2007

Sony Annual Report

The launch of the PS3 has hit the pockets of Sony hard as the company today announced a 68% drop in operating profits for the financial year ending on March 31st.

The annual report states:

"In the Game segment, there was a significant operating loss as a result of the sale of PS3 at strategic price points lower than its production cost during the introductory period."

The loss is due to Sony selling the PS3 at below the cost of manufacturing, but in the area of sales Sony reported a profit rise of 10.5% with a net profit of 2.2%.

Sony aren't surprised at the operating loss and are confident that they'll be able to claw back the cash with the sale of PS3 software, "A significant reduction in operating loss is expected due to rapid reductions in hardware production costs and an enhanced line-up of software titles in the PS3 business," the report states.