PS3 costs to Sony so far: $3.32 billion

27 June 2008

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Posted by:Josh

Sony has lost $3.32 billion total developing the PS3. So if you think the Playstation 3 is an expensive piece of hardware . . . well think about this: It actually costs Sony more to make it, than the price you buy it at . . . Pricing the PlayStation 3 below its production cost has caused Sony to lose $2.16 billion in 2007 and an additional $1.16 billion in 2008, the company revealed today.

Sony’s fiscal 2008 annual report delineated potential risk factors to its investors, outlining that “the large-scale investment required during the development and introductory period of a new gaming platform may not be fully recovered.” The loss figures were provided as an example of the “significant negative impact” introducing a new platform can cause at first.

“In the past, large-scale investment relating to capital expenditures and research and development for the manufacture of key components, including semiconductors supplied for PlayStation 3 was also recorded within the Electronics segment,” the company said.

In order to stay competitive, said Sony, it had to invest large amounts of money in research and development to introduce the PlayStation 3 into the market, and these sorts of expenditures don’t always get recouped, especially if a platform “fail[s] to achieve such favorable market penetration… resulting in a significant negative impact on Sony’s profitability.”