Filing: PlayStation 3 Cost Sony $3.3 Billion In Losses

According to an annual filing with the U.S. Securities and Exchange Commission (SEC), first reported by Forbes.com, the PlayStation 3 has cost Sony a total of $3.3 billion since launch. The losses were primarily due to the high cost of manufacture of the console, which originally had to be sold at a loss. Subsequent refinements of the console’s components and manufacturing process, and increases in software sales, have begun to move the format into profit, but the company admits that it may take some time to recoup all of its investments, if it will at all. “Even if the platform is ultimately successful, it may take longer than expected to recoup the investment, resulting in a negative impact on Sony’s profitability," states the filing. The cost-of-sales to sales ratio decreased from 102.8 percent in the previous fiscal year to 93.9 percent. The ratio of selling, general and administrative expenses to sales decreased from 20.0 percent in the previous year to 15.8 percent - mainly due to decreased advertising and marketing expenses. Operating losses for the PlayStation 3 in 2007 were ¥232.3 billion ($2.15bn), but narrowed to ¥124.5 billion in 2008 ($1.15bn). However, sales for the company’s game division during the last fiscal year, ended March 31st, increased by 26.3 percent to ¥1.28 trillion ($11.9bn). A total of 9.24 million units of the PlayStation 3 console were sold during the last fiscal year, with 13.89 units of the PSP and 13.73 million units of the PlayStation 2 sold. Software sales for the PlayStation 3 increased from 44.6 million to 57.9 million units, with the PSP on 55.5 million units and the PlayStation 2 at 13.73 million units.