(A painful first post)

Umm...that's not a good sign is it?

I know Microsoft makes no profit on their 360, but this is a bit severe.

i think i just shat myself ...i do think itll be an uphill challenge but not a freaking rockslide

ahh crap! this really doesn't sound good.  someone please convince me that my PS3 will still be around in a couple of years...at least it has Blu-Ray!! That'll last for a while

com' on, we all knew Sony was loosing money in all console sales and with price drops what did you expected?
Besides, Sony is setting itself for the future to be on top in the home-movie industry (blu-ray) and in the gaming industry with the PS3.  Some sacrifices must be made for a better future.

developing so many exclusive tittles isnt cheap and they will start making money when people start buyinh games and the big budget games come out, to think some of the ps3 games been developed for 2 years (think paying 200 people and their equipment and help for 2 years?) and thats just one dev there is so many other things believe me this number is for me suprisingly low as one game for ps3 cost minimum 20mill $ and thats just 3party games i think that kz2 costed 40mill thats just one u can do the math people, the big question is will kz2 and such games make back more for SCE? i think so i think it will gain many times more then that and thats why we just gotta chill and let them do w/e

If I am not mistaken Sony lost over 1 billion the first year the PS2 was released. Losses of this nature for the release of the PS3 make absolute sense. Between the cost of manufacturing the PS3, the advertising and most importantly the sheer amount of HIGH BUDGET first party games and software development going on concurrently I expected them to post huge losses. I mean seriously has anybody thought about the production quality of the 1st party games this year and next year?

You can assume that each high production game is between 15 and 25 million to make.

Sony is a loss leader. They know what they are doing and chances are they saw this coming. The comments that reflect doom are way premature. And I am even curious if they are also forcasting projected sales as well. If they are not there is a huge chance they wont lose that much money.

@ Untildeath89

The last bit of info I received was that the KZ2 budget is slightly higher than 25 million not including advertisement. Where did you get the 45 mill number from?

This was expected, they saw the same with PS2 when they were making losses early on in its life. Sony will recoupe their losses with the Cell plant sale.

Hey thats really not that bad. If you compare it to M$'s gaming division which lost $1.95 BILLION USD this year, (which is equivilant to 222,319,500,000 JPY!) this is a drop in the bucket ;P

Yea but people don't know that, REPORTING DOUBLE LOSS means SELLING DOUBLE THE CONSOLES.

So SONY expects to have DOUBLE THE CONSOLES OUT. I said it since Day one of the PS3, that PS3 is going to be on top again, it's all these website Fa**0ts that think otherwise for people to visit their website. Because if there wasn't a console "war" people wouldn't visit as much, as i only visit to find out about video games for the PS3 like UNCHARTED and HAZE and ASSASSINS CREED

In some way it's kindda good, i mean, if Sony loses money on each console sold, then, the more money lost, the more consoles sold, right? And at some point, they will start MAKING money on each console sold + software!! And the more consoles out there, the more software should be sold.

i think i seen it somewhere when there was article about that the game was the biggest entertainment budget project in nl i think

edit: maybe im mixing up euro/us dunno really

all start up costs for any product is going to massively exceed the profits at least for the first year. To think that such a brand like playstation is going to go broke is ridiculous. it probably has the highest level of consumer lloyalty than any other products in alot of different markets.

@Staticneuron

killzone budget is 40,000,000$!! i also so it every where some months ago!!

first it was 20 million then they raise it to 40 million!!! google it again if u want to make sure!

on topic!! it normal that they loose so many money for making console in the first year or 2!! they will gain more from the software!

Sony is very smart, they are taking losses now, to make huge money later. If they do secure blu-ray as the winner, they have a very stong hold on the market already. Plus like the CEO said at the begining of the year. Sony for the first time in history is starting to look at the entire company as a whole instead of letting each division run itself. This allows them to support one division with another. This means that loosing money in the game section boosts sales in the HD TV section, the Blu-Ray sales section, the Sony Movie studios section, ect. Sony just looks at the bigger picture!!!!

Sony is very smart, they are taking losses now, to make huge money later. If they do secure blu-ray as the winner, they have a very stong hold on the market already. Plus like the CEO said at the begining of the year. Sony for the first time in history is starting to look at the entire company as a whole instead of letting each division run itself. This allows them to support one division with another. This means that loosing money in the game section boosts sales in the HD TV section, the Blu-Ray sales section, the Sony Movie studios section, ect. Sony just looks at the bigger picture!!!!

i like sony!!

and they are not charging for playing online! unlike others

Interesting.

.....:(

Yea ppl plz dont take this as a sign of weakness Sony invested huge amounts of money for this technology that should prove to be around a 10 year investment. MS on the other hand have barely invested anything into their console making it obsolete in 2-3 years.  I predict sony is just patiently waiting for their time to shine again and all the 360 fanboys will be drinking vinegar and come back to playstation.

psn id: gingo.... sony will eventually start making money on their games but at least they have their phones, cameras and tv's to keep them going in the meantime

when the games come the money will come!

You gotta spend money to make money

{<-(       <--- Frown over time will =     {:-D

Sony will pull out of it!

Awesome news!! This just means they're selling a lot of PS3s,  that's all. Not like that money isn't made up for already. (Spiderman 3 made up it's budget and the operating loss of the games division plus some.)

Free iPod Touch: http://www.YouriPodTouch4free.com/index.php?ref=4072416

oohh well sony will eventualy win cant wait 4 ut3!

I thought they would make more money than this year, due to upcoming strong hardfware sales, and big games, like mgs4, haze, killzone 2, lbp. and so on.

Its going to be losing money on operating costs, thats a given. How that changes in towards the rest of this year and the next remains positive I think. The more games they release, the more they are likely to swing around profits.

Ouch Sony.  I'm sure a lot will be made back by May 08 when most of the big games are released for the PS3.

SONY has made even bigger losses back in the early 90's which saw the whole company (worldwide) in deep trouble. From day 1 in the life of PlayStation, profits were not seen until the second year of it's life cycle. Loss figures sounds like they've increase for each new PS, but each time profits have grown even more! So the great expectation is looking great in the next five years!

Does anyone know if Nintendo is in the Red or Black with their superstar Wii?

If revenue grows by 12% we need to see profit growth more than four times that figure otherwise Sony is churning a lot of capital with no return.

With the recent sale of its financial divisions, the memory business,  the sale of Cell fabrication, spin off of OLED and closure of robotics division - they should have pulled together enough funds for one big run at it next year. Point is - they can get away with one more year before things get very dark. I hope they can get the wheels finaly turning so that they can catch up to at least Xbox if not Wii and start making profit. To do that they need to start outselling Xbox 360 consistantly by a factor of 5 to 1 every month over an eighteen month period. Its a big ask but they need to do it otherwise they are just not going to attract the publishing license fees to break even.

As for Wii - yes they are in the black - so much so that their capitalisation is now almost double of Sony. To buy Nintendo you would pay US$82 Billion, but to buy Sony you need $45 Billion. The real problem is in Sony's yeild. Consider this: Nintendo sells $4.5 Billion worth of product and makes $1.25 Billion profit. Sony has to sell $60 Billion worth of product to make $1.25 Billion profit. Thats where the group has stood for the past three years. If the cost of sales changed because of interest rates, inflation, fuel prices or appreciation of the Yuan or Yen by just 5% then Nintendo's profit would reduce to $900 million (but still yeild about a 40% return & hence the high share price) Sony on the otherhand would collapse into the red by around $3 Billion - this is what the fund managers are scared of. Sony's market cap has fallen from $150 Billion to $45 Billion over the past 7 years  - just a 5% movement in COS would probably see the company split up and sold. It's that close.