Hirai hopes PS3 will profit next fiscal year
- Posted January 7th, 2008 at 08:10 EDT by Mike Harradence
- 18 Comments
Sony Computer Entertainment Inc. CEO and President Kazuo Hirai has stated that the firm is hopeful its PlayStation 3 business sector will achieve profitable results during the company’s next fiscal year, commencing April 2008.
"We want to get to the positive side of the equation as quickly as possible," said Hirai, speaking at the Consumer Electronics Show in Las Vegas.
"The next fiscal year starts in April and if we can try to achieve that in the next fiscal year that would be a great thing. We are going through the budgets right now.”
"That (profitability) is not a definite commitment, but that is what I would like to try to shoot for”, he added.
Hirai also observed that production costs for the PS3 are falling by a substantial margin, noting the new 40GB models requires less components than both the 60GB and 80GB machines.
"Component costs are coming down, and the number of components... we are seeing a reduction", he said.
"The 40 GB PlayStation 3 obviously has fewer components, and uses less power, which means that components required to dissipate heat, for example, can be smaller, so there is some cost reduction there."
Sony announced Saturday that the PS3 had sold over 1.2 million units of hardware during the North American holiday season, which can be seen in our earlier story here. Stay tuned for more news from CES 2008 as it breaks.
- 3:12am EST - January 7th, 2008
I guess there goes the hope for another price drop.
- 3:24am EST - January 7th, 2008
theres no need for a price drop...... people need to stop being so cheap.. to get the best u have to pay for the best ..... and if u can't go buy a wii.....
- 3:27am EST - January 7th, 2008
PSN ID VIPER-G1 LOL dont worry M8 there will be a price drop soon
- 3:34am EST - January 7th, 2008
With Ratchit going clunk, MGS4 delayed, Haze delayed, Little Big Planet now an end of year maybe.... and PS3 console sales trailing far far behind Wii on 20 million, Xbox 360 on 18 million users plus 10 million Live subscribers..... there will have to be a price drop. No question.
In addition, Microsoft is a good 6 months ahead with die size reduction and have oodles of cash flexibility. They will drop the price and Sony will be forced to follow anyway.
Right now the best thing Sony could do is (1) Dump Kazuo Hirai. (2) Get Home on line (3) Put back BC and offer an upgrade path with $$ insentives for PS2 users to make the jump. (4) Release titles playable on PS2 but extra content if played on PS3 (5) Purchase the rights to Bioshock 2 as console exclusive (4) Extend all means of support (IP, skills, $) to developers to expedite game development on PS3.
1solidsnake | solid1snake67
- 3:49am EST - January 7th, 2008
i would hope there sales will be up enough so there sales go way down and i hope they try to make a slim ps3. so it's not alot of heat. my friend was over playing games and he acted like he was afraid he break it. i already have a ps3 80 gig. i just hope it does for other gamers. so hideo kojima will sell copies of metal gear solid 4. but, it probably won't need a price drop for that game i love MGS games!!!
- 3:53am EST - January 7th, 2008
The Cleaner.....I am glad you are NOT a CEO of a company. Cause your business will be going to out business in 2 days
- 4:06am EST - January 7th, 2008
Look I have nothing against homosexuals - what people do in their private lives is their own business, but Kaz Hirai spends far too much time prancing about like a queen.
He big notes when there's something he can put spin on, but when times get tough he is no where to be seen. Thats because he doesnt have any experience working.
Sony's CEO; Howard Stringer was attracted to Kaz's connections - namely his father. Stringers brother (Rob Stringer) runs the loss making Sony BMG - thats where Kaz came from. Kaz has only held a "diplomatic" role within Sony for ages - never doing any actual work. He was nothing more than a translator between head office Tokyo and BMG in the U.S. Even his degree is only a Liberal Arts Degree (IE he learnt English) which he did by correspondence - IE: his daddy purchased it for him. Kaz has lived most of his life in New York in his fathers nice apartment...
Sony should dump Kaz now - Jack Tretton is new to the business - yes, but I have no doubt he will take Kaz's job at some point.
@kudoshinchi - Ive been an Exec for 6 years and for the past two own the ABC's on a business which turned over $28 million last calender year with a 9% EBIT. Thats pretty good if I do say so myself!
- 5:19am EST - January 7th, 2008
Like I said in the begining, the cost reductions will avalanche, because once something is cheaper or smaller, it causes the other components to lose their requirement to be larger too etc. His example above was less parts means less cooling needed, so two for one basically.
- 5:31am EST - January 7th, 2008
I just don't agree. As simple as that. I doubt I've seen a better strategy from any company ever than what Sony has done with the PS3. It's ridiculous.
It's obvious you're just TRYING to make it sound like Sony's in a bad position. The 360 hasn't even sold 17 million. They just recently announced that they had just finished SHIPPING 17 million, much less selling that much. So please, get your shlt straight.
- 5:53am EST - January 7th, 2008
*reads "the cleaners" comments*.................. i think im in love ;}
- 6:23am EST - January 7th, 2008
psn id: gingo.....@ The Cleaner.... i laughed hard when i read xbox 360 with 18 mill sales that is clearly BS they stated they had sold 17 mill to retailers like last week so i doubt they have sold 4 or 5 mill in a week to customers
- 7:53am EST - January 7th, 2008
is a joke, what is he doing here if he's such a successful big shot? Besides, even if you were all that, you don't have access to real numbers, real statistics, real projections, real plans, .... that Sony has; or let me guess, you also have an insider at Sony since you are so darn good.
And what is it about Ratchet going clunk, if you didn't like the game that's your own problem, but it's a really good game.
- 9:47am EST - January 7th, 2008
price drop is definitely what the ps3 needs,its wat everyone complains about and bring the silver ps3 out,something new needs to happen to the ps3,the 40GB isnt helping since a lot of people have been dissapointed by it.
- 10:36am EST - January 7th, 2008
@ The Cleaner .... You are absolutely correct Mr. CEO Executive Big SHot big cajone dude. Sony has NO idea what they're doin. Yup. NOne. When they sold 100million PSone's it was just by accident. They had no clue how it happened. Then they when they sold 120 million PS2's that was also an accident. yup. They had no idea how they sold so many consoles. It was just lightning striking twice right? Yah Sony has no clue....... Dood.... They should take your advice becuz you obviously know how to run a successful game console company. Where would Sony be if The Cleaner wasn't around?
- 1:17pm EST - January 7th, 2008
At Microsoft's press conference they announced they had SHIPPED 17.5million world-wide so it does not mean sold to consumers. And isn't the 20 million Wii sold numbers coming from a very unreliable source, vgchartz? If you like taking notice of them why didn't you take note of the 360 sales as according to them, 360 has sold 16million world-wide, 2 million short from what you have said.
For what you said about what Sony should do, 1. Kaz has done a good job, and is well respected in the industry. 2. your right there bit HOME isn't far off. 3. The surge in sales of PS3 thanks to the 40gb model also shows that gamers aren't interested in PS2 B/C. And I'm sure all those still on PS2 you will eventually going to make the leap to PS3 aren't buying a PS3 to play PS2 games on it. 4. Thats a good idea if PS3 was released 3 years ago, there isn't any decent PS2 games coming in 2008 (a bit like the Wii) and really all developers are moving platforms, they don't want to mmake PS2 games and have extra content when played on a PS3 when they want to make the game for PS3 in the first place. 5. That would be good but Sony say they don't pay for exclusives. Bioshock could possibly make it to PS3 anyway meaning that 360 will only have Gears 2 as a major exclusive. So really PS3 doesn't need Bioshock as an exclusive as PS3 already has a few even bigger exclusives for this year.
Don't lie about you being an Exec.
- 1:43pm EST - January 7th, 2008
@ BD_BLACKAZZ I meant for the people that Don't have a PS3. I've bought 4 actually. 2 60GB and 2 80GB. One for me and the rest to family and friends. I meant more along the lines of, if sony focuses more on profitability then affordability the there goes the hope of a price drop for those who don't own the system. Another price drop into the more affordable range at least this year will increase sales tremendiously, in turn making them more profit. Sony will do it in time for those who need it i guess. I am fine with my PS3 and the price i paid regardless.
- 3:47pm EST - January 7th, 2008
@ Lithgow your comment : " I doubt I've seen a better strategy from any company ever than what Sony has done with the PS3 "
- Really ? so share in your opinion exactly how it is genius to have lost the most money whilst shipping less than a third of Nintendo's consoles in the same time frame, or less than half of your nearest rival the Xbox 360?
Where are the publishing support? where are the exclusives we had on PS2 gone? Where are the 360 games promised? Where the feck is Live? Where is the so called amazing titles that cant be done on PC or any other platform?
Kaz is a drop kick, Reeves is a looser - the only guy pulling his weight at SCEA is Jack Tretton. He should be running the show. Im certainly not the only one to have that opinion. Problem is there is a lot of politics involved and Sony is after all a very complicated Japanese company who where reluctant to put Stringer in command without concessions. Kaz is a politition and I think they need to cut out the fat and roll up the sleaves and get the job done.
Bottom line Xbox 360 customer base is.... what 18 million, 17.5), 16 million or even 14 million - who cares? it does not matter as its more than double PS3 either way. Software content - far more is flowing over to Xbox 360 than it is to PS3... That needs to be fixed. They have a serious relationship problem and are miss communicating strategy - even Square Enix & Konami have both said that in the nicest possible way.
Sony's revenue was just $1 Billion, whist MS recorded $3.5 Billion for the December - they cant BS that number because you cant invoice stock not sold... it is illegal. You go to jail for miss representing revenue numbers that have been "booked".
@Mikeghtmare - what are you saying? Only losers, bludgers, people on unemployment or students play games and participate in the video game industry? I never big noted myself, I studied hard and saved my money and Ive work hard. All Im saying is that @kudoshinchi made a remark that was silly. I could have ignored it but thought just for the record, I have an MBA and a Computing Sciences degree and I run a good business that I'm proud of. By the way $28 million revenue is not all that big - $300 million is still regarded Small to Medium Business category.
I worked at Kenfil, Inc (which was the worlds largest software distributor in the mid 90's) before it was acquired by AmeriQuest and broken up and I have held an interest in entertainment software ever since. Instead of spending money to get into video games I got paid to do it.
As for Sony - I was given one of the sample batches of the PSX by Sony Australia and Ive loved Sony's consoles ever since. There is no major titles released in on PSX or PS2 that I dont have. The PS3 in principle is a great console and it should do well but Sony corporate have done a horrid job and the business is in real jeopardy. Im concerned because its like seeing my favourite football team go down the toilet - Thats my opinion.
Finally - "Ratchet going Clunk" is not criticising the game (its fine) but the sales didnt even get to 200K. It fizzled in comparison to other titles in the same category released on other platforms over the same period. ... It failed from a commercial perspective.
- 11:50pm EST - January 7th, 2008
It certainly will be a good year.
As for the price drop, I can't really picture that happening. My girlfriend's 360 just bricked for the second time in 6 months, which to me says MS still can't sort out their console issues.
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