Microsoft buyout of ailing Sony possible

April 9th, 2006, 23:26 Posted By: wraggster

Source - BFR

In a recent interview through a European media outlet, Mr. Fornay Vice president of SCEE (Sony computer entertainment of Europe) made some rather astounding remarks regarding the PS3 price-point and the views being placed upon it. He hastily hinted that a Blu-ray player in the neighborhood of $599.99 would be an absolute steal, but as a stand alone gaming machine would be quite overpriced, as proven in the past. Sony was quick to issue a rebuttal on his behalf stating these were his personal views and not official commenting on the price of the PS3. Damage control at its finest. But keep in mind the massive cover up after Sony’s own CEO Howard Stringer hinted at the PS3's launch delay to Vanity Fair. Sony PR was quick to label it as "pure speculation" coming from the company’s own CEO, which was later to be proven completely accurate when the delay was made official mid-march of 2006. Sony isn’t one for honesty as a company entity however their head honcho's loose lips seem to deliver the only truth passing Sony’s door these days.

If the PS3 is delivered at $599.99 what does this mean for Sony? Historically gaming machines would have never sold for anything north of $299.99 (that was until the Xbox360 moved the line to 399.99 in winter of 2005). Just look at the complete failure of the 1990's powerhouse, the 3DO, at the relatively respectable price of $399.99 (roughly $449.99 inflation adjusted). With the PS3 now touting the largest price tag for any console in the history of gaming and higher then most mid-low end PC's at this point, does this spell disaster for the ailing hardware giant? Sony hasn’t posted net gains in the past three years until 2005 when they posted a depressing $580 million dollar profit after posting loss's in the billions for the last three fiscal years.

The true death blow at this point would really point to the HDCP compliance required for Blu-ray movie playback (as well as HD-DVD), making the PS3 no more then a video game system with a capacity of 50 gig games for anyone who purchased a HDTV in the past 6 years. So were does the PS3's $600.00 price tag come into play for us non-HDCP HDTV owners? The answer is nowhere.

PS3 production pricing at this point has been laid out to be anywhere from $850 - $956 per unit, meaning there will be a loss on each machine of approx $250 - $350 per console sold. If one million consoles sell in the first day of availability Sony will have wiped their entire fiscal gain for all of 2005 in under 24 hours.

Read more at the link above and comment on this article in our forum.

There are 25 comments - Join In and Discuss Here