PS3 to make or break Sony forevermore

August 2nd, 2006, 17:18 Posted By: wraggster

More recycled analysis brought to you by Bloomberg. A key point to keep in mind: Sony predicts a 5-year recoup for losses due to the PS3's manufacturing costs and price point. That's going to hurt, especially since the average console life is around five years (a few exceptions noted). Masafumi Oshiden, from Merrill-Lynch, said "PlayStation 3 will be a huge money loser in the beginning." Spoken adequately enough. It's true -- we all know it's going to be very hard for Sony. Estimates show that about 200 billion yen was invested into the development of the cell processor alone.

Another point to keep in mind is the notion that "Sony's PlayStation 3 introduction in November may be hampered by fewer and less-powerful games because the company hasn't given final technical details of the new console, according to video-game publishers." So, is delivering 10,000 dev kits not going to cut it? Will IBM be able to pull better yields for the cell processor in time for the PS3 launch? If not, Sony won't even have the chance to recoup in five years -- they may pull the plug sooner than that, unless we give them our support.

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