With E3 coming in May, we have to hope that the Sony PlayStation 3 gaming platform will finally be introduced. We want to know if the PS3 will offer something we cannot resist. We want to know if this PS3 can become so widespread that it will create a segue for introduction of the Blu-ray disc. Microsoft can take a hit if the Toshiba HD-DVD format falls flat on it's face, but can Sony afford to have Blu-ray and the PS3 hit the mat at the same time? Well, that's exactly what this commentator is wondering at eHomeUpgrade:
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The Playstation 3 will lose money for at least a few years. How much and for how long is key, and recent projections from Merrill Lynch Japan suggest that the PS3 could lose a tremendous amount of money for Sony in the first few years. Merrill Lynch is projecting losses of 1.18 billion in year 1, 730 million in year 2 and 457 million in year 3. By comparison, Sony's profits in the past three years has been about 1.86 billion. If the PS3 doesn't start turning a serious profit in year 4, Sony's bank accounts could start drying up. There's no indication if these losses also anticipate the costs involved with setting up the massive infrastructure for an Xbox Live competitor, which most people think Sony will provide. If not, Sony's losses could skyrocket even more as it looks to create a brand-new online presence. Sony could try to offset these losses by launching the PS3 with a higher price point, but anything above $500 is considered too high for wide adoption. Will consumers agree with Ken Kutaragi's assessment that you will want to work an extra job to have one? Kutaragi has even lamented that "…the PS3 can't be offered at a price that's targeted toward households." Additionally, Sony is still having to compete with HD-DVD, which is getting significant backing from Microsoft (and their 37 billion in cash). Whereas Microsoft has little to lose if HD-DVD fails, Sony has everything to lose. Additionally, recent announcements at CES in January indicate that the least expensive Blu-Ray drives will start at $1000 while HD-DVD is hitting the market with players starting at $500. Many analysts saw these changes as giving HD-DVD a second-wind that could ultimately hurt Sony more than it helps HD-DVD, which leads to another point. |
We have noticed already that even a Blu-ray player alone
will not be cheap! At least this thing serves a dual purpose. No matter what, as
the author says, Sony is still going to be around, but these next years are
going to be lean if what the analysts are predicting is true. But more important
than that, is perception by the public. Every company dreams of the killer app,
the must have hardware like the iPod, can this PS3 finally be the device that puts Sony back on the map? The Walkman was so long ago, it is time for a new market leader for Sony.
There are many questions out there and so much is at stake. Right now, it
seems like a guessing game. Meantime though, hard core gamers are snapping up
these Xboxes. This has to be a concern for Sony as time is the enemy now. Let's
hope they come through with that killer platform! Let's keep the competition
going, as this is how we, the consumer, can get the best bang for our buck.
Source: eHomeUpgrade
