Is The Playstation 3 A Savior?

After Sony said that they would be cutting jobs in their electronic departments, Katsuhiko Mori, fund manager at Daiwa SB Investments, said in an interview: "Sony doesn't have any core businesses that generate stable profits". But will the Playstation 3 save Sony?

Even though, some people may point out that ever since the Playstation 3 release in 2006, the console hasn't been making a profit. This is because of the simple fact that Sony are selling the consoles for less than it costs to make them. And it has been like that since the consoles release. Sony reduced the price below manufacturing costs on purpose so that they could attempt to break into the market.

However, it may seem odd, but Sony has done this with every console that they have released, the Playstation 1, Playstation 2 and even though the competition this time is incredibly tough, they are doing it with the Playstation 3.

Their plan is that they release a high spec console at a loss which will last for many years and eventually turn them in a profit. But will it be successful this time? With high pressure price reductions of the Xbox 360, and the new market of the Nintendo Wii, will Sony manage to cope and make enough money to cover their losses?

The problem is that the price of the Playstation 3 will not start going down until Sony begin to make a decent profit. But as the consoles prices is alot higher than the competition, they won't get a huge proportion of the console sales, which, in turn will cause them to lose money for longer.

Although it sounds a bit rough for Sony at the moment, they do have one advantage, Blu-ray. It was fortunate for Sony that Blu-ray cam out the leaders after the DVD battle. If HD DVD had won the battle, it could of turned out to be even worse for Sony as the Playstation 3 wouldn't have ahd any advantage over the competition.

So, currently, it's not looking good for Sony, also, with their release of Playstation Home, their new online 3D community, which is already being shot down by Microsoft and EA. Both of them have said that Sony's attempt at an online community is outdated and not directed.

Aaron Greenberg, a manager at Xbox 360 game console division, stated: "When they unveiled it, it seemed innovative. I think what’s happened is now here we are a couple of years later and we feel beyond that. It feels like 2005 tech in 2008.”.

Hawkins said: "I can't tell if they're going towards this mass market idea…or if they’re being lured into essentially trying to compete with Warcraft or Second Life”.

After Sony has spent alot of time and money on their new online community, it has just been shot down, personally to me it just seems like an idea of earning money, there are several things within the new world that requires money to buy, and they also have sections of the world which are sponsored by different companies like Red Bull. I'm sure that all gamers don't want to have to walk around while being spammed with adverts.

Overall, it's not looking good for Sony, they are relying on a Playstation 3 that is over priced to the consumer and under priced to the makers. Who knows where Sony will be if their console doesn't sell more.

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