Sony's Achilles Heel Is The PS3


	Sony's Achilles Heel Is The PS3

David M Ewalt

10-25-2007 2:16 PM

719 views

tags:

sony, playstation 3, blu-ray, hddvd

David M Ewalt says:

The dismal performance of the PS3 gaming console continues to hurt Sony. This is the company which far and away had the #1 device during the last generation of video game consoles --and now they're in a distant #3. The picture gets even worse when you consider how Sony counted on the PS3 getting Blu-Ray players into homes and helping that format win the high-def DVD war. Now, with so few PS3's in homes, the company's home entertainment strategy is pretty much broken.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/9c79583f-eec3-4952-9770-165b113f38fd/8B52B4E0-AFFD-47B9-8C0C-386DB22B622B/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.alleyinsider.com/2007/10/sonys-achilles-heel-the-ps3.html" href="http://www.alleyinsider.com/2007/10/sonys-achilles-heel-the-ps3.html" style="font-size: 11px;">www.alleyinsider.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.alleyinsider.com/2007/10/sonys-achilles-heel-the-ps3.html"><DIV>
<IMG width="125" height="156" src="http://www.alleyinsider.com/images/howard-stringer.jpg" alt="howard-stringer.jpg" />Howard Stringer's lengthy, difficult restructuring of Sony looks like it's working: <A href="http://www.sony.net/SonyInfo/IR/financial/fr/index.html">Q2 sales were up 12%</A>, to $18.1 billion; the company netted $641 million. Consumers are snapping up Sony's cameras, PCs, and to a lesser extent, its high-end Bravia TVs.</DIV></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.alleyinsider.com/2007/10/sonys-achilles-heel-the-ps3.html"><DIV>The problem: Sony's videogame business, which was supposed to be the company's standard bearer as it moves forward, is falling behind. Response to its new PS3 game unit, released late last year, has been underwhelming, forcing the company to slash prices throughout the summer and fall. In the U.S. where the consoles were originally sold for $499 and $699, Sony has knocked down prices to $399 and $599; it made similar cuts in Europe and Japan.</DIV></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.alleyinsider.com/2007/10/sonys-achilles-heel-the-ps3.html"><DIV>That means that even though game sales increased more than 40%, to $2.1 billion, the game unit's operating loss more than doubled to $841 million, as Sony increased the loss on each machine sold, and wrote down the value of its inventory.</DIV></blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/8B52B4E0-AFFD-47B9-8C0C-386DB22B622B/blog/" title="blog or email this clip"><img src="http://content6.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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