Will Playstation 3 and Blu-ray Save Sony?

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 can the Playstation 3 console help Sony?

Although some people may point out that since the Playstation 3's release in 2006, the console hasn't actually made a profit, and this is because of the simple fact that Sony are selling the console for less than it costs them to make it. And it's been like that ever since the release in 2006. Sony cut the price in an attempt to break into the market.

Although it may seem odd, but Sony has used this tactic with every console they have released, PS1, PS2 and even though the competition is tougher, they even did it with the PS3.

Their plan was to release a high specification console at a loss which will last for many years, but will make them a profit later on. But will it be successful this time? With the high pressure competition of the Xbox 360 and the new market of Nintendo Wii, will Sony manage to make enough profit 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. However as the consoles price is alot higher than the other consoles on the market, they won't get a huge section of the overall console sales, which, in turn will cause them to loose money for longer.

Although it all sounds a bit down and bleak for Sony, they do have one upside, Blu-ray. It was fortunate for Sony that Blu-ray won 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, and with their release of Playstation Home being criticised by Microsoft and founder of EA, Trip Hawkins. Both of them have said that Sony's attempt at an online community is outdated and not directed.

Senior manager at Xbox 360 game console division, Aaron Greenberg, stated that "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 will hate being spammed with adverts while they walk around.

Overall, it's not looking bright for Sony, they are relying on Playstation 3 sales to increase so that they can make a profit, but as the price is very high, it turns many buyers off, but they won't reduce the price until they make a decent profit. Who knows where Sony will be if their Playstation 3 doesn't start to sell more units.

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