Sony: Losses on PS4 Will Be Less than on PS3
UPDATE: The headline of this article has been updated to more accurately reflect the content of the cited quotation.
Sony does not expect to incur losses on the PlayStation 4 at the same level it did with the PlayStation 3.
Speaking in an interview with Bloomberg, Sony Computer Entertainment CEO Andrew House said that the company “will not generate anything like the losses we did for the PlayStation 3.”
According to the Bloomberg report, Sony lost more than $3.5 billion in 2007 and 2008 as the machine suffered from poor sales. CEO Kaz Hirai has said the PlayStation 3 didn’t turn profitable until late 2011.
For the PS4, Sony aims to avoid losses in part due to a smaller investment in the PS4 relative to the PS3, CFO Masaru Kato has said in a recent earnings call.
Kato said Sony spent “hundreds of millions” in designing the PS3′s chip set and “billions” on semiconductor fabrication because these technologies were not readily available.
“There were no manufacturing capacity or technology to manufacture these chipsets. So the amount of investment that went into PS3 was quite big,” Kato said.
In contrast, the PS4 is a much “lighter” platform in terms of investment due to its X86, PC-like architecture.
“At the core, we are taking off-the-shelf technology available and we are putting our proprietary technology around that core chipset,” Kato said. “The amount of investment is much, much smaller. I cannot give you the absolute amount.”
Sony’s PlayStation 4 is expected to launch this holiday season for $399, $100 less than its Microsoft counterpart.