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Hirai: PlayStation 3 Ops Profitable By March 2009
by Eric Caoili
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July 17, 2008
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Sony Computer Entertainment president and CEO Kazuo Hirai has reaffirmed his belief that overall PlayStation 3 operations are expected to turn profitable by March 2009 - the end of Sony's 2008 fiscal year, according to a report from Japanese wire service Jiji Press.
Hirai first told the Associated Press in December 2007 that his goal as CEO was to help Sony's game division "escape as soon as possible from the red and return to the black in fiscal year 2008."
Sony Corporation chairman and CEO Howard Stringer’s also recently promised at an annual shareholder meeting that restoring profitability to the company’s television and video games business is his top management priority.
Sony’s video games unit has lost $3.4 billion in the last two years, and its television business saw losses of $678 million in the last year. Profits have been hit especially hard due to the strong yen and weak dollar, with overall net income for group forecast to fall by 22 percent to ¥290 billion this year.
Earlier this year, analyst comments in a Business Week article suggested that Sony has been able to halve the cost of the PlayStation 3’s expensive production since the console’s launch in 2006 from around $800 to $400, primarily due to a reduction in the number of parts used. Hirai supported that argument, noting that parts procurement costs have also been falling.
He went on to say that it would be difficult to achieve profitability from the console alone by the end of the fiscal year, but overall PS3 operations, including both hardware and software, are expected to bring the video games unit into the black.
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