4 Reasons Why Sony Plans to Lose Money On Play Station 3

Sony Corp. will begin selling its Play Station 3 tommorrow. People in Japan are already lined up to buy it.

some 100,000 consoles will be gone in the time it takes to ring them up. Another 400,000 will disappear in moments on Nov 17th when they go on sale in the U.S.

Still, Sony plans on losing about $1.7 billion on the machines through March 2007.

1.  Sony could not make enough of them quickly enoough to meet demand.

2.  Developing games for the highly sophisticated machine is costly, time-consuming and lagging. There are only five games on sale in Japan that are compatible.

3.  Sony lowered the price in Japan by 20% so as to hold or not lose so much market share.

4.  The PS3 already requires a a download to fix a problem.

Mizuho Investors Securities is saying that Sony is not likely to make their forecast of 6 million machines by next March and may need 5-10 years to get their money back.

My bet is that the quality of the machine will win out and Sony will get its money back.

Japanese do not plan to lose money overall…for now, maybe, but not overall.

One reason why Sony will not lose money…Sony is Sony.

What do you think?

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Poor Little Sony Corp.