PS4 Won’t Hit Sony Hard.

NewsV1

As one would expect it costs big bucks to create and launch a new console, but in the case of the Playstation 3 many felt too much money had been invested in creating the machine, meaning a very long time before Sony saw any profit. Sony chief financial officer Masaru Kato seems to agree and claims the Playstation 4 won’t repeat the past.
“One thing I can say for the new platform, PS4, how it is different from past platforms, is that the amount of investment that goes into the basic architecture components [for the] hardware device is much lighter than the past platform. To be a little more specific, when we launched PS3, initially we had a negative margin on each unit that we sold which was quite big. It did come down over time as we reduced the cost of the console, however the initial investment was quite big due to the fact that we had to design the Cell chipset from scratch which cost a lot of money, hundreds of millions of dollars.” Mr. Kato continued.
“In addition to that, we had to invest money developing the silicon conductor fabrication technology, as well as the capital expenditures for producing the chipset. All of these amounted to billions of dollars of investment for the platform which had to be recouped as we sold software and hardware. Compared to that business model, PS4 utilises a core chipset. Yes, we have designed it with our own technology, but the core of the CPU is something that’s available ready, so we’re not designing the chipset from the ground up. In addition to that, for semiconductor processor technology and fabrication process technology we are relying on outside sources. For production capacity, also we are relying on outside sources, which means that we don’t spend our own money to get the chipset ready. That, I think, is the fundamental difference in the business model this time and the reason for us not taking a big hit in the initial year of the introduction of the PS4.”

PS4

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