The last six months have been tough for Sony and even tougher for the company's gaming division. In posting its annual financials at the end of March, the company reported an operating loss in that area of nearly US$2 billion. Sony's financial report stated that the red ink was "the result of loss arising from the sale of PS3s at strategic price points lower than its production cost”¦as well as the recording of other charges in association with preparation for the launch of the PS3 platform".
Consumer-research company NPD Group reported that sales of the PS3 console in Canada were 6,500 in May. In the same period, Nintendo Canada sold 37,300 Wiis, Sony Canada sold 18,200 PS2s, and Microsoft Canada moved 12,300 Xbox 360s.
Making matters worse, in recent weeks Sony Computer Entertainment's European and American divisions announced layoffs.
If it seems like Sony's gaming division has been taking a kicking lately, that's because it has. Industry observers have been waiting for the company to announce a price cut for the PS3 to quiet retailers and gamers complaining that the sticker price is too high. The suggested retail price for the 60-gigabyte hard-drive model is $659, although most retailers have the hardware listed at $699. Matt Levitan, marketing and public-relations manager for PlayStation Canada, says the company has no comment on a possible price drop.
"I don't know if there's an urgency for a price drop as much as some of the analysts are saying," Levitan told the Straight in an interview at a Vancouver hotel. "I think it's [sales are] a question of content more than anything else."
But in a video segment recorded for the Financial Times's FT.com, Sir Howard Stringer, chairman and CEO of Sony Corp., said that his company is studying what to do about the price of the PS3 and suggested that an answer to the question will be established by Christmas.
Despite the price, Levitan said, the PS3 is selling better than the Xbox 360 was at the same time in its life cycle. And the Wii?
"The Wii is very different than the PS3," said Levitan. "We've always said, 'Good for Nintendo for trying something different.' They're not interested in next-gen, and it appears they aren't really interested in an on-line strategy either. If they can do well at $279 with their franchises, that's something they can be proud about. But that's not the direction we're going."
Stringer was similarly congratulatory in his interview with FT.com, saying, "I would be the first to say to you that Nintendo Wii has been a successful enterprise and a very good business model compared to ours, because it's cheaper."
"They are both video-game consoles," Levitan admitted, "and I'd be a fool to say that people aren't going to look at them both and say, 'One is outselling the other x to 1,' but that being said, we really took a chance with the PS3, we made a serious investment in what the hardware does, and we're asking consumers to make an investment in a long life cycle, too."
Levitan cited a number of upcoming titles that are exclusive to the PS3–Sony's own Lair and Heavenly Sword, and highly anticipated games such as Metal Gear Solid 4 and Uncharted–as causes for optimism.
"I don't think we're off track. We look at this as a much longer race than other people do. It's easy for people to look at the first five or six months of any race and think that it's over, when it's really far from being over. We're in this for the long haul."