Doing everything for itself proved to be rather costly for Sony.
The gaming side of Sony’s business turned a profit this year, but for the last few years, it’s been a different story. Sony is blaming the amount of money the company spent in developing the PS3 for a significant portion of the losses it has suffered, and says that it will not make the same mistake with its next console.
Sony designed and manufactured many of the PS3’s inner workings – including the Cell Processor – itself, spending billions of yen on semiconductor fabrication facilities. This investment had a significant impact on the profitably of the PS3 and the gaming division as a whole, which just as recently as last year made an operating loss of ¥83 billion, or just over $1 billion.
Speaking during an investors briefing, Sony CFO Masaru Kato indicated that when Sony was developing the PS3, seeking outside partners for chip manufacture wasn’t really feasible. However, the situation for the PS4 was different and the idea of investing so much money upfront into the company’s next console was unthinkable.
High manufacturing costs always been something of a bugbear for the PS3. It looks like Sony has finally started to overcome it though, as reduced hardware costs, along with increased software sales, are credited with the ¥35.6 billion, or $438 million, profit posted by the division.