Ex Sony CEO Says Sony Was Losing Money on PS3 Even at $600
When Sony released PlayStation 3 back in 2006, its technology and features were widely appreciated but the price was way too high. However, for Sony, it was still too low as the company was losing money even at $600.
Ultimately, the PS3 did do well in the market but it was years before the console made any profit. Soon after the release of PS3, Jack Tretton, was named the CEO which was “like being made the captain of the Titanic just before it hit the iceberg.”
That period of PS2 to PS3 was the most intense period of my career, at least at Sony. Tremendous success with PS2; I think we had 60-plus, 70-plus percent market share on a worldwide basis. Just the most successful platform in history–and how do you follow that up?
Jack Tretton added:
The easy thing to do [after the PS2], would have been to have done a PlayStation 2.5; something that’s enhanced but kind of staying the course.
PS3 was really stepping out of the box. I think ultimately it delivered a lot of great technology that’s ultimately appreciated today. But at the time, because of the Cell processor and all the proprietary technology, it was difficult to develop for, it was difficult to manufacture; it was extremely expensive to manufacture. So at the price it came out at, everybody knew that wasn’t a consumer-friendly price. Amazingly, that was losing a lot of money for Sony, even at that price
Sony had to fight Xbox 360 that was already available on the market for a year for a much lower price point. According to Jack Tretton, it was the most difficult scenario.
To make matters worse, PS3 was very difficult to develop for and PS3’s designers in Japan did not take any feedback from outside of Japan. PS3’s designers had a very specific idea of how the system should work technically.