Sony Will Still Lose Money on PS3 Slim, says Hirai

During the recent Gamescom event in Germany, as expected Sony finally lowered the price on PS3 to $299 and announced the sleek, new PS3 Slim model. The reaction from analysts and executives has been quite positive, but the price drop and potential market share gains come at a cost, as Sony Computer Entertainment boss Kaz Hirai has confirmed that Sony will continue to lose money on PS3. 

Speaking to the Times Online, when Hirai was asked about selling each unit at a loss, he responded, "If you're just talking about the hardware alone, the quick answer is yes." Nevertheless, Hirai is confident in the PlayStation business as a whole, and the traditional razor and blades business model. He continued, "That makes good headlines, but I don't actually know that that's the true nature of the business that we're all in, whether it's PlayStation, Xbox or the Wii. I think the better indicator is to look at the business as a whole platform, to ask: are you profitable in terms of the hardware, software and peripherals. And the answer to that question is yes on a gross profit level since the last fiscal year."

Later in the interview Hirai also talks about Sony returning to its roots in video games, which is why they redesigned the PS3 logo. "We wanted to make sure that we set a new direction for the PS3. The PS logo with the capital P and small S has always been our logo, has always been synonymous with video games and I wanted to reset the thinking. Also internally I wanted to send the message internally that we are resetting the thinking, going back to our roots," he said. "What better way to do it than by resetting the logo? That puts the entire organization on its toes. On a practical level, when you have PlayStation 3 spelt out, the aspect ratio was such that if you wanted it on a billboard it became tiny. It didn't work in terms of visibility."