Sony to lose $872 million on PS3

In financial results reporting Sony's annual profits, it was revealed that Sony expects its game division to lose 100 billion Yen ($872 million) in the 2006/07 financial year. This major loss was somewhat expected, although market analysts had projected a loss closer to 175 million Yen. The majority of the loss will come from the ramp-up and launch of the PS3 in November. Sony still has yet to set the pricing of the PS3.

"We believe that we can lower costs dramatically (on the PS3) through chip shrinkage and by cutting the number of parts but there is no way to avoid high costs in the first year," Sony Senior Vice President Takao Yuhara told a news conference.