Jason Liew

Released in Japan on last Saturday, Sony is going to launch its PlayStation 3 in United States on this coming Friday, 17th November. For those Sony PS3 supporters, here is a price list by PSXextreme.

The month of November has been said to be a happening one for gaming industry. Firstly, the long awaited PS 3  is finally coming out to match Xbox 360. The following is the release of Nintendo Wii on 19th November. Also, one of the the hottest racing game collection, Need For Speed,  has released its latest Need For Speed Carbon.

It is an undeniable truth that electronics gaming industry is a lucrative business. For instance, conventional universities and colleges have introduced or increased their video gaming courses dramatically throughout this decade. Even my school, a school specialized in business studies, has started to offer video gaming courses.  However, it is quite worrying if you see the numbers and figures that lie behind those gaming industry giants, such like Sony and Microsoft.

Here is an extract of the latest Microsoft Earning Report,  published in Microsoft 4th quarter FY 2006 Earning Release. It is user friendly, NO specific knowledge in accounting and finance are required, in order to understand this statement.

This is a highlighted explanation for Microsoft’s HUGE losses incurred in gaming industry throughout the last quarter and the full financial year.   

On the other hand, this is an extract of Sony Earning Report provided in  Sony 2nd Quarter FY 2006 Earning Release. Also, it shows significant losses in gaming sector of the Sony corporation.

It has been argued that game consoles such as Play Station 3 and Xbox 360, are aiming to earn in the long run, by reducing production cost through economy of scales, and by increasing sales in gaming software. This claim is shaky, especially for Microsoft Xbox series. It is noteworthy that Microsoft is still selling Xbox first generation at a negative margin, after years of sales and the launch of second generation, Xbox 360. 

Besides that, Sony’s decision to further delay the launch of PS3 in European countries to March 2007, is another controversial and infamous act. It is generally known that, Christmas season shopping is one of the most effective and significant sales throughout a year in western countries. Skeptics are saying that Sony is killing its own PS3, way before it stands a chance to compete with Xbox 360, which was released one year ago, and has already gained a significant market share in the gaming industry of USA. 

Looking at the $414 million and $369 million operating loss, by Microsoft’s Home Entertainment and Sony’s gaming sector, respectively in their last quarter,  I started to feel that gaming industry is no longer just about games. Gaming industry is but a matter of billion dollars business, which when you fail, you can’t press RESTART.

For related previous posts : Sony PS3 Advertisement, Sony Bravia Advertisement,  Counter Strike: Source

Tags: Sony, PlayStation+3, Microsoft, Xbox+360, Nintendo, Wii, Home+Entertainment, Video+Game, Earning+Report, Business, Japan, USA, Need+For+Speed+Carbon, Racing+Game, Shipping+Delay, Price, Game+Console