Sony Claims It Won’t Take “The Big Hit” With The PS4, As It Did With The Launch Of Its Predecessor
Sony has claimed that its acquiring of third party technology and better production capabilities with the PlayStation 4 means that it won’t take the “big hit” it suffered when launching the PlayStation 3.
Sony spent a fortune when crafting the PS3’s Cell processor in addition to its own semi conductor. Plus there was that Blu-ray player. Back in 2011, Masaru Kato, the company’s chief financial officer, said that Sony won’t repeat that with the PS4.
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Now, present day, Kato explained, when speaking to analysts during Sony’s earnings call recently, the different approaches to developing the PS4 and its predecessor.
“One thing I can say for the new platform, PS4, how it is different from past platforms, is that the amount of investment that goes into the basic architecture components [for the] hardware device is much lighter than the past platform,” he said.
“To be a little more specific, when we launched PS3, initially we had a negative margin on each unit that we sold which was quite big. It did come down over time as we reduced the cost of the console, however the initial investment was quite big due to the fact that we had to design the Cell chipset from scratch which cost a lot of money, hundreds of millions of dollars.
“In addition to that, we had to invest money developing the silicon conductor fabrication technology, as well as the capital expenditures for producing the chipset. All of these amounted to billions of dollars of investment for the platform which had to be recouped as we sold software and hardware.
“Compared to that business model, PS4 utilises a core chipset. Yes, we have designed it with our own technology, but the core of the CPU is something that’s available ready, so we’re not designing the chipset from the ground up.
“In addition to that, [for] semiconductor processor technology [and] fabrication process technology we are relying on outside sources. [For] production capacity, also we are relying on outside sources, which means that we don’t spend our own money to get the chipset ready. That, I think, is the fundamental difference in the business model this time and the reason for us not taking a big hit in the initial year of the introduction of the PS4.”
Now that it’s the weekend, be sure to read up on all the PS4 news you might have missed.