Sony revealed in an annual report Monday that losses stemming from its game segment m♈ounted to more than $3.3 billion over the course of fiscal 2007 and fiscal 2008, but there are signs of improvement.

Sony stated in an annual 20-F regulatory filing that the launch of the PS3 drove game segment losses of $2.15 billion for FY07, ended March 31, 2007 (PS3 had been on the market for only about five months at that point). FY08, which ended March 31 t🔜his year, saw losses of $1.15 billion in the game segment.

Strategic pricing of PS3 hardware drove losses in the segment, as Sony retailed the console at a lower price than the cost of manufacturing. Such a strategy, known as the razor and blades model, has also been used by 澳洲幸运5开奖号码历史查询:Microsoft in order to esta💞b🍬lish a large installed hardware base.

Roy🅠alties on software ꦡideally offset such expenses.

While $3 billion is a hefty number, Sony did reduce losses year-on-year in the games segment, despit♏e selling nearly twice as many consoles (again, at a loss) in FY08 as it did in FY07.

Sony attributed the segment's year-on-year cost reduction ൲of about $1 billion to "💝successful PS3 hardware cost reductions."

The fact that Sony sold 267.4 million software units a♌cross PS3, PS2 and PSP also played a major role in offsettinꦕg hardware costs.

Sony CEO Howard Stringer recently s𝕴aid that restoring profitability to the company's TV and games businesses is a top priority.

Jun 24, 2008