After Sony announced job cuts for it's electronic division, Katsuhiko Mori, fund manager at Daiwa SB Investments, stated in an interview: "Sony doesn't have any core businesses that generate stable profits". But could the Playstation console help Sony?

Although some people may point this woud that ever since the Playstation 3's release back in 2006, it hasn't been making a profit. And that it because of the rather odd but simple fact that Sony are selling the console for less than it costs to make. And it has been like that since the consoles release. Sony reduced the price below manufacturing costs on purpose so that they could attempt to break into the market.

However, it may seem odd, but Sony has done this will all of their consoles, Playstation 1, Playstation 2 and now the Playstation 3.

Their plan is that they release a high spec console at a loss which will last for many years and eventually turn them in a profit. But will it prove to be successful this time? With the high pressure competition of the Xbox 360 and the new market of Nintendo Wii, will Sony manage to make enough profit to cover their losses?

The problem is that Sony will not reduce the price of the console until they begind to make a decent profit. But as the consoles prices is alot higher than the competition, they won't get a huge proportion of the console sales, which, in turn will cause them to lose money for longer.

Although all that sounds a bit bleak for Sony, there is one upside that they have, Blu-ray. It was lucky for Sony that Blu-ray came out on top of the DVD battle. If HD DVD had won the DVD battle, it would have been even worse for Sony has their console would not have any edge over it's competition.

So, currently, it's not looking good for Sony, and with their release of Playstation Home being criticised by Microsoft and founder of EA, Trip Hawkins. Both of them have said that Sony's attempt at an online community is outdated and not directed.

Aaron Greenberg, a manager at Xbox 360 game console division, stated: "When they unveiled it, it seemed innovative. I think what’s happened is now here we are a couple of years later and we feel beyond that. It feels like 2005 tech in 2008.”.

Hawkins said "I can't tell if they're going towards this mass market idea…or if they’re being lured into essentially trying to compete with Warcraft or Second Life”.

After Sony spent alot of time, money and effort on their new social community, it has just been shot down, personally, it just seems like an idea of earning money, there are several things within the world that requires money to buy, and they also have sections of the world which are sponsored by different companies like Red Bull. I'm sure most gamers will hate the idea of being spammed with adverts as they walk around.

Overall, it's not looking bright for Sony, they are relying on Playstation 3 sales to increase so that they can make a profit, but as the price is very high, it turns many buyers off, but they won't reduce the price until they make a decent profit. Who knows what position Sony will be in if their console doesn't start to sell more units.

Caribbean Holidays and All Inclusive Holidays are perfect for this Winter.

Technorati Tags: EA, Microsoft, playstation 3, Sony, xbox

Tags: EA, Microsoft, playstation 3, Sony, xbox