Recent announcements from Microsoft, Nintendo and Sony have shown the differing costs of launching a console:
Microsoft’s shares rose more than 10% yesterday after their quarterly results announcement showed strong results in the Vista and Office divisions, while sales of Halo 3 pushed the consumer division, which includes the Xbox 360, into profit.
Nintendo announced it has trebled its first-half profit driven by the success of the Wii and the DS and is now the third most valuable company in Japan after car-maker Toyota and financial services giant Mitsubishi UFJ. It surpassed Sony in market value earlier this year.
Sony, in contrast, admitted that PlayStation 3 sales targets of 11 million units might not be met, and that it had lost $848 million in the games unit in Q3 07. They expect to break even in the next six months and make a profit next year.
All of which is tough for Sony. Alongside troubles in its television unit, Sony’s games units is holding it back, with all of the issues of an expensive unit lacking must-have software going into the Christmas season. Nintendo, with a low-priced, low-spec machine, is currently trouncing its opposition and Microsoft is, perhaps surprisingly, emerging into a strong second place.
It’s too early to write Sony off, but amongst all of their corporate woes, turning around the games unit must be a really high priority.