Sony made news in August by dropping a full $50 from the pricetag of the PlayStation 3, making the standard 160GB model just $250, and positioning the system as a major competitor for the coming holiday season. This strategy may have backfired however, as though they sold 200,000 additional units as compared to last year, this wasn't enough to compensate for the price drop, with Sony's Consumer Products & Services sector posting an operating loss of $449 million.
Though the PlayStation 3 is not the sole reason for Sony's losses, company executives have cited it as a major factor. That being said, the holiday shopping season has not yet arrived, and these Q2 losses may simply be paving the way for a big upswing in the last four months of the year, as Santa swings by to deliver PS3s by the sleigh-load. Regardless, Sony's shareholders can't be pleased, as last year the same division actually posted profits of $12.5 million. To go from making $12.5 million dollars to losing almost half a billion… we imagine that some heads may be rolling in the Sony world.