After Sony said that they would be cutting jobs in their electronic departments, Katsuhiko Mori, fund manager at Daiwa SB Investments, said in an interview: "Sony doesn't have any core businesses that generate stable profits". But could the Playstation console help Sony?

Even though some people may point out that since the Playstation 3's release in 2006, the console hasn't actually been making a profit, and that is because of the 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 use this tactic every time they have released a console, even though the competition was tough, they did it with the Playstation 3.

Their plan was that if they release a high spec, low priced console that was making them a loss into the market, because it was high spec, the console will last a long time and over the time, make them a profit. But will they come through on top this time? With high pressure price reductions of the Xbox 360, and the new market of the Nintendo Wii, will Sony manage to cope and make enough money to cover their losses?

The dilema is that Sony will not reduce the price of the console until they start making 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 fortunate for Sony that Blu-ray cam out the leaders after the DVD battle. If HD DVD had won the battle, it could of turned out to be even worse for Sony as the Playstation 3 wouldn't have ahd any advantage over the competition.

So, at the moment, it's not looking good for Sony, also, with their release of their new online community, Playstation Home, already being shot down by Microsoft and EA. Both of them have said that Sony's latest attempt at creating an online community is not directed and out of date while moving in no direction.

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.”.

Tom 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 has spent alot of time and money on their new online community, it has just been shot down, personally to me it just seems like an idea of earning money, there are several things within the new 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 that all gamers will hate being spammed with adverts while they walk around.

Overall, it's not looking good for Sony, they are relying on a Playstation 3 that is over priced to the consumer and under priced to the makers. Who knows where Sony will be if their Playstation 3 doesn't start to sell more units.

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