Play$tation 3

Recommended Reading: "Report: PS3 to sell for $399, cost $494 to make." Gamespot. 30 Jun. 2005.

Wow, and I thought video gaming systems above $200 was way too over priced (at least for my budget). I don't know what's more ridiculous, the price of the system, or the expected losses that Sony will incur during the first year? Regardless, I've had a relatively low opinion of Sony's game systems over the years, and I hope it gets it's face kicked in by Microsoft's X-Box 360.

It is normal for game companies to take a loss on hardware whenever a new console launches, since they typically focus on acquiring market share rather than generating a profit during the first year. During the second year and afterward, they can recover the losses with the savings that come from mass production and with licensing fees from publishers.

However, Merrill Lynch Japan warns that the normal console business cycle may be disrupted if Microsoft cuts the Xbox 360's price when the PlayStation 3 launches. The report goes on to say that such a move could hurt Sony's plans, bringing an additional loss of 80 billion yen ($730 million) in its second year and 50 billion yen ($457 million) in its third year.

Movie of the Moment: Terminator 3: Rise of the Machines