Sony CEO Sir Howard Stringer sat down with German based news site Welt Online and said that he doesn’t expect the $3 billion spent on R&D for the PS3 to be recouped by Sony anytime soon. When asked if the company would ever see any of the money that they initially invested in the console, Stringer’s reply was, “Not for as long as I live (laughs). It will certainly take some time.” He then goes onto to state that although the PS3 has been selling well as of late, things aren’t all roses and champagne: “We currently have a production bottleneck with the PlayStation 3. You also know, however, that our business model is not perfect, and that we make a loss on every console we sell.”
Stringer doesn’t elaborate on just how much the PS3 is selling at a loss for, but speculation has put it to about $50-$100 per system. But the PS3 is far from being a liability for Sony. Stringer says that the company continues to earn money with games and those profits from software help to offset the hit they take on the hardware.
He also took some time to talk about Nintendo’s business model and the Wii stating, “The Wii is a well-made device that has found a new target group. For a while, we held the same target group with the SingStar karaoke game. But perhaps we neglected to pursue that avenue. The major difference lies in the fact that Nintendo makes money with the hardware alone, which may be a superior business model. But the Wii is not succeeding at our expense – it is not hurting us. We decided years ago to build a game console that offers much greater functionality.”