The Playstation 3 just reported a hell of year. Sales are up almost 50% over last year, from 4.5 million units to 6.5 million. That’s a huge jump this late in the generation, though according to the Wall Street Journal, the important numbers are on the loss chart.

Sony’s baby is still losing six cents on every dollar of hardware it sells. That’s not as bad as it was at launch – not by a long shot – but it’s bad, again considering where we stand in the lifecycle. The company’s CFO, Nobuyuki Oneda, says he can deliver a 15 percent cost reduction, but not until March of 2011. At that point we could start to hear rumors of the next generation of consoles, not to mention the addition of expensive motion controlling hardware.

As much progress as Sony made this year, it’s a long way from being a profitable division of the corporation as a whole.

Source: Wall Street Journal

The other day, Sony said it would rely on motion control, 3D gaming, and the PlayStation Network to drive sales in 2010. To me, 3D gaming is a pipe dream, at least for the next five years or so, and today I’ve got a little proof.

XpanD, the company that produced the glasses for Avatar has said a pair of their shutter glasses will start at $70 a pair and run up to $150. That’s on top of the premiums you’ll pay for the TV, though some sets will likely ship with glasses included.

For a family of four, you’re looking at about $300 just for the glasses. Granted, your average family of four won’t be gaming in 3D together, but think about having your friends over. The expense of the hardware is going to dictate that you enjoy your 3D games alone, a trend the industry has been moving away from for the last decade.

Until costs come down, there’s no way Sony can expect real revenue from 3D next year. It’s just too expensive.

When you consider the NPD data for 2009, it’s hard to imagine why Sony thinks it will have such a great 2010. John Koller, Sony’s director of hardware marketing, talked with Gamepro about what’s in store for for Sony fans next year, a plan that hopes to stand on the “three big pillars” of motion control, 3D gaming, and the PlayStation Network.

You’ll have to excuse my sarcasm, because I do think Sony has a big year ahead. The biggest its had in a while, anyway. The PS3 Slim is selling like mad and there are some great games out for the system. The only “pillar” I see working in 2010, though, is PSN. Motion gaming already exists on another system, one that is much more family friendly than a console like the PS3. And 3D gaming? That’s a pipe dream for 2010. Hell, I’d call that a pipe dream for 2015. There just won’t be enough 3D TVs to drive any kind of reasonable business for a game system.

That doesn’t keep Koller from claiming that Sony just might hit the “Holy Grail of gaming,” by “placing you as a consumer into the game physically.” I think he’s nuts. Read the full interview at Gamepro.

Sony wants to be the company that leads us all into the three dimensional future, for both gaming and video. During a presentation for investors today, the company laid out its plan for the next few years, which included news that the PS3 is upgradeable to stereoscopic 3D through firmware upgrades.

Sony hopes the 3D gaming and video markets will help return the company to profitability by 2011. That’s a big step for a company set to post $1 billion in losses for the second year in a row. The company plans to install 3,000 3D cinema projectors in movie theaters around the country, along with expanding its 3D support for game developers and offerings to Blu-ray users.

Sony CEO Howard Stringer also made a point to applaud the success of the company’s restructure schedule, which is outperforming the initial plan. Sony aimed to save $5.6 billion dollars, a goal that was obviously helped when it cut 12 percent of its work force and then boomed 70% on PS3 sales. Thank you very much, PS3 Slim.

For now, I think the 3D thing is a gamble. It’s too gimmicky for widespread adaptation, and I don’t think it will have nearly the impact on gaming that motion control has had. Also, I’m not sure how 3,000 cinema installs can possibly help a return to profitability, but then, I guess I haven’t seen the numbers for 3D cinema audiences. I’ve seen the others, though, and they’re all over the place – not exactly the industry I’d bet on at the moment.

Source: Associated Press

Usually when a console debuts you can expect prices to remain stable for a while. The hype of the console sells it, usually at just about any price. The PSP Go, on the other hand, is already on sale at Fry’s for $199.

The price drop confirms that profit margins must be pretty wide on Sony’s new portable. Not too many people are buy the thing, and there isn’t exactly the same expected software revenue as other portables, so taking a loss really doesn’t make sense. With so few purchasers, it seems like Fry’s is just trying to be the only retailer to sell out of the device before the holiday season hits.

The deal is only good in-store until the 22nd, and may not be available everywhere so be sure to call ahead.

During a conference call, Sony corporate CEO Nobuyuki Oneda said the PS3 is now some 70% cheaper to make than it was at launch. Most estimates suggest the PS3 was around $800 to build in the beginning, which puts the console at just $240 now.

The obvious question – does this mean we’ll see price cuts some time soon? I’m inclined to say no, since Sony seems to be losing money everywhere, but that might be a great way to get a leg up on the Xbox 360. Sure, no one likes to be losing money on hardware this far into the product cycle, but imagine getting a PS3 for $250! I’d probably go buy one tomorrow out of pure disbelief, especially if it came with a decent hard drive. Microsoft’s cheapest console is so pared down I couldn’t really justify buying one.

Sony could keep prices where they are to try to recoup some of their recent losses, but why let the world know the price has gone down so far? So we know how much is headed straight to Nobuyuki Oneda’s bonus check?

We already know the PSP Go is a ripoff. It’s essentially a minor upgrade over the current hardware at a premium price. In the UK things are even worse. Our friends across the pond are looking at prices as high as £230 (approx. $380), which is nearly double the price of the current generation mobile gamer.

Whether it’s the price, the hardware, or just an utter lack of interest, UK retailers are showing zero, yes, zero pre-orders, and they’re not happy. The problem comes with the margins on hardware retail, which are historically small. Now that the PSP no longer supports UMD drives, the only justifiable revenue stream comes in the form of Playstation Network cards, which can be purchased in $20 and $50 increments in the US, but remain unavailable in the UK.

Sony’s banking on mobile software delivery for games instead of your typical physical media with the PSP Go, and it’s already got retailers wondering if they should bother with the new device. Seems like a lot of people share that sentiment where Sony is concerned. Will they listen, or just continue to frustrate retailers and developers out of doing business together?

When you’ve taken a company from $10 million yearly revenues to nearly $200 million quarterly revenues, you can pretty much say what you want. If your new company also happens to be worth some $16 billion, you can also say those things to whomever you like, even if it happens to be Sony.

That’s exactly what’s happening between Bobby Kotick, Activision Blizzard’s President and CEO (that would be the $16 billion company), and Sony. Kotick has apparently been frustrated with the fees Sony charges for what he thinks may be a dying platform.

“I’m getting concerned about Sony; the PlayStation 3 is losing a bit of momentum and they don’t make it easy for me to support the platform. It’s expensive to develop for the console, and the Wii and the Xbox are just selling better. Games generate a better return on invested capital on the Xbox than on the PlayStation,” Kotick says. “When we look at 2010 and 2011, we might want to consider if we support [PS3 and PSP].”

For those of you keeping track at home, that’s next year. As in, six months from now. And if Activision sees fit to pull the plug, who’s next? Other developers have voiced issue with Sony licensing fees and the difficulties of developing on their hardware. Would EA see fit to cut ties?

As compelling a case as Kotick might put together, he seems a bit blind when it comes to ideas for saving Sony. In this same interview, Mr. Kotick suggests Sony consider things like the upcoming skateboard controller for a new Tony Hawk title. Are peripherals really what’s slowing the company? I could be wrong here, but how does adding a peripheral, which will probably be available on the other two consoles, help PS3 sales? How does that cut back the fees Kotick so loathes? And what of development? PS3 will still cost more per title for the same game, so where’s the benefit?

In running Sony into the ground is my guess. Kotick’s suggestion leads one direction – further marginalization of the PS3. If they keep releasing the same games and the same peripherals as everyone else, they’ll keep getting beat, for all the reasons Kotick cites early on. Then he doesn’t have to make the tough decision because every developer would leave with him.

For now you can rest assured Activision is still making plenty of money off Sony, but I’d bet other developers share some of Kotick’s thoughts, if not his fervor for making them public. Will Sony respond, or is Kotick just a blowhard? Sound off in the comments.