Since the launch of the Playstation 3, Sony has been in a downward spiral. The company reported a $3.3 billion loss in their 2008 annual report. That’s what happens when you rush a project. The reason is that Sony sold the console for less than the cost of production cost is was to compete with Microsoft’s XBOX 360. Make a thousand dollar gaming console and sell it for $599, probably not the most profitable idea. To make matters worse to keep up with their competition, XBOX 360 and Nintendo’s Wii, they cut the price again. Can you say bad idea? Those who have invested in the Playstation 3 might have a little to worry about now as Sony says:

“the large-scale investment required during the development and introductory period of a new gaming platform may not be fully recovered.” They also mention that they have invested a lot into the PS3 and the money may never be regained if PS3 “fails to achieve such favorable market penetration.”

The company did have one good note and that was the 26% sales jump they had last quarter. Sony is staying positive through these rough times, and feels with the launch of games like Metal Gear Solid 4 and Resistance 2 might boost the sales of consoles. $3.3 billion just isn’t a small hole to climb out of.

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