Gamers may bemoan the high retail prices attached to the new PlayStation 3 console, but it is worth remembering that the system is actually sold at a loss by Sony - who hope to make up the cost, and then a profit, based on software and peripheral sales for the new system. With this in mind then it is perhaps not so surprising to see that Sony have reported a huge loss for the first three months of 2007. The game's division losing 914 million USD in all.

While the price of making and delivering the high-tech new console is clearly hitting Sony's bottom line early on, then, it wasn't all doom and gloom at the console maker - the PS3 also boosting revenue from the previous quarter. Company wide sales hit 17.7 billion USD.

Once again, full 2006 results were hardly glowing - the gaming group made a loss of just under 2 billion USD - seemingly as a result of investment in the new console. "This deterioration was primarily the result of loss arising from the sale of PS3s at strategic price points lower than its production cost during the introductory period, as well as the recording of other charges in association with preparation for the launch of the PS3 platform," explained Sony to investors.

During the year, Sony shipped 5.5 million PS3 consoles and 13.2 million games for it. 14.2 million PS2s were also dispatched, and also 8.4 million PSPs. Sony add that they expect costs associated with the PS3 to improve going forward, with losses 'significantly reduced' as hardware production costs fall and software sales increase. More soon.

By Luke Guttridge

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