Microsoft will lose hundreds of millions of dollars promoting and selling Xbox 360 but to take it up a notch, Sony will expect to lose more than $1 billion dollars on manufacturing of Playstation 3 in the first 12 months of release. Analysts have warned that the release of the PS3 could backfire on gaming giant Sony Computer Entertainment, bringing the Sony subsidiary to its knees. Merrill Lynch Japan has stated it expects Sony to lose more than $1 billion on hardware manufacturing alone during its next-gen console”s first 12 months on sale, a figure that may prove unrecoverable. Merrill Lynch Japan Securities, quoted in the latest issue of Toyo Keizai, states that it expects core production costs of PlayStation 3 to be around $500, with the machine likely to ship at $399 ? equating to a loss of around $1.18 billion in the first year the machine goes on sale. It should be noted that these losses are based purely on manufacturing costs and do not factor in the colossal marketing budget SCE has undoubtedly prepped for it”s next home console launch. Read rest of the article at Spong.com Source

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