After Sony announced job cuts for it's electronic departments, Katsuhiko Mori, fund manager at Daiwa SB Investments, said in an interview with the BBC: "Sony doesn't have any core businesses that generate stable profits". But will the Playstation 3 console be able to help Sony?

Although some people may point out that since the Playstation 3's release in 2006, the console hasn't actually made a profit, and this is because of the simple fact that Sony are selling the console for less than it costs them to make it. And it has been like that since it's release, Sony purposely reduced the price below their manufacturing costs so they could break into the market.

Although this may seem rather odd, Sony have used this tactic every time they release a console, even though the competition was tough, the did it with the Playstation 3.

Their plan was that if they release a high spec, low priced console that was making them a loss into the market, because it was high spec, the console will last a long time and over the time, make them a profit. But will they come through on top this time? With the high pressure competition that Xbox creates and the new market that Nintendo Wii has created, will Sony make enough money to cover their losses?

The dilema is that the price of the Playstation 3 will not be reduced until Sony start to make a decent profit. But as the consoles price currently is alot higher than the other consoles on the market, they won't get a huge proportion of the console sales, which will cause them to loose money for longer.

Although it sounds a bit rough for Sony at the moment, they do have one advantage, Blu-ray. It was lucky for them really that Blu-ray came out on top of the DVD battle. If HD DVD had won the battle, it could of turned out to be even worse for Sony as the Playstation 3 wouldn't have ahd any advantage over the competition.

So, currently, it's not looking good for Sony, and with their release of Playstation Home being criticised by Microsoft and founder of EA, Trip Hawkins. Both of them have stated that Sony's latest attempt at creating an online community is not directed and outdated.

Senior manager at Xbox 360 game console division, Aaron Greenberg, said: "When they unveiled it, it seemed innovative. I think what’s happened is now here we are a couple of years later and we feel beyond that. It feels like 2005 tech in 2008.”.

Tom Hawkins said "I can't tell if they're going towards this mass market idea…or if they’re being lured into essentially trying to compete with Warcraft or Second Life”.

After Sony spent alot of time, money and effort on their new social community, it has just been shot down, personally, it just seems like an idea of earning money, there are several things within the world that requires money to buy, and they also have sections of the world which are sponsored by different companies like Red Bull. I'm sure that all gamers don't want to have to walk around while being spammed with adverts.

Overall, it's not looking bright for Sony, they are relying on Playstation 3 sales to increase so that they can make a profit, but as the price is very high, it turns many buyers off, but they won't reduce the price until they make a decent profit. Who knows where Sony will be if their Playstation 3 doesn't start to sell more units.

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