PlayStation 3 was way overpriced and still lost money on each unit, former Sony exec says

The PlayStation 3 was a technical marvel when it came out in November 2006, but despite its success, it caused numerous headaches for former Sony Computer Entertainment America CEO Jack Tretton.

Tretton, speaking in a video interview with IGN, said the console faced an uphill battle because the Xbox 360 had been out for a year, and the $600 price point for the new console mad it much more expensive than its Microsoft counterpart. His promotion only a few months before the console's launch was like "being made the captain of the Titanic just before it hit the iceberg," 

The company knew it had a good product, but the timing was bad.

"It was quite possibly the most difficult launch scenario you could ever imagine, knowing that Xbox 360 was already out, that you were much more expensive than you wanted to be, that you had much less inventory than you wanted to have at launch, and that it was going to be a learning curve in terms of software development and manufacturing efficiency," he said. "A lot of real challenges there at that launch."

tretton agreed that Sony might have tried a different angle, but the company wanted to go big with it's next iteration. However, all that new technology made the cost to produce the unit so high that even at $600, Sony was still losing money on each unit sold.

"The easy thing to do [after the success of PS2], would have been to have done a PlayStation 2.5; something that's enhanced but kind of staying the course," he added. "PS3 was really stepping out of the box. I think ultimately it delivered a lot of great technology that's ultimately appreciated today. But at the time, because of the Cell processor and all the proprietary technology, it was difficult to develop for, it was difficult to manufacture; it was extremely expensive to manufacture. So at the price it came out at, everybody knew that wasn't a consumer-friendly price."

Tretton, who left Sony in 2014 after 19 years, said his time overseeing the PS3 was one of the most stressful he's ever faced. "That period of PS2 to PS3 was the most intense period of my career, at least at Sony," he said. "Tremendous success with PS2; I think we had 60-plus, 70-plus percent market share on a worldwide basis. Just the most successful platform in history--and how do you follow that up?"

The whole IGN interview is about 45 minutes long and well worth a listen if you want more of a background on the PS3 era at Sony.

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