For Sony, single digit losses in the Christmas quarter is practically a victory

New York Times: Profit Slips at Sony on Losses for PlayStation 3

TOKYO, Jan. 30 — Sony, the Japanese electronics maker, said today that its profit had slipped in the third quarter as it took large losses on its new PlayStation 3 game console.
But the company raised its annual profit forecast following strong sales of its core consumer products, like televisions and digital cameras, and movies like the latest James Bond film, "Casino Royale."
Sony reported a net profit 159.9 billion yen, or $1.3 billion, in the quarter ended Dec. 31. That was 5.3 percent below the same quarter the year before, but well above analysts estimates that profit would drop by as much as half.
The electronics division posted operating profit of 177.4 billion yen, up 102.8 percent, helped by the popularity of Sony's Bravia flat-panel TVs and Cyber-shot digital cameras.
Electronics helped overcome some of the declines at the game unit, which posted a quarterly loss of 54.2 billion yen, down from a 67.8 billion yen profit in the quarter a year earlier.

And why is this, you ask?

In a statement, Sony blamed the decline on a strategic decision to set the price of the PlayStation 3 below the cost of production as a way to bolster market share. It also blamed start up costs for the new consoles, which were released in Japan and the United States in November. Sales of PlayStation Portable hand-held players have also been slow, the company said.

Given the weak launch, and the relatively apathetic reaction in the marketplace, now is the time for Monday Morning Quarterbacks to second guess Sony's decision throw all their chips on a single toss and let it ride.

So far, it's not looking like a good decision.

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