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2011 may be the first profitable year for PlayStation Network

Posted at 29 December 2010 08:03 CET by wconeybeer

The higher retail price of the Sony PS3 game console versus Microsoft’s Xbox 360 is often balked at by consumers, even though PlayStation Network (PSN) online gaming access is free while an Xbox Live premium online membership now costs $60 per year, per account. What many may not realize, however, is that Sony has actually been operating PSN at a loss for the past five years.

A recent Reuters Japan interview with Sony Computer Entertainment chief Kaz Hirai reveals that 2011 may actually be the first year that PSN will make a profit.

According to Hirai’s comments, PSN’s fiscal 2010 sales numbers have “nearly doubled” fiscal 2009, which came in at $434.3 million USD. This means that an $800 million dollar sales year was still not enough for the service to turn a profit.

At this point, you can just imagine just how astronomical the operating costs must be for a 60 million member worldwide gaming network.

Hirai notes that membership is still growing, and that with the expansion of premium PSN content with the $50 per year PlayStation Plus service, he’s optimistic that 2011 sales may just be strong enough to bring PSN out of the red. “We’re aiming to enter the black during the 2011 fiscal year,” he told the reporter.

“As PSN moves into the black, and Microsoft continues to aggravate customers with rate hikes and confusing cancellation policies, things might be tipping Sony’s way in the online gaming game,” notes Forbes blogger Paul Tassi.

I don’t know that I would go so far as Tassi to say that Sony may take the advantage. With the launch of the Kinect, Microsoft has begun to woo a whole new generation, as well as a different type, of online gamers that will undoubtedly keep the sales strong. With estimated total annual revenue of over $1 billion dollars, Xbox Live is going to be a tough competitor to beat.

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