There’s even more bad news for Sony, it seems. After marketing the PlayStation 3 with a sheer muscle ad campaign, the company is now clearly regretting its production of the Cell processor, considered by many to be the heart of the console. In fact, executive management is discussing possible plans to pull out of Cell processor production altogether.
When pressured by reporters for an explanation to Sony’s considerable 5% decline in quarterly profits (semiconductor division), Executive Deputy President Yutaka Nakagawa excitedly blamed the loss on the Cell processor’s expensive production costs. With the processor set to move from fabrication with 90 nm lithography to 65 nm or even 45 nm (in accordance with IBM standards), Nakagawa also told reporters that Sony would not be bearing the burden of these transition costs.
The PlayStation 3 was intended to be the Cell processor’s “coming out” party. With Sony dominating the video game console market for two full generations, there was little doubt that both the system and its hardware would win over a riled-up fan base. Unfortunately, partially because of the processor’s cost and the inclusion of a pricey Blu-ray high definition DVD player, the PS3 has sold very poorly. Few gamers are willing to shell out $500 or $600 for a console that has few games meeting the quality of competition from Nintendo or Microsoft.
The news doesn’t necessarily mean Sony is giving up on the Cell processor, which will likely still worm its way into the (slow) parade of PlayStation 3s. Instead, speculation is that Sony will contract out the chip’s production, an approach taken by other major tech companies like nVidia and Texas Instruments.
At the moment, IBM appears to be the most new suitor for the Cell processor. However, it’s fairly apparent that Sony is desperate to sell production; that means the pain bestowed upon the company’s semiconductor division may pale in comparison to the poor jerks in accounting.
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