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With Sony Corp (NYSE:SNE) having just reported quarterly earnings last Thursday (click here for summary) buzz about its fall launch of the PlayStation 3 has picked up and brought about some comments that are worth reviewing.

Takao Yuhara, Sony's senior VP in charge of investor relations, responded to press inquiries on Friday saying that Sony wanted to recoup development costs (estimated to be around 500 billion yen ($4.33b)) associated with the PS3 within 5 years -- the same time frame as for the PS2.

Note that Yuhara was quoted in the Jiji press having said sales from the DVD version of The Da Vinci Code will generate profits for Sony's Pictures segment, and the segment will without a doubt report higher profits on the year as compared to the year prior.

Yuta Sakurai, a Nomura Securities analyst has been quoted all over the place based on a note to clients in which he said he predicts 71 million units of the PS3 being sold by 2011, versus 40 million units for Nintendo's (OTCPK:NTDOY) Wii. Sakurai said, "Hardcore gamers will probably prefer the raw power of PS3. And for all the positive vibes right now, the Wii isn't expected to outsell the PS3." Yet, to give Nintendo some credit Sakurai said, "Software developers are increasingly interested in creating games for these Nintendo platforms."

Masafumi Oshiden, a money manager at Merrill Lynch Investment Managers in Tokyo said, "PlayStation 3 will be a huge money loser in the beginning." And, "I think Wii will sell better than the PS3." Note that ML analysts have been pessimistic on the PS3 all along, citing high costs and delays.

As for Sony's goal of boosting profitability, cited Kazuhara Mura, an analyst at Daiwa Institute of Research, who said, "If the PS3 doesn't sell well, Sony won't be able to recoup the investment in five years." That would obviously keep heavy downward pressure on company margins.


Sony Not Out of the Woods Yet

Sony Corp (SNE) 1-year chart [intra-day A.M.]:

Source: Recent Comments on Sony PS3