Sony filed its annual 20-F regulatory filing report, in which it claims it had losses of $2.15 billion for the the fiscal year 2007 after the launch of the PS3. The PS3 had been on the market for just about five months during its FY07 which ended on March 31, 2007. Sony claimed a big improvement over the fiscal year 2008, which ended March 31st, in which it said it only had losses of $1.15 billion in its gaming segment.
Sony sold its PS3 console at a price that was less than the cost of manufacturing it, in order to establish a large user hardware base. Losses over the PS3 rose to more than $3.3 billion during the fiscal years 2007 and 2008, which Sony attributed to establishing the hardware, the product and selling the consoles at a loss. The royalties on software games normally offset hardware expenses, but has not countered these huge losses yet.
Sony claims that it sold almost twice as many PS3 consoles in 2008 as it did in 2007. Sony also claimed that it had significantly cut hardware costs in the PS3 to save about $1 billion.