Like a biblical litany, Sony has repeatedly recited a list of games that it believes will make 2008 the year of the PlayStation 3. However, the company will need more than a good year to climb out of the hole it's in with the console.  The PS3 has cost the Japanese electronics giant $3.3 billion since its launch in late 2006 because of "strategic pricing" under which it sells the console at a loss, according to the annual report filed by Sony (nyse: SNE - news - people ) with the U.S. Securities and Exchange Commission on Monday. "Even if the platform is ultimately successful, it may take longer than expected to recoup the investment, resulting in a negative impact on Sonys profitability," the report said.  PS3 has had a difficult time gaining footing in the market thanks to the popularity of the Wii and the head-start the Xbox 360 got with its launch in 2005. Worldwide sales of the PS3 have totaled 12.9 million. Meanwhile, Microsoft (nasdaq: MSFT - news - people ) has sold over 10 million Xbox 360s in the United States alone. Videogame console manufacturers follow the razor and blades strategy: Sell your consoles on the cheap and reap profits from software royalties. The problem: Sony's machine is a mighty expensive razor--the basic model retails for $399. "The console is still too expensive for the masses," Wedbush Morgan analyst Michael Pachter said by e-mail. "A recession isn't going to help HDTV or Blu-ray sales." Sales started picking up in January, which was the first month the PS3 outsold the Xbox 360, according to market research firm NPD Group, thanks to Toshiba (other-otc: TOSBF - news - people ) tossing in the high-definition format towel on HD DVD (the PS3 doubles as a Blu-ray player).  Gran Turismo 5 Prologue, however, only managed 224,000 units sold in its first two weeks on store shelves in April, according to NPD. While Grand Theft Auto IV, which launched April 29, fared much better with a million copies sold in the first few days, it didn't help Sony sell more PS3s as expected. (See "Consoles' 'Grand Theft Auto' ")  It's too soon to tell how the PS3's highly anticipated Metal Gear Solid 4 will impact June sales. The year may not even be at the halfway mark, but Sony's luck will have to change if 2008 will end up the year of the PS3. It will now have to rely on its cast of anticipated holiday hits, such as Resistance 2 and LittleBigPlanet, and the launch of Home, its oft-delayed virtual online community, to drive sales. There's always 2009.  How To Get The Best (And Cheapest) Blu-ray Player
Sony says it has lost $3 billion on the PS3, as data suggests new games aren't driving console sales.