Sony rethinking cell processor strategy

For Sony, developing a new microprocessor from scratch didn't come cheap. In an effort to improve the razor-thin margins of their processor business, Sony appears to be breaking with tradition and is looking to outsource cell manufacturing while also foregoing the in-house development of more advanced (i.e. smaller) cell processors.

According to Sony Executive Deputy President, Yutaka Nakagawa, "When we first offered the PS2, there were no semiconductor companies that were able to make chips for the machine, so we did it ourselves. But now, there are companies that specialize in chip production. They are aggressively investing in cutting-edge technology. Our basic understanding is that we probably won't need to do everything by ourselves for next-generation chips."

In our minds, this is good news on a couple of fronts. First, this could help Sony become a more aggresive and agile player as they move away from their old-school "if it's not done by Sony, it's crap!" pride. Second, as their operating margins improve and they begin to realize savings and improved profitability, there is an increased chance that lower prices could be passed onto Joe Gamer (i.e. you and me). A PS3 that is less expensive to produce and purchase is a win-win for all of us.