The news continues to not look good for Sony Corp. (NYSE: SNE).Sony's quarterly loss of $563 million was announced yesterday, and the consumer electronics giant cited PlayStation 3 development costs and under-performing sales as the triggers for such a dismal fourth quarter. Sir Howard Stringer may be pulling his hair out about now, if any is left. Perhaps that's a toupee he's been wearing all these years, eh?

Sony stated that it had shipped 5.5 million PlayStation 3 gaming consoles for its last fiscal year (below the internal goal of 6 million unit shipments), and the company now expects to ship 11 million PlayStation 3 units by March of 2008. Is that enough to get things on track at Sony? Probably not. In addition to lackluster PlayStation 3 sales, the prices for the red-hot category of flat-panel televisions have taken a huge nosedive, something Sony pricing execs are probably stewing over in the shower before each day begins.

But, back to the PlayStation 3, the reported high-development costs and high retail price tag of the gaming system are all pieces of the puzzle that is keeping these units in short supply and not in the hands of gaming consumers, who seem to prefer the much cheaper Nintendo Wii ($250), which is much less advanced technologically than the PlayStation 3 but contains a far more immersive gaming experience for the consumer, according to critics. In other words, it's not the horsepower that counts here but the overall engagement with the consumer. This was lost on Sony apparently, as the PlayStation 3, for all its high-tech goodness, is being left behind by even the year-and-a-half old Microsoft (NASDAQ: MSFT) Xbox 360.