The PlayStation 2 is the Muhammad Ali of the current hardware generation, still bouncing and baiting its opponents after what was in retrospect an easy victory. By the end of last year, more than 100 million had been sold, and worldwide software sales were closing in on 2 billion units. PlayStation has replaced Nintendo as the catchall name for gaming in the mainstream, and every day millions of people switch on for another go on one of the 6,200 PlayStation 2 games released so far. How, then, has Sony managed to burn all this goodwill in just a few short months? Not a week has gone by since the PlayStation 3 made its underwhelming debut at E3 in May when Sony wasn't making the headlines for all the wrong reasons. The company's PR department has been running itself ragged trying to temper the ill will hurled at the company. One of the victims of this onslaught was Molly Smith, Sony's longtime head of PR in America, who quit after nearly a decade in that role. But she isn't the only executive feeling the heat. From Ken Kutaragi on down, the big people at Sony are getting battered in the press in a way that seemed unimaginable just a year ago. Despite all this negative attention, the PlayStation 3 is still one of the most desired pieces of electronics out there. Microsoft showed us last year what happens when you don't plan a worldwide launch properly, and it's something Sony has no plans to repeat. One way of doing that is to ensure that the early days of the console's life go off without a hitch. Is this a reason why the PlayStation 3 is priced so high? Is Sony pushing the price to temper demand so that it can keep up? Console makers taking a hit on hardware isn't anything new, but keeping the price high around launch, when those who want one badly enough will pay whatever the price is, does at least help Sony to lose as little as possible. Sony is so eager to make sure demand doesn't spiral out of control, it is reportedly in talks with retailers in the UK to ask all potential customers to put down £150 (around $280) as deposit when they pre-order. It's important to note that we're not talking about pittances here. Sony could lose as much as $2 billion in the first year of the PlayStation 3, says a report at Business Week. And the company has just had to take out a $700 million loan - it's first in a decade - for, according to a spokesman, "general purposes". You'd think that with those sorts of figures swimming through the minds of Ken Kutaragi and Sony CEO Howard Stringer, penny-pinching would be in order, but sometimes waste can't be avoided. Take as an example production of Cell - the almost-mythological heart of the PlayStation 3. The IBM-designed chip is a massively complicated beast comprised of 8 synergistic processor elements that will transport us - theoretically, at least - into worlds no other current technology could conjure. What complicates matter is that for the Cell to work properly, it needs at least seven of these SPEs to be functional, and getting that right is anything but easy. IBM's Tom Reeves said in an interview earlier this month that yields for the Cell are about 10-20 percent, meaning that there are an awful lot of Cell chips being thrown into the trash. That's going to get better, but right now it's still a lot of money being wasted. The other major component of the PlayStation 3 is the Blu-ray drive. The drive uses a specialist diode that only Sony and another company, Nichia, make, and right now all stock is being filtered into the PlayStation 3. Meanwhile, Samsung's stand-alone Blu-ray player has already hit the market. The best Sony could manage was to delay its player to October in the US and 2007 in Europe.