According to Sony's last financial figures, the cost of launching the PS3 contributed to a 68% drop in operating profits to ¥71.8-billion (£300m) for the year to 31 March. The Games division itself saw an operating loss of ¥232.3-billion (£970m).
For the three months from January to March Sony posted a net loss for the entire organisation of of ¥67.6-billion (£286m) - its biggest quarterly loss for four years.
The company explains the main reason for the Game 'segment' loss as follows:
Despite the overall losses, however, sales within the Games division increased by 6.1% year-on-year and break down as follows:
Sony also released full figures for the shipment of hardware and software over the fiscal year. Bear in mind that, according to the company, "Production shipments of hardware and software units are counted upon shipment from manufacturing bases. Sales of such products are recognized when the products are delivered to customers." In this case 'customers' refers to retail outlets and not Joe or Joanna Bloggs.
So, the dream of six million PS3s sold by March 2007 has officially died.
On the bright side, the company predicts the future as follows:"An increase in sales is anticipated as a result of the full-scale expansion of the PS3 business in Japan, the United States and Europe. In addition, a significant reduction in operating loss is expected due to rapid reductions in hardware production costs and an enhanced line-up of software titles in the PS3 business."
A hopeful prediction? Or one based on solid projections? The company will be aware of how its PS3 production costs will fall, as components such as the Cell processor and Blu-ray drive combine with depreciation of the fabrication charges.
Do not expect this to lead to official price reductions, however, as Sony will need to recoup its current losses. Do expect more restructuring within the company as a whole as CEO Howard Stringer's ideal of "Sony United" ramps up.
For the three months from January to March Sony posted a net loss for the entire organisation of of ¥67.6-billion (£286m) - its biggest quarterly loss for four years.
The company explains the main reason for the Game 'segment' loss as follows:
"In the Game segment, there was a significant operating loss as a result of the sale of PS3 at strategic price points lower than its production cost during the introductory period."
Despite the overall losses, however, sales within the Games division increased by 6.1% year-on-year and break down as follows:
"Hardware: Overall sales increased as a result of the launch of the PS3 in Japan, North America, and Europe. However, the sales of PlayStation 2 and PSP declined due to lower unit sales compared to the previous fiscal year, and also because of a price reduction of the PS2.
"Software: Despite an increase in PSP software sales compared to the previous fiscal year, as well as the contribution from PS3 software sales, overall software sales decreased as a result of lower PS2 software sales."
"Software: Despite an increase in PSP software sales compared to the previous fiscal year, as well as the contribution from PS3 software sales, overall software sales decreased as a result of lower PS2 software sales."
Sony also released full figures for the shipment of hardware and software over the fiscal year. Bear in mind that, according to the company, "Production shipments of hardware and software units are counted upon shipment from manufacturing bases. Sales of such products are recognized when the products are delivered to customers." In this case 'customers' refers to retail outlets and not Joe or Joanna Bloggs.
Worldwide Hardware Shipments:
PS2 - 14.2 million units (a decrease of 2.02 million units year-on-year)
PSP - 8.36 millions units (a decrease of 5.50 million units year-on-year)
PS3 - 5.50 million units
Worldwide Software Shipments:
PS2 - 193 million units (a decrease of 30 million units year-on-year)
PSP - 54.1 million units (and increase of 12.5 million units year-on-year)
PS3 - 13.2 million units
PS2 - 14.2 million units (a decrease of 2.02 million units year-on-year)
PSP - 8.36 millions units (a decrease of 5.50 million units year-on-year)
PS3 - 5.50 million units
Worldwide Software Shipments:
PS2 - 193 million units (a decrease of 30 million units year-on-year)
PSP - 54.1 million units (and increase of 12.5 million units year-on-year)
PS3 - 13.2 million units
So, the dream of six million PS3s sold by March 2007 has officially died.
On the bright side, the company predicts the future as follows:"An increase in sales is anticipated as a result of the full-scale expansion of the PS3 business in Japan, the United States and Europe. In addition, a significant reduction in operating loss is expected due to rapid reductions in hardware production costs and an enhanced line-up of software titles in the PS3 business."
A hopeful prediction? Or one based on solid projections? The company will be aware of how its PS3 production costs will fall, as components such as the Cell processor and Blu-ray drive combine with depreciation of the fabrication charges.
Do not expect this to lead to official price reductions, however, as Sony will need to recoup its current losses. Do expect more restructuring within the company as a whole as CEO Howard Stringer's ideal of "Sony United" ramps up.
Companies:
Sony
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Comments
allsorts111 (psp-spot/spot network admin etc) 16 May 2007 18:45
1/3
im not fan boy, i just genuinally like sony. And i bet in ayears time the ps3 sales figures will spike.
Joji 17 May 2007 19:44
2/3
Like I've always said, it's up to Sony. Their fate is in their own hands, but we play a part in it too. The current apathy shows this much.
ilh 18 May 2007 15:42
3/3
The GBA outsold the PS3 in north america in April, that kinda says something...