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[mr_bishiuk]

Did they release any first party titles during the quarter? Sony has so many software studios working for them that they could be causing some of the losses. GT5, KZ2, TRICO, GoW, R2, Heavy Rain, HOME, Infamous, Uncharted 2, Motorstorm, LBP etc. When they release these titles they should be profitable...

379 millions is still hugh loss though.

The costs of developing those games are rolled up until they start selling them.

 

[max-pain]

The PSP is the only whose hardware sales went down compared to Q1.

As for its LTD, it's hard to calculate because Sony switched methods, but since the new method was used (from April 2006), the PSP has sold 30.32M and the old figures for the period before that are 17.03M

http://www.gamershell.com/companies/sony_computer_entertainment/484130.html

Since the launch of PLAYSTATION 3 in November 2006, over 14.4 million units have been sold globally and continue to be sold at a record level. Maintaining its position as one of the most successful consumer electronic products in history, PlayStation 2 has sold over 131.3 million systems worldwide. Since its launch at the end of 2004, over 41.3 million PSPs have been sold globally

+Q2

LTDs:

PS3 - 16.84m
PSP - 44.48m
PS2 - 133.8m

 

[Cool Hand Luke]

The costs of developing those games are rolled up until they start selling them.

Rolled up?

 

[Grayman]

Did they release any first party titles during the quarter? Sony has so many software studios working for them that they could be causing some of the losses. GT5, KZ2, TRICO, GoW, R2, Heavy Rain, HOME, Infamous, Uncharted 2, Motorstorm, LBP etc. When they release these titles they should be profitable...

379 millions is still huge loss though. You'd think that software sales and the strong performance from PS2 and PSP should be able to make up for the PS3 losses by now.

In one of these threads I think I saw that PS3 losses have been greater than all the profits ever made by the PS2.

 

[mr_bishiuk]

Rolled up?

Costs directly attributed to developing a particular game will be put on the balance sheet as an asset rather than the profit and loss account as a cost, this is because you try to match costs with revenue. Once a game is released and the sales start you move the costs off the balance sheet and into the profit and loss account matching costs with revenue.

 

[Cool Hand Luke]

Makes sense.

On second thought the game development can't cost them that much in a single quarter anyway, so it doesn't really matter. Funny how Sony could allow this to happen. Someone should have realised that a $600 console wasn't a good idea.

 

[apujanata]

If an company put in a document

"We have earnings of ($379m) for the year"

They'd get laughed at and appear somewhat desperate, like they hope the people reading dont understand.

AFAIK, positive earnings = profit. Negative earnings = loss. At least, accounting courses told me that.

 

[Bearillusion]

In one of these threads I think I saw that PS3 losses have been greater than all the profits ever made by the PS2.

While that is probably true it doesn't tell the whole story. That being of course that Sony used the PS3 to ensure bluray victory.

 

[fanboi]

Thats some loss there...

But isnt sony raking in money in general?

 

[Brashnir]

PS2 is certainly making money, and you'd have to think PSP is - which makes me wonder just how much the PS3 really lost this quarter. I figured they'd be getting close to break-even now on PS3 hardware, but that's obviously not the case.

Unless maybe PSP-3000 R&D and rollout cost a bunch and ended up in these numbers. It's hard to say when everything gets lumped in together. At least Sony doesn't toss in the Zune and a bunch of other crap to make it even more confusing.

 

[Grayman]

While that is probably true it doesn't tell the whole story. That being of course that Sony used the PS3 to ensure bluray victory.

Yeah I do not know how much profit that has made so far and what the possibilities in the future are.

As a game machine only the Playstation 3 just seems silly though. Launching a 600 dollar console that cost 800 or 900 to make without much software was not the way to convert a hundred million users. Someone must have figured out that media format royalties are the cats pajamas.

 

[andthebeatgoeson]

(Year of the PS3)

:lol :lol :lol

 

[Tycho_b]

As a game machine only the Playstation 3 just seems silly though. Launching a 600 dollar console that cost 800 or 900 to make without much software was not the way to convert a hundred million users. Someone must have figured out that media format royalties are the cats pajamas.

Apart from Nintendo, that's the business model that is adopted by gaming hardware industry since '90s . So it's not that silly.

This quarter's loss is roughly 3 times smaller than it was in the same quarter of 2007, and sales grew more than 10%. That is a good sign that they are recovering from being in BIG BIG RED since PS3 launch to become profitable again. Though they will have to face decreasing PS2 revenue. Not easy.

 

[RJT]

(win)

:lol

 

[Grayman]

Apart from Nintendo, that's the business model that is adopted by gaming hardware industry since '90s . So it's not that silly.

This quarter's loss is roughly 3 times smaller than it was in the same quarter of 2007, and sales grew more than 10%. That is a good sign that they are recovering from being in BIG BIG RED since PS3 launch to become profitable again. Though they will have to face decreasing PS2 revenue. Not easy.

That business model has worked but the PS3 was significantly more expensive than the competition. Were the non nintendo systems ever 30-50% more expensive than their retail cost?

 

[RJT]

Apart from Nintendo, that's the business model that is adopted by gaming hardware industry since '90s . So it's not that silly.

This quarter's loss is roughly 3 times smaller than it was in the same quarter of 2007, and sales grew more than 10%. That is a good sign that they are recovering from being in BIG BIG RED since PS3 launch to become profitable again. Though they will have to face decreasing PS2 revenue. Not easy.

But they'll never get the PS3 R&D costs back.
Which leaves them in an uncomfortable position for the PS4.
Which means they'll have to pull a Gamecube->Wii switch.
Which will make the "hardcore" cry.
Which will make me :lol

 

[gofreak]

At current sell through rates, I'd expect them to shift 43-47m units of PS3, total, by Nov 2011 (which is about when I'd expect a successor) (i.e. thusfar they're averaging ~730k per month over its ltd, or 810k per month in the last quarter).

Which wouldn't be brilliant, but wouldn't quite be 'lol gamecube' or 'lol xbox' either.

A lot of reports are pinning Sony's overall drop in profits to the strengthening yen, so I'm guessing that didn't help the game division's loss either (if one is looking to point a finger at causes).

 

[_Angelus_]

While that is probably true it doesn't tell the whole story. That being of course that Sony used the PS3 to ensure bluray victory.

Well shit - let's factor in Microsoft Windows potential while were at it. Then there's Nintendo. They own a professional MLB team,let's factor in that future potential and bring it into a gaming thread,ok?
:lol

 

[Regulus Tera]

Does anyone else notice that the most piracy-proof console is doing the worst sales-wise?

DS, PSP, 360, all piratable, all doing well worldwide. PSP and DS extremely well.

Wii is a different story, but it has a different install base, people who aren't necessarily hardcore gamers in the first place.

Just funny that anti-piracy GAF finds its formula reversed, the most piratable consoles are for the most part the most popular.

Piracy, despite legal issues or not, does help promote brand recognition by making it more accessible to a larger portion of the market.

 

[Bearillusion]

But they'll never get the PS3 R&D costs back.
Which leaves them in an uncomfortable position for the PS4.
Which means they'll have to pull a Gamecube->Wii switch.
Which will make the "hardcore" cry.
Which will make me :lol

They have the potential to make that back many times over if bluray takes off. Key word being 'potential'.

 

[mikekennyb]

The difficult part for Sony will be compensating for the (eventually) tailing off PS2 sales. When/if that ever happens, Sony will lose a big cash cow and have to rely more on the PS3 and PSP to drive profits. Given the current trend of the PS3 not coming anywhere close to replicating the PS2 in sales, that will be difficult.

However, the argument can be made that Sony doesn't mind losing money on the PS3 as long as Blu-Ray is king. Perhaps, but I doubt they would want to lose too much money on one of their main profit drivers (computer entertainment) to establish the Blu-Ray standard.

 

[mr_bishiuk]

The difficult part for Sony will be compensating for the (eventually) tailing off PS2 sales. When/if that ever happens, Sony will lose a big cash cow and have to rely more on the PS3 and PSP to drive profits. Given the current trend of the PS3 not coming anywhere close to replicating the PS2 in sales, that will be difficult.

However, the argument can be made that Sony doesn't mind losing money on the PS3 as long as Blu-Ray is king. Perhaps, but I doubt they would want to lose too much money on one of their main profit drivers (computer entertainment) to establish the Blu-Ray standard.

I think the blu ray point is moot as they have now won the blu ray war so suffering more losses in the cause of winning it seems a bit silly.

You can now buy profile 2 Sony blu ray players for considerably less than a PS3

 

[Parmenides]

1-Last week Sony announced a revision of its consolidated results forecast for the fiscal year,citing the stronger yen and a slump in the value of stock holdings.

Reasons for OP Revision

FOREX(FOReign EXchange Market) -- Foreign Exchange Rate Impact -130 Billion yen


- Electronics -100 Billion yen

-Game Division- 30 Billion yen


2- (Fiscal Year) Hardware Sales Forecast---- PSP 16/PS3 10/PS2 9


Q1--- Hardware Unit Sales (Unit:million)

PSP 3.72

PS3 1.56

PS2 1.51

Q2---Hardware Unit Sales (Unit:million)

PSP 3.18

PS2 2.5

PS3 2.43

3- 2008--- Hardware Unit sales (Unit:million)

NDS 12.75 (*)

PSP 10.32

Wii 9.49 (*)

PS2 6.4

PS3 6.32

360 4.8

(*) Nintendo announces Q2 results (tomorrow)

 

[Miburou]

In one of these threads I think I saw that PS3 losses have been greater than all the profits ever made by the PS2.

Taken from http://www.neogaf.com/forum/showthread.php?t=111003

FY Sony
1998 974,000,000
1999 1,130,000,000
2000 730,000,000
2001 -409,000,000
2002 623,000,000
2003 939,000,000
2004 650,000,000
2005 404,000,000
2006 75,000,000
2007 -1,969,000,000
2008 -1,265,000,000
2009 51,000,000
Totals 1,953,000,000

With the $379 loss, that still leaves them over $1.5B in profits since 1998.

 

[godhandiscen]

(Year of the PS3)

:lol

perfect.

 

[m3k]

(win)

:lol

(Year of the PS3)

:lol :lol

should become a new meme

 

[RJT]

They have the potential to make that back many times over if bluray takes off. Key word being 'potential'.

Not going to happen in time to fund PS4 development.

 

[RJT]

Taken from http://www.neogaf.com/forum/showthread.php?t=111003

With the $379 loss, that still leaves them over $1.5B in profits since 1998.

PS2 was launched in 2000. So it is a global loss since PS2 was released.

 

[Chittagong]

and so a (great) new meme is born.

 

[PARANO1A]

Taken from http://www.neogaf.com/forum/showthread.php?t=111003

FY Sony
1998 974,000,000
1999 1,130,000,000
2000 730,000,000
2001 -409,000,000
2002 623,000,000
2003 939,000,000
2004 650,000,000
2005 404,000,000
2006 75,000,000
2007 -1,969,000,000
2008 -1,265,000,000
2009 51,000,000
Totals 1,953,000,000

With the $379 loss, that still leaves them over $1.5B in profits since 1998.

What you quoted is 100% correct, yet completely irrelevant to the comment you replied to (i.e. since PS2). You have been learning well from Sony's NPD spin. :lol

 

[mr_bishiuk]

PS2 was launched in 2000. So it is a global loss since PS2 was released.

Even more so if you consider the PS1 was profitable for well into the PS2 lifespan and PSP must have also made a positive contribution

 

[Miburou]

What you quoted is 100% correct, yet completely irrelevant to the comment you replied to (i.e. since PS2). You have been learning well from Sony's NPD spin. :lol

Yeah, didn't notice it said "PS2". In any case, quoting that in this case proves that he's right in saying that at this point in time the PS3 has cost Sony more in losses than the PS2 did in profits.

 

[Bearillusion]

Not going to happen in time to fund PS4 development.

You're aren't looking at the big picture. Sony are. I'm not saying they were right btw.

 

[davepoobond]

(i) (love) "this" meme

(V)uahahaha!!!

 

[Son.Ralph.Funk]

"Since the launch of PLAYSTATION 3 in November 2006, over 14.4 million units have been sold globally and continue to be sold at a record level."

Record levels? :lol

Exactly what kind of "records" are they setting?

 

[Bearillusion]

Records hardly sell at all these days so it isn't hard.

 

[Elios83]

Sales are great.
PS3 is still outselling 360 worldwide notwithstanding the price difference ( 2.43m vs 2.2m last quarter) and right now it is at over 17m and PSP is on fire. PS2 is a miracle it's still selling as it is.
Financials not so much :lol but that was expected and the reason why they decided not to cut the price and actually considering sales and the global economic situation and the strong yen it was a wise decision. The strong yen cuts the profits from profitable businesses in USA and Europe and amplifies losses elsewhere.
They should be able to make a big profit during next quarter (they did it last year and they have done consistently better YOY so far financially) but then Q4 is usually a loss generator so it will be hard for the gaming division to have a full year profit, maybe a break even year if the yen goes down.

 

[carlosp]

seems like sony could need some of those 700 billion from bush :lol

 

[AniHawk]

Sales are great.
PS3 is still outselling 360 worlwide notwithstanding the price difference ( 2.43m vs 2.2m last quarter) and right now over 17m and PSP is on fire. PS2 is a miracle it's still selling as it is.

If the uh... standard for "great" sales are how well something's doing compared to the 360, then the industry's in trouble.

 

[Parl]

If the uh... standard for "great" sales are how well something's doing compared to the 360, then the industry's in trouble.

Fortunately, it's not. There's new standards to compare against now.

 

[Mar]

(win)

:lol

(Year of the PS3)

:lol :lol

Just as PSP got off to a slow start and has been picking up lately, I have a feeling that the PS3 will get a surge in sales eventually. Once games like Killzone 2 and God of War 3 come out, we'll start to see things change for Sony.

lol)

 

[YYZ]

wow, what have I started

 

[JoshuaJSlone]

It was 14.41M + 2.43M (16.84M) according to this: http://www.scei.co.jp/corporate/data/bizdataps3_sale.html

Well that is odd. That page (or its English equivalent with the same numbers) was my source, but at some point they've gone back and changed the data for FY2006. It used to be 1.66+1.91=3.57, but it's now 1.68+1.93=3.61.

Archive.org version with old numbers.

Apart from Nintendo, that's the business model that is adopted by gaming hardware industry since '90s . So it's not that silly.

Well, I guess that splits platforms into three main categories:
Nintendo
PS1/PS2
Money losers

 

[Private Hoffman]

With these losses, I don't think Q3 can put them in the black for the year.

Last year's Q3 figures were around 100 million?

If they could even get 400 million in Q3 that would be amazing, but I doubt it.

 

[legend166]

dp

 

[legend166]

"Since the launch of PLAYSTATION 3 in November 2006, over 14.4 million units have been sold globally and continue to be sold at a record level."

Record levels? :lol

Exactly what kind of "records" are they setting?

Record sales for a console named Playstation 3.

 

[Son.Ralph.Funk]

wow, what have I started

Something wonderful.

 

[Nocebo]

If the uh... standard for "great" sales are how well something's doing compared to the 360, then the industry's in trouble.

:lol :lol so true.
Sales-age rookies are funny to watch.

 

[DECK'ARD]

Sony Profit Plunges 72 Percent
By YURI KAGEYAMA
,
AP
posted: 24 MINUTES AGO
comments: 0
filed under: Earnings
PrintShare
Text SizeAAA
TOKYO (Oct. 29) - Sony Corp .'s quarterly profit plunged 72 percent as a surging yen wiped out perks from flat-panel TV and PlayStation 3 sales, as well as box office revenue from the movie "Hancock."

Sony said Wednesday it posted a net profit of 20.8 billion yen ($214 million) for the July-September period compared with 73.7 billion yen a year earlier. Sales in the fiscal second quarter slipped 0.5 percent to 2.072 trillion yen ($21.4 billion).
Sony makes about 80 percent of its sales overseas and is vulnerable to fluctuations in exchange rates. A rising yen erodes the overseas profits when converted into the Japanese currency.

"We already expect a poor performance for the Christmas shopping season," Chief Financial Officer Nobuyuki Oneda told reporters. "On how things will fare after Christmas, I can only say we will continue to keep a careful look."

Sony loses 7.5 billion yen ($77 million) in profit for each 1 yen gain against the euro, and 4 billion yen ($40 million) for each 1 yen gain against the dollar, he said.

Just last week, Sony slashed its full-year earnings projection, citing weaker consumer demand and a stronger yen. For the fiscal year through March 2009, it is expecting a 150 billion yen ($1.5 billion) profit, down 59 percent from the previous year, on 9 trillion yen ($92.8 billion) sales, up 1 percent on year.

The yen's recent jump, so lethal for Japanese exporters like Sony, was set off by panicky international investors rushing to unwind yen "carry" trades, which had taken advantage of Japan's low interest rates to borrow yen to invest elsewhere. Reversing those trades means buying back the yen, lifting its value.

Bad times could continue for the maker of the Walkman portable as the yen last week soared to a 13-year high of about 91 yen to the dollar. In trading Wednesday, the dollar was at 97 yen.

In the July-September quarter, the dollar averaged about 107 yen, down from 117 yen the same quarter last year. That dragged down Sony's sales and operating revenue by some 122 billion yen ($1.3 billion), according to the company.

The troubles are hitting when Sony had been gradually reaping the rewards of hard work in reshaping its businesses after taking a hammering from price competition.
Sony had in the past been criticized for losing its edge by moving too slowly in tailoring gadgets to consumer tastes as well as falling behind in digital music players and flat-panel TVs.

Under the leadership of Chief Executive Howard Stringer , a Welsh-born American and the first non-Japanese to head the Tokyo-based company, Sony climbed back to a record profit for the fiscal year ended March 31.

These days, Sony is again growing pessimistic, acknowledging it must make more adjustments if it hopes to live out the storm of the soaring yen.

Sony said it racked up an equity loss of 1.6 billion yen ($16.5 million) for the quarter ended Sept. 30, for its stake in Sony Ericsson , its mobile phone unit, because of a strong yen and a shift to cheaper handsets.

It also recorded an equity loss of 3.1 billion yen ($31.9 million) in Sony BMG because of a declining music market. Best-sellers included Kings of Leon's "Only by the Night" and AC/DC's "No Bull."

The recent fall in the Japanese stock market hurt Sony's financial sector business. Sony owns a 60 percent stake in a life insurer.

Sony reduced quarterly losses in the gaming business as sales in the sector improved 10 percent. Sony sold 2.43 million PlayStation 3 consoles during the quarter, up 85 percent from the same period a year earlier.

Sony shares rose 2 percent to 2,035 yen ($21) in Tokyo. The results were announced after trading closed in Tokyo.

Copyright 2008 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
2008-10-29 06:03:20

http://money.aol.com/news/articles/_a/bbdp/sony-profit-plunges-72-percent/229707

 

[road2serfdom]

The difficult part for Sony will be compensating for the (eventually) tailing off PS2 sales. .

I don't agree your claim here that PS2 sales will never tail off.