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Sony FY10: NPS posts operating income of $429M

P

Parmenides

Banned
-Sony Corporation, the world's largest game console maker,announced its consolidated results for the the fiscal year ended March 31,2011 (Apr 1,2010 to Mar 31,2011)

-Sony Corporation posted an operating income of $2.4 billion

-The company reported a net loss of $3.12 billion

-Net income decreased by approximately $4 billion from the February forecast primarily due to a non-cash charge to establish a valuation allowance of approximately $4.4 billion against certain deferred tax assets in Japan

-The non-cash charge to establish a valuation allowance does not have any impact on Sony’s consolidated operating income or cash flow nor does such an allowance preclude Sony from using the loss carry forwards or other deferred tax assets in the future

-The establishment of this valuation allowance does not reflect a change in Sony’s view of its long-term corporate strategy.Sony expects that consolidated sales will be higher,that operating income will be approximately the same as for the previous fiscal year and that it will record net income attributable to Sony’s stockholders

-NPS (includes Sony's Game Business) posted an operating income of $429 million

-For the current fiscal year ending March 31, 2012, Sony expects to sell 15 million PS3s, 6 million PSPs and 4 million PS2s

-Beginning with the quarter ended June 30,2007,the method of reporting hardware and software unit sales has been changed from production shipments to recorded sales

PSP Worldwide Unit Sales/Production Shipments (Unit:Million)
Code: 
Hardware Sales   Ap-Jn    Jl-Sp    Oc-Dc    Ja-Mr     FY       LTD

FY 2006/07        1.4      2.0      4.7      1.5      9.6      9.6 

FY 2007/08        2.1      2.5      5.7      3.5      13.8     23.4 

FY 2008/09        3.7      3.2      5.1      2.1      14.1     37.5 

FY 2009/10        1.3      3.0      4.2      1.4      9.9      47.4

FY 2010/11        1.2      1.5      3.6      1.7      8.0      55.4

March 31,2006  Cumulative  Production Shipments of Hardware    17.03

LTD Hardware Unit Sales + Cumulative  Production Shipments     72.43


Software Sales   Ap-Jn    Jl-Sp    Oc-Dc    Ja-Mr     FY       LTD

FY 2006/07        9.2      13.2     21.2     11.1     54.7     54.7

FY 2007/08        9.8      12.6     18.3     14.8     55.3     110.0 

FY 2008/09        11.8     11.8     15.5     11.2     50.3     160.3 

FY 2009/10        8.3      13.0     15.0     8.1      44.4     204.7

FY 2010/11        9.2      11.0     16.5     9.9      46.6     251.3

March 31,2006  Cumulative  Production Shipments of Software    47.3

LTD Software Unit Sales + Cumulative  Production Shipments     298.6
PS2 Worldwide Unit Sales/Production Shipments (Unit:Million)
Code: 
Hardware Sales   Ap-Jn    Jl-Sp    Oc-Dc    Ja-Mr     FY       LTD

FY 2006/07        2.3      3.4      6.7      2.4      14.8     14.8 

FY 2007/08        2.7      3.2      5.4      2.4      13.7     28.5 

FY 2008/09        1.5      2.5      2.5      1.4      7.9      36.4 

FY 2009/10        1.6      1.9      2.1      1.7      7.3      43.7

FY 2010/11        1.6      1.5      2.1      1.2      6.4      50.1

March 31,2006  Cumulative  Production Shipments of Hardware    103.69

LTD Hardware Unit Sales + Cumulative  Production Shipments     153.79


Software Sales    Ap-Jn    Jl-Sp    Oc-Dc    Ja-Mr     FY       LTD

FY 2006/07        32.7     47.2     78.6     35.0     193.5    193.5

FY 2007/08        31.1     38.0     60.9     24.0     154.0    347.5 

FY 2008/09        19.3     23.2     29.7     11.3     83.5     431.0 

FY 2009/10        8.5      11.4     11.2     4.6      35.7     466.7

FY 2010/11        3.4      5.6      5.3      2.1      16.4     483.1

March 31,2006  Cumulative  Production Shipments of Software    1047.0

LTD Software Unit Sales + Cumulative  Production Shipments     1530.1
PS3 Worldwide Unit Sales (Unit:Million)
Code: 
Hardware Sales   Ap-Jn    Jl-Sp    Oc-Dc    Ja-Mr     FY       LTD

FY 2006/07         -        -       1.7      1.8      3.5      3.5

FY 2007/08        0.7      1.3      4.9      2.2      9.1      12.6 

FY 2008/09        1.6      2.4      4.5      1.6      10.1     22.7 

FY 2009/10        1.1      3.2      6.5      2.2      13.0     35.7

FY 2010/11        2.4      3.5      6.3      2.1      14.3     50.0


Software Sales   Ap-Jn    Jl-Sp    Oc-Dc    Ja-Mr     FY       LTD

FY 2006/07         -        -       5.2      8.1      13.3     13.3

FY 2007/08        4.7      10.4     26.0     16.8     57.9     71.2 

FY 2008/09        22.8     21.2     40.8     18.9     103.7    174.9 

FY 2009/10        14.8     23.9     47.6     29.3     115.6    290.5

FY 2010/11        24.8     35.3     57.6     30.2     147.9    438.4
Code: 
Hardware Sales (Unit:Million)

      (Ap-Jn)10   (Jl-Sp)10    (Oc-Dc)10    (Ja-Mr)11    FY       LTD


PS3      2.4        3.5          6.3          2.1        14.3     50.0 

Wii      3.04       1.93         8.75         1.36       15.08    86.01

360      1.5        2.8          6.3          2.7        13.3     53.6

PS2      1.6        1.5          2.1          1.2        6.4      153.79


FY 2011/12 FCT

PS3    Wii     PS2

15.0   13.0    4.0

Worldwide Hardware Sales (Ja-Mr) 2011
Code: 
    Sell-through (*)       Sell-in

PS3     2.45                 2.1

360     2.09                 2.7

Wii     2.00                 1.36

(1)Europe+Japan+U.S.


SONY%2BHARD_thumb.jpg


SRP%2BHARD_thumb.jpg


Hard%2B14_thumb.jpg
 
2.1 14.3

Maintained the 2.1 and hit 14.3 for the year. At 50M that would mean the difference between it and 360 is now 3.6M iirc. MS gained .6M in the quarter and the total fiscal year numbers will be real close at 14.3.

At 15M estimate I'm surprised not a bit higher with a price cut baked in.

Healthy income for the quarter or is that $429 for the fiscal year? If not what is the total for the fiscal year?
 
So I guess there is probably not going to be a $100 price drop for the PS3. Most likely will be a $50 price drop in September. If there was going to be a larger price drop, I'd expect 18M for the next fiscal year.
 
PS2 still sold nearly 6.5 million this year? I usually don't give a crap about sales, but I think that's pretty impressive for an 11-year-old system.
 
lunchwithyuzo said:
I'd always heard ~70m GB to ~49m GBC.
Click to expand...
Seems reasonable.

It appears the number from wiki came from the end of fiscal year 1997. The GBC launched later in calendar 1998, so they probably sold closer to ~70 million GB when all was said and done.
 
Parmenides you always mix unit sales with production shipments even though we have actual unit sales LTDs through various PRs from Sony.

Unit sales LTD (real shipped figures:

PS3: 50.0m
PSP: 69.5m
PS2: 150.9m

Software LTD:

PS3: 438.4m
PSP: 296.6m
PS2: ~1528m
 
There seems to be an error with the Worldwide Hardware Sales (Ja-Mr) 2011 with XBOX 360 numbers, i think they are inverse, they should be like this:

Sell-through: 2.7
Sell-in: 2.09
 
Yeah Sony needs to do something to sell more PS3, because what i can see from that chart, is that the XBOX360 is having a big momentum with it sells, selling in this last quarter (Jan-March) over 600,000 units more than the PS3, where usually the PS3 sells more, i think is time for a PRICE DROP and some new bundles.

Edit: just in case
Hardware Sales (Unit:Million) (Ja-Mr)/2011
PS3: 2.1
360: 2.7
 
PS2 > 360 & PS3 in both hardware and software LTD since the beginning of the new generation.

Still the King!

Zen said:
wow, Microsoft actually manged to outsell Sony for the quarter. That's pretty impressive.
Click to expand...
I believe they outsold them last quarter. PS3 outsold both 360 and Wii this quarter.
 
arnoldocastillo2003 said:
There seems to be an error with the Worldwide Hardware Sales (Ja-Mr) 2011 with XBOX 360 numbers, i think they are inverse, they should be like this:

Sell-through: 2.7
Sell-in: 2.09
Click to expand...

No, they are correct, two other two probably overstuffed the channel in the last quarter. That's why their sell-through (direct sales) nubers are higher than sell-in (shipments).
 
arnoldocastillo2003 said:
What quarter you are talking about?
Click to expand...
The last quarter where Sony shipped 6.3 million as did Microsoft. They didn't match or outsell 360 during that quarter. They did outsell them between January to March overall since we have the data, but they also shipped much less than what they sold. They shipped more than necessary basically in the last quarter. Makes sense too considering the crazy difference between 360 and the PS3 in the US during one of those months (something like a million).
 
Kam said:
The last quarter where Sony shipped 6.3 million as did Microsoft. They didn't match or outsell 360 during that quarter. They did outsell them between January to March overall since we have the data, but they also shipped much less than what they sold. They shipped more than necessary basically in the last quarter. Makes sense too considering the crazy difference between 360 and the PS3 in the US during one of those months (something like a million).
Click to expand...

You seem to be talking about sales, Zen's talking about shipments since that's the number we got today.
 
REMEMBER CITADEL said:
You seem to be talking about sales, Zen's talking about shipments since that's the number we got today.
Click to expand...
I think the distinction made to him was correct in answering his question. It actually gives him information. I assume he made the mistake with the sell-in and sell-through number of the 360 because he saw that 360 shipped more than PS3 this quarter.
 
REMEMBER CITADEL said:
No, they are correct, two other two probably overstuffed the channel in the last quarter. That's why their sell-through (direct sales) nubers are higher than sell-in (shipments).
Click to expand...

Oh! now i get it, thanks for the clarification.

Kam said:
I think the distinction made to him was correct in answering his question. It actually gives him information. I assume he made the mistake with the sell-in and sell-through number of the 360 because he saw that 360 shipped more than PS3 this quarter.
Click to expand...
Yes, you are correct, i was mistaken numbers and with your answer i got a more clear view of the data.
 
429 Million and projecting that to drop big time next year, this division is in a high risk, low reward place right now. Something needs to change.
 
bigtroyjon said:
429 Million and projecting that to drop big time next year, this division is in a high risk, low reward place right now. Something needs to change.
Click to expand...
Why ? Less revenue because of PS3 price cut and costly NGP launch ?
 
What's interesting is that they are only forecasting 15m units in sales next year. I would think a $50 price drop would at least get them another 2 to 3m in sales putting PS3 at 16 - 17m next year. If they made $430m last year and will take a $103m hit next year from the PSN outage that already puts their profit down close to 20%. Could the PSN outage put the price move at risk?
 
Did I read that graph right? The PS2 since 2006/2007 has sold more than the PS3 in the same time? Wow the PS2 is a beast of a system.
 
Pride said:
What's interesting is that they are only forecasting 15m units in sales next year. I would think a $50 price drop would at least get them another 2 to 3m in sales putting PS3 at 16 - 17m next year.
Click to expand...

While it's tempting to think that, a price cut may be needed just to maintain a certain level of sales. Who knows? Without a price drop sales would probably flag vs last year's level to a certain degree at least.

I do agree with others' speculation that this maybe points more to a $50 drop than a $100 one. I think a $199/€199 PS3 this year would do bigger things than that.

Shame there's no NGP forecast. On a total side note, I just noticed a NGP 'ad' here on GAF, teasing more for June 6 (E3 conference).
 
NateDrake said:
Did I read that graph right? The PS2 since 2006/2007 has sold more than the PS3 in the same time? Wow the PS2 is a beast of a system.
Click to expand...
Second only to Wii this generation if we're only going by sales. I'm genuinely curious if we'll ever see a console with this kind of longevity again, though I doubt it.

I think you're reading the graph wrong however since PS3 has outsold it since it launched. The graph displays PS2 from its launch.
 
sensi97 said:
Why ? Less revenue because of PS3 price cut and costly NGP launch ?
Click to expand...
Revenue will be going up, sounds like they will be selling less high margin items and of course the PSN outage will hurt.

NPS
Sales are expected to increase year-on-year primarily due to higher sales in the game business, PCs and network services. In contrast, operating income is expected to significantly decrease, primarily due to lower unit sales of PSP® (PlayStation Portable) and PS2 hardware and software, as well as expenses associated with the unauthorized access to Sony’s PlayStation®Network, Qriocity™ and Sony Online Entertainment network services. Please refer to the relevant section of the Management Policy on page 14 for more details.
Click to expand...
 
Kam said:
Second only to Wii this generation if we're only going by sales. I'm genuinely curious if we'll ever see a console with this kind of longevity again, though I doubt it.

I think you're reading the graph wrong however since PS3 has outsold it since it launched. The graph displays PS2 from its launch.
Click to expand...
The PS2 in 2006/2007 till now is 50.1. The PS3 is 50.0. Yes, the PS2 has April-September added to that which = 5.7million units. So the PS3 has outsold it since it has launched but still the PS2 has put up 44.6 million sales since the PS3 launch.
 
Do we have any realistic projections on the likely expenses of the Network fall out? Has Sony commented, last thing I read was that pie in the sky, 1.77 billion number. is it possible they'll record a operating decrease because of it?
 
Trevelyon said:
Do we have any realistic projections on the likely expenses of the Network fall out? Has Sony commented, last thing I read was that pie in the sky, 1.77 billion number. is it possible they'll record a operating decrease because of it?
Click to expand...
Sony estimates are around $221m. And they said they expect a decrease with this being one of the reasons.
 
Pride said:
What's interesting is that they are only forecasting 15m units in sales next year. I would think a $50 price drop would at least get them another 2 to 3m in sales putting PS3 at 16 - 17m next year.
Click to expand...
It's worth noting that they projected 15m for this year as well, but fell slightly short.
 
Kam said:
I'm genuinely curious if we'll ever see a console with this kind of longevity again, though I doubt it.
Click to expand...

Not unless a system has the number of exclusives that the PS2 had. And that seems highly unlikely at this point.
 
gofreak said:
While it's tempting to think that, a price cut may be needed just to maintain a certain level of sales. Who knows? Without a price drop sales would probably flag vs last year's level to a certain degree at least.

I do agree with others' speculation that this maybe points more to a $50 drop than a $100 one. I think a $199/€199 PS3 this year would do bigger things than that.

Shame there's no NGP forecast. On a total side note, I just noticed a NGP 'ad' here on GAF, teasing more for June 6 (E3 conference).
Click to expand...

I think we'll see a decline YoY until around September then they'll price cut and will get back to beating YoY to deliver 15M. I think that the US may come under because you suckers love that 360 but the RoW will deliver the goods.

I think Sony are set at 15M for another year or two.
 
ichinisan said:
I think we'll see a decline YoY until around September then they'll price cut and will get back to beating YoY to deliver 15M. I think that the US may come under because you suckers love that 360 but the RoW will deliver the goods.

I think Sony are set at 15M for another year or two.
Click to expand...
I don't know, the Japanese market is especially weak, Europe isn't seeing much growth either. US game market still seems to be in the best shape by far.
 
bigtroyjon said:
Revenue will be going up, sounds like they will be selling less high margin items and of course the PSN outage will hurt.
Click to expand...

Yes, the $177m may not be much for the company overall, but it will hurt the division. Also it looks like they are gearing up for a hardware launch and PS3 pricecut. Probably around $100 as well, the gulf looks very large but I expect they will do it very late in the year, maybe November.

Looking at the figures the current trend takes them to around 12.5-13m units by the end of the financial year which leaves a big gap, $50 off would take sales to ~14m, $100 off would take sales to ~15m and higher, but the later they do it the closer they get to the target without undershipping in Q4.

But, I agree with your earlier sentiment, the core of Sony's business is too unprofitable, I mean the CPD made something like $35m operating profit for the whole year on $45bn revenue. This needs to change, fast. Look at this slide:

08_image.jpg


They increased SGA by almost $700m which wiped out the gains made from restructuring and from better margins. There's little sense on one side restructuring like mad and then increasing costs to make up for it...

One hopes it is a one off increase and next year won't see a repeat, but with Sony you never really know...
 
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