Sony Sells More PS3s, Makes Less Money

Sony Financial Results

Sony has posted its financial results for the second quarter of 2011, which ended September 30. Sales for both the PlayStation 3 and the PlayStation Portable increased over the previous quarter. However, Sony’s Consumer Products and Services division, responsible for the PlayStation and PSP, posted a drop in sales revenue and an operating loss.

Sony is the latest in a string of Japanese games companies to post disappointing financial results for the previous quarter, following Nintendo's massive losses and SEGA Sammy's 83% decline in profits. Nevertheless, Sony sold 3.7 million PlayStation 3 units during second quarter, an increase of approximately 200,000 units from 3.5 million in Q2 2010. Sales of the PSP totaled 1.7 million, up from 1.5 million, and the PlayStation 2 sold 1.2 million units, down from 1.5 million in Q2 2010.

Considering the hardware sales, it's unsurprising that PS3 software sales were also up by approximately 2.1 million games, from 35.3 to 37.4 million. Somewhat more surprising is that PSP game sales declined by almost 3 million units, from11 million in Q2 2010 to 8.1 million for the most recent quarter. The venerable but aging PS2 also posted a software decline, from 5.6 million to 2.8 million games.

The aforementioned Consumer Products and Services division of Sony, also responsible for televisions, video, digital imaging, personal computing and mobile businesses, posted an operating loss of 34.6 billion yen (£277 million, $442 million) for the quarter, compared to a 1 billion yen (£8 million, $12.8 million) profit in the same quarter of the previous fiscal year.

The same division also saw sales revenue drop 12.3 percent year-over-year to 779.7 billion yen (£6.2 billion, $9.9 billion). As a company, Sony’s revenue declined 9.1 percent to 1,575 billion yen (£12.6 billion, $20 billion), while the company fell considerably from last year's 31.1 billion yen profit (£249 million, $397 million) to a net loss of 27 billion yen (£216 million, $344 million).

Sony made an official statement on its quarterly numbers:

"This was primarily due to a decrease in LCD television sales, reflecting price declines due mainly to deterioration in market conditions in the US and Europe and unfavorable foreign exchange rates, lower PC sales reflecting price competition, a decline in sales of the game business, reflecting a strategic price reduction of PlayStation hardware in advance of the year-end holiday season, as well as a decrease in sales of compact digital cameras resulting from lower unit sales due to a slowdown in market growth and unfavorable foreign exchange rates."

Funny, no mention whatsoever of declining investor confidence in the company, or security breaches stemming from the PSN outage earlier this year, which Sony moved at glacial speeds to correct.

The good news for Sony, though, is that the PS3 has nearly caught Microsoft’s Xbox 360 in total lifetime sales, 56 million to 57.3 million respectively. Sales of the PS3, which launched nearly a calendar year after the Xbox 360 in North America and 16 months afterwards in Europe, still lag behind the Xbox 360 considerably in North America, but the gap has closed in other countries, particularly Japan.

One thing is certain for Sony: in the current economic climate, the company can ill-afford to launch its next console a calendar year after Microsoft (rumors, in fact, suggest the PS4 may launch before Xbox Next). And while Sony may never admit it, the aftershocks of the PSN outage earlier this year were surely felt in the operating losses just posted.

Game Ranters, is this news trouble for Sony? Are you concerned about the future of the PlayStation platform?


Follow me on Twitter @mattrowland1

Source: CVG

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