Sony quarterly profits up despite gaming div. losses up

**PFC5** · 07-26-2007, 03:25 AM

Here is the link:

http://biz.yahoo.com/ap/070726/earns...sony.html?.v=3

Quote:

TOKYO (AP) -- Sony said Thursday its April-June net profit more than doubled to 66.46 billion yen ($551.5 million) from a year ago on solid sales of flat-panel TVs, digital cameras and video camcorders.

But the Japanese electronics and entertainment company said its game operations were still in the red because of strategic pricing of the PlayStation 3 video game console below production costs. The PlayStation 3 has been struggling against the Wii from rival Nintendo Co., which reported Wednesday that quarterly earnings soared fivefold.

Sony Corp. said it sold 710,000 PlayStation 3 machines worldwide for the quarter, selling 4.3 million since it went on sale late last year in Japan and the U.S., and in March in Europe. It's targeting selling 11 million PS3 machines for the fiscal year through March 2008.
Operating losses in gaming deteriorated to 29.21 billion yen ($242.4 million) for the latest quarter, worse than the 26.80 billion yen loss racked up the same period a year ago.

Overall quarterly sales jumped 13.3 percent to 1.977 trillion yen ($16.41 billion) from 1.744 trillion yen the previous year. Sony had earned 32.29 billion yen the same period a year earlier.
Tokyo-based Sony, which also has sprawling entertainment businesses, also got a boost in its movies division from the successful worldwide theater reception for "Spider-Man 3."

A weak yen, which tends to lift the value of overseas earnings for Japanese exporters, also helped, Sony said in a statement.
Sales in Sony's core electronics sector climbed 11.6 percent, on strong demand for Cyber-shot digital cameras and Bravia liquid-crystal display TVs, which offset declining sales of rear-projection and conventional TVs.

In the electronics division, quarterly operating profit, or sales minus expenses and cost of goods sold, surged 77.3 percent from the previous year.

Sony also got an equity boost from positive results at Sony Ericsson, its mobile phone joint venture with Sweden's LM Ericsson, the world's largest maker of wireless networks. Sony Ericsson is seeing ballooning sales, up 59 percent on year at 24.9 million handsets.

The equity boost, which figures indirectly into Sony earnings because it owns stakes in these companies, was smaller from its music joint venture Sony BMG Music Entertainment, where Avril Lavigne's "The Best Damn Thing" and R. Kelly's "Double Up" were best-sellers.

How the hell are they going to sell 11 million PS3s this year when they cannot even sell 1 million per quarter? Afterall, there are only 4 quarters in the year and if you triple the Holiday quarter that still leaves them at only half the stated "projection".

Are the Sony execs on crack? Or do they just think the shareholders are on crack?

MikeRox · 07-26-2007, 08:29 AM

They expect the $100 price cut to equate to solid "double" sales throughout the year, so expect sales of the first quarter to go up six fold over the winter months.

It's achievable means they also expect to be in 3rd place next year though.

strawberry · 07-26-2007, 10:39 AM

Quote:

Originally Posted by PFC5

How the hell are they going to sell 11 million PS3s this year when they cannot even sell 1 million per quarter? Afterall, there are only 4 quarters in the year and if you triple the Holiday quarter that still leaves them at only half the stated "projection".

Their fiscal year runs through March of 08. Still a mighty lofty goal to get to 11 million by then- but they will see a spike for the holidays, and they'll also see the worldwide release of MGS4 in Feb/March of '08- which will drive a lot of sales.

**PFC5** · 07-26-2007, 12:35 PM

I tripled the sales for the holidays, but even then they would come up with only half the target unless they also doubled the sales every quarter also.

I have money the won't be within 3 million of the target. Any takers?

strawberry · 07-26-2007, 12:56 PM

That 3 million number is a pretty good over/under. I'm not touching that bet, sir.

Thus far, the PS3's sales have tracked very closely to those of the 360 during its first 8-9 months- it's almost uncanny when you look at the two side-by-side. If that trend holds- Sony won't be sniffing the 11 million mark until about this time next year.

Lee Stewart · 07-26-2007, 02:29 PM

Quote:

Originally Posted by PFC5

I tripled the sales for the holidays, but even then they would come up with only half the target unless they also doubled the sales every quarter also.

I have money the won't be within 3 million of the target. Any takers?

Sure . . .here is my stake . . . .

MikeRox · 07-26-2007, 03:04 PM

Quote:

Originally Posted by strawberry

If that trend holds- Sony won't be sniffing the 11 million mark until about this time next year.

I think it depends on pricing personally. $399.99 RRP in the US, £299.99 RRP in the UK etc, and I can see them easily meeting it. But at the current RRP, US sales dropped off by 5000 (from 50,000 to 45,000) within a week of the price drop kicking in, if that rate continues, they'll be back to where they were pre price drop within 2 months.

Lee Stewart · 07-26-2007, 03:46 PM

Found this as an explaination for some of the "profits" Sony made:

In the Electronics segment, operating income increased 77.3% compared to the same quarter of the previous fiscal year. This was primarily due to a positive impact from the depreciation of the yen versus the U.S. dollar and the Euro, as well as an increase in sales of semiconductors to the Game segment. In the Game segment, the operating loss increased primarily due to the loss arising from strategic pricing of PS3 at points lower than its production cost.

From the Sun-Sentential on Florida - sub article. And wall Street had a terrible day - 2nd worse since 2/27. Sony stock is down to $50.53

junehhan · 07-26-2007, 03:50 PM

Quote:

Originally Posted by strawberry

Their fiscal year runs through March of 08. Still a mighty lofty goal to get to 11 million by then- but they will see a spike for the holidays, and they'll also see the worldwide release of MGS4 in Feb/March of '08- which will drive a lot of sales.

Wasn't that game slated for 2007, or did it get pushed back? I remember seeing a 2007 release date in that one trailer released a month ago. I still have my doubts on how big a boost will be on a $500 gaming console.We saw how X360 sales really took off last holiday season at a price of $400 and things could be more interesting since Microsoft will have not just 1 or 2, but many AAA gamings hitting at or before the holidays.

strawberry · 07-26-2007, 04:01 PM

Quote:

Originally Posted by junehhan

Wasn't that game slated for 2007, or did it get pushed back?

It was announced as a worldwide release for early 2008 at E3. Feb or March is the current timeframe.

Quote:

Originally Posted by junehhan

I still have my doubts on how big a boost will be on a $500 gaming console.We saw how X360 sales really took off last holiday season at a price of $400

Sales of the PS3 to this point have tracked almost exactly like those of the 360 during its first 8 months, and for most of that duration, the PS3 was a $600 console. And- yes- MGS4 will sell systems when its released.

Will it help them get to 11 million by the end of March? I'm thinking no.

MikeRox · 07-26-2007, 04:27 PM

Has the Xbox 360 already had a price cut in the US then? Or was the sales boost sarcastic?

Is MGS4 having a simultaneous world wide release then? Usually it arrives in Europe about 5-6 months after it's launched in the US. Mind you, the flood gates to importing would happen this time around if it didn't, what with the PS3 gaming side being region free. Have to give Sony mega big props for that

, shame they then went and spoilt it by throwing a hissy fit at online retailers importing to the EU.

strawberry · 07-26-2007, 04:39 PM

Quote:

Originally Posted by MikeRox

Has the Xbox 360 already had a price cut in the US then? Or was the sales boost sarcastic?

Don't know if June was being sarcastic. The reason the 360 saw a sales spike in holiday '06 was because......it was holiday '06. All 3 consoles will spike big-time during 4Q- that's how it works.

Quote:

Originally Posted by MikeRox

Is MGS4 having a simultaneous world wide release then?

Yes. The trailer at E3 revealed that the game will release simultaneously worldwide.

MikeRox · 07-26-2007, 05:42 PM

Thats excellent news (MGS4) hopefully more developers will start to follow suit and stop treating europe like scum of the earth.

MikeRox · 07-30-2007, 04:27 AM

Sony attribute their lower than expected losses to the PS3 doing nowhere near as well as expected.

http://kotaku.com/gaming/sce-financi...oss-283666.php

The_Omega_Man · 07-31-2007, 03:23 AM

Quote:

Originally Posted by MikeRox

Sony attribute their lower than expected losses to the PS3 doing nowhere near as well as expected.

http://kotaku.com/gaming/sce-financi...oss-283666.php

So does this make the PS3 both a Technological dream AND a financial Boat Anchor?

07-26-2007, 12:35 PM	#4
PFC5 Super Moderator Join Date: May 2005 Posts: 28,355	I tripled the sales for the holidays, but even then they would come up with only half the target unless they also doubled the sales every quarter also. I have money the won't be within 3 million of the target. Any takers? __________________ Denon AVR-887 Klipsch RP-5 Pwred Towers (mains) (525 watts peak each 12"Subs) All Klipsch RC-25(ctr),(2)SS1(surr),(2)SS1(rearSurr) Toshiba (2)HD-A20,PS3,BD35 For SACD/DVD-A Samsung HD-841 Panny 50pz80u plasma SETTINGS RCA HD50LPW162 50"DLP w/HD2+ SA 3250HD 47" LCD+Yamaha5790+HD-A1(bedroom) Harmony 680 + (2) 670s (amazing remote/support) Game room with Onkyo receiver & B&W Speakers The_Cable_Game Take the high ground and be happier

07-26-2007, 12:56 PM	#5
strawberry HD is the Lord. Join Date: Apr 2005 Location: Lawrence, KS Posts: 1,635	That 3 million number is a pretty good over/under. I'm not touching that bet, sir. Thus far, the PS3's sales have tracked very closely to those of the 360 during its first 8-9 months- it's almost uncanny when you look at the two side-by-side. If that trend holds- Sony won't be sniffing the 11 million mark until about this time next year. __________________ Home Theater Setup ISF-Calibrated Hitachi 57S500 HDTV Denon 2807 AVR 7.1 JBL Venue Series Speaker System Toshiba HD-A1 PS3 60 Gig Xbox 360 Premium Moxi BMC 9022 DVR Logitech Harmony 880

07-26-2007, 03:46 PM	#8
Lee Stewart Behold - the future! Join Date: Jan 2007 Location: Albuquerque, NM Age: 58 Posts: 25,188	Found this as an explaination for some of the "profits" Sony made: In the Electronics segment, operating income increased 77.3% compared to the same quarter of the previous fiscal year. This was primarily due to a positive impact from the depreciation of the yen versus the U.S. dollar and the Euro, as well as an increase in sales of semiconductors to the Game segment. In the Game segment, the operating loss increased primarily due to the loss arising from strategic pricing of PS3 at points lower than its production cost. From the Sun-Sentential on Florida - sub article. And wall Street had a terrible day - 2nd worse since 2/27. Sony stock is down to $50.53 Last edited by Lee Stewart; 07-26-2007 at 03:49 PM.

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07-26-2007, 08:29 AM	#2
MikeRox Blu Blu Skies! :D Join Date: May 2007 Location: Huddersfield, United Kingdom Posts: 12,416	They expect the $100 price cut to equate to solid "double" sales throughout the year, so expect sales of the first quarter to go up six fold over the winter months. It's achievable means they also expect to be in 3rd place next year though.

07-26-2007, 04:27 PM	#11
MikeRox Blu Blu Skies! :D Join Date: May 2007 Location: Huddersfield, United Kingdom Posts: 12,416	Has the Xbox 360 already had a price cut in the US then? Or was the sales boost sarcastic? Is MGS4 having a simultaneous world wide release then? Usually it arrives in Europe about 5-6 months after it's launched in the US. Mind you, the flood gates to importing would happen this time around if it didn't, what with the PS3 gaming side being region free. Have to give Sony mega big props for that , shame they then went and spoilt it by throwing a hissy fit at online retailers importing to the EU.

07-26-2007, 05:42 PM	#13
MikeRox Blu Blu Skies! :D Join Date: May 2007 Location: Huddersfield, United Kingdom Posts: 12,416	Thats excellent news (MGS4) hopefully more developers will start to follow suit and stop treating europe like scum of the earth.

07-30-2007, 04:27 AM	#14
MikeRox Blu Blu Skies! :D Join Date: May 2007 Location: Huddersfield, United Kingdom Posts: 12,416	Sony attribute their lower than expected losses to the PS3 doing nowhere near as well as expected. http://kotaku.com/gaming/sce-financi...oss-283666.php