Sony Posts Q2 Loss, As PS3 Sales Rise On Price Cut

Cygnus · 11-03-2009, 12:06 AM

The strong yen vs other currencies is hurting sony now...

http://www.gamasutra.com/php-bin/new...hp?story=25879
Sony posted lower revenues and a net loss for its fiscal Q2 on a strengthening yen, as unit sales of PlayStation 3 rose 33 percent year-on-year thanks to a September price cut.

Tokyo, Japan-based Sony said the introduction of the slimmed-down, less expensive PS3 drove hardware unit sales to 3.2 million units during the quarter ended September 30. The company sold 2.4 million units for the same period a year ago.

Analyst Arvind Bhatia with Stern Agee called the quarterly PS3 sales a "positive for the industry, especially in light of Nintendo’s reduced target for Wii hardware sales announced yesterday."

Sony previously said that the new, slim PlayStation 3 sold 1 million units in its first three weeks on the market worldwide.

Despite the spike in PS3 sales, Sony's Networked Products and Services Division, which is home to its games business, saw revenues drop 24 percent year-on-year to ¥352.6 billion ($3.9 billion). Operating loss in the division was ¥58.8 billion ($645.40 million), up from a loss of ¥40.6 billion ($445.63 million) a year ago. Sony attributed the drop to lower Vaio PC and game revenues.

Sony said decreasing sales of the venerable nine-year-old PlayStation 2 were the main driver behind lower game revenues. The company sold 1.9 million PS2s during the quarter, down from 2.5 million a year ago. PlayStation Portable sales were also down, dropping to 3 million sold during the quarter compared to 3.2 million units for the same quarter a year prior.

Sony reiterated full-year PS3 sales of 13 million units, up from 10.1 million units for the previous year. The company also still expects to sell 15 million PSP units this year and 5 million PS2s this year. The company also said it expects to sell 23.9 million PS3 software units this year, up from 21.2 million a year ago; 12.9 million PSP titles, up from 11.8 million; and 11.1 million PS2 titles, down from 23.2 million units.

As a whole, Sony posted revenues of ¥1.66 trillion ($18.46 billion), a 19.8 percent year-on-year decrease. Net loss was ¥26.3 billion ($292 million) compared to net income of ¥20.8 billion ($228.37 million) for the same quarter last year. Sony attributed the lower figures to a "slowdown of the global economy and the appreciation of the yen."

Sony said that it beat its Q2 expectations, and revised its annual profit outlook upward. The company now expects a net loss of ¥95 billion ($1.04 billion), down from a previous net loss outlook of ¥120 million ($1.32 million) for the fiscal year ending March 31, 2010.

KEEBS1984 · 11-03-2009, 12:53 AM

Not a huge surprise. Both Nintendo and Sony are hurting bad since the Yen is doing so strong against the dollar. Or maybe it's that the US dollar is doing so weak against the yen??

So sad.

Pinoy · 11-03-2009, 01:32 AM

No surprise really, strong yen, economic recession, and on top of that the added cost of retooling their manufacturing lines for the slim.

On a brighter note they also said that their loss on the slim model is still within 10-20%'ish, not exactly making profit off the sales of the hardware but definitely losing less per sale at an even lower price point. I think by this time next year they will be profiting on each unit sold.

railven · 11-03-2009, 07:13 AM

We're a second world country!

NOOOOOOOOOOOO!!!!

Haha.

Cygnus · 11-03-2009, 09:32 AM

You laugh now...

Quote:

Originally Posted by railven

We're a second world country!

NOOOOOOOOOOOO!!!!

Haha.

railven · 11-03-2009, 09:37 AM

Quote:

Originally Posted by Cygnus

You laugh now...

You're right, I do!

Cygnus · 11-03-2009, 10:22 AM

Its more of the latter. Japan may have to do what china does to keep their US imports flowing: devalue their currency with the dollar

Quote:

Originally Posted by KEEBS1984

Not a huge surprise. Both Nintendo and Sony are hurting bad since the Yen is doing so strong against the dollar. Or maybe it's that the US dollar is doing so weak against the yen??

So sad.

MikeRox · 11-03-2009, 12:50 PM

Quote:

Originally Posted by Cygnus

Its more of the latter. Japan may have to do what china does to keep their US imports flowing: devalue their currency with the dollar

That doesn't work when it's the dollar losing value rather than the yen particularly gaining value. It's a very tricky scenario to be in.

Personally, I'd just set up a US arm and keep all the monies there

There are calls to drop the dollar as the world currency though as the state of the US economy is causing a lot of problems in other parts of the world. Luckily for the UK, it's economy is even more f**ked, and so our currency's value is dropping in line, if not faster than yours.

railven · 11-03-2009, 01:18 PM

Quote:

Originally Posted by MikeRox

That doesn't work when it's the dollar losing value rather than the yen particularly gaining value. It's a very tricky scenario to be in.

Personally, I'd just set up a US arm and keep all the monies there

There are calls to drop the dollar as the world currency though as the state of the US economy is causing a lot of problems in other parts of the world. Luckily for the UK, it's economy is even more f**ked, and so our currency's value is dropping in line, if not faster than yours.

Recent issues of the losing dollar could also explain why the US is getting no love from Sony. It's all going to EU where they get more in return

MikeRox · 11-03-2009, 02:38 PM

Aye, it's getting quite expensive in the UK because of the Euro holding it's value well. The RRP of PSP games is generally £24.99 on UMD, yet the PSN downloads are £31.99 for titles such as Need for Speed Shift purely to stop Europeans purchasing off the UK PSN

>_<

Chris Gerhard · 11-03-2009, 03:21 PM

Quote:

Originally Posted by Pinoy

No surprise really, strong yen, economic recession, and on top of that the added cost of retooling their manufacturing lines for the slim.

On a brighter note they also said that their loss on the slim model is still within 10-20%'ish, not exactly making profit off the sales of the hardware but definitely losing less per sale at an even lower price point. I think by this time next year they will be profiting on each unit sold.

I don't believe the PS3 will be selling at a profit next year. This is a mature product and further manufacturing cost savings are just not going to be material. It would have been nice if Sony could have only lost $60 per console during the life of the PS3 rather than the $100 - $150 that was lost but that is just billions under the bridge and nothing can be done about it now.

Chris

Pinoy · 11-03-2009, 03:47 PM

Quote:

Originally Posted by Chris Gerhard

I don't believe the PS3 will be selling at a profit next year. This is a mature product and further manufacturing cost savings are just not going to be material. It would have been nice if Sony could have only lost $60 per console during the life of the PS3 rather than the $100 - $150 that was lost but that is just billions under the bridge and nothing can be done about it now.

Chris

I have to say I think you're wrong. Further die shrinks of the Cell and RSX chips will provide a higher yielding manufacturing process, which in turn would lower costs on the PSU and cooling solution. The RAM chips inside are still multiple chip designs and getting these down to single chip version will cost less as well.

That's just from what I've seen. I'm sure Sony can eek out a few more pennies here and there. We shall see...

MikeRox · 11-03-2009, 03:56 PM

Quote:

Originally Posted by Chris Gerhard

I don't believe the PS3 will be selling at a profit next year. This is a mature product and further manufacturing cost savings are just not going to be material. It would have been nice if Sony could have only lost $60 per console during the life of the PS3 rather than the $100 - $150 that was lost but that is just billions under the bridge and nothing can be done about it now.

Chris

The original PS3 losses were actually quite a lot higher than $150 according to a lot of reports they were costing in excess of $800 to manufacture initially.

Cygnus · 11-03-2009, 04:18 PM

The yen is gaining value vs the $ due to the $ losing value thanks to all the money being printed. The $ has been losing value vs many other currencies. china artificially lowers the value of their currency to keep their items cheap in US. US biz is not happy about that either. Obama and other politicians have complained about it.

If $ is no longer world currency, its value will really plummet. Those talks have been going on for a while now. Yeah UK economy is supposed to be just as bad as US, if not worse. UK may get bailed out if it switches to euro...

Quote:

Originally Posted by MikeRox

That doesn't work when it's the dollar losing value rather than the yen particularly gaining value. It's a very tricky scenario to be in.

Personally, I'd just set up a US arm and keep all the monies there

There are calls to drop the dollar as the world currency though as the state of the US economy is causing a lot of problems in other parts of the world. Luckily for the UK, it's economy is even more f**ked, and so our currency's value is dropping in line, if not faster than yours.

Cygnus · 11-03-2009, 04:26 PM

I guess it depends on if there is a PS3 price drop next year, and to what extent the price drop will be. If its price is dropped by $100, it is doubtful the die shrink, cooling, etc cost reductions will justify that much of a price drop without incurring some additional loss on each PS3 sold.

Quote:

Originally Posted by Pinoy

I have to say I think you're wrong. Further die shrinks of the Cell and RSX chips will provide a higher yielding manufacturing process, which in turn would lower costs on the PSU and cooling solution. The RAM chips inside are still multiple chip designs and getting these down to single chip version will cost less as well.

That's just from what I've seen. I'm sure Sony can eek out a few more pennies here and there. We shall see...

11-03-2009, 12:06 AM	#1
Cygnus The Bringer of Balance Join Date: Dec 2004 Posts: 6,838	Sony Posts Q2 Loss, As PS3 Sales Rise On Price Cut The strong yen vs other currencies is hurting sony now... http://www.gamasutra.com/php-bin/new...hp?story=25879 Sony posted lower revenues and a net loss for its fiscal Q2 on a strengthening yen, as unit sales of PlayStation 3 rose 33 percent year-on-year thanks to a September price cut. Tokyo, Japan-based Sony said the introduction of the slimmed-down, less expensive PS3 drove hardware unit sales to 3.2 million units during the quarter ended September 30. The company sold 2.4 million units for the same period a year ago. Analyst Arvind Bhatia with Stern Agee called the quarterly PS3 sales a "positive for the industry, especially in light of Nintendo’s reduced target for Wii hardware sales announced yesterday." Sony previously said that the new, slim PlayStation 3 sold 1 million units in its first three weeks on the market worldwide. Despite the spike in PS3 sales, Sony's Networked Products and Services Division, which is home to its games business, saw revenues drop 24 percent year-on-year to ¥352.6 billion ($3.9 billion). Operating loss in the division was ¥58.8 billion ($645.40 million), up from a loss of ¥40.6 billion ($445.63 million) a year ago. Sony attributed the drop to lower Vaio PC and game revenues. Sony said decreasing sales of the venerable nine-year-old PlayStation 2 were the main driver behind lower game revenues. The company sold 1.9 million PS2s during the quarter, down from 2.5 million a year ago. PlayStation Portable sales were also down, dropping to 3 million sold during the quarter compared to 3.2 million units for the same quarter a year prior. Sony reiterated full-year PS3 sales of 13 million units, up from 10.1 million units for the previous year. The company also still expects to sell 15 million PSP units this year and 5 million PS2s this year. The company also said it expects to sell 23.9 million PS3 software units this year, up from 21.2 million a year ago; 12.9 million PSP titles, up from 11.8 million; and 11.1 million PS2 titles, down from 23.2 million units. As a whole, Sony posted revenues of ¥1.66 trillion ($18.46 billion), a 19.8 percent year-on-year decrease. Net loss was ¥26.3 billion ($292 million) compared to net income of ¥20.8 billion ($228.37 million) for the same quarter last year. Sony attributed the lower figures to a "slowdown of the global economy and the appreciation of the yen." Sony said that it beat its Q2 expectations, and revised its annual profit outlook upward. The company now expects a net loss of ¥95 billion ($1.04 billion), down from a previous net loss outlook of ¥120 million ($1.32 million) for the fiscal year ending March 31, 2010. __________________ Toshiba 57H81 Kenwood VR-616 Comcast DCT6412 III XBox 360 GamerTag Sec0nd2N0n3

11-03-2009, 01:32 AM	#3
Pinoy I'm here for the lulz Join Date: Jan 2008 Posts: 3,635	No surprise really, strong yen, economic recession, and on top of that the added cost of retooling their manufacturing lines for the slim. On a brighter note they also said that their loss on the slim model is still within 10-20%'ish, not exactly making profit off the sales of the hardware but definitely losing less per sale at an even lower price point. I think by this time next year they will be profiting on each unit sold. __________________ SteamID: Pin0y_b0y Speed up your PS3 Network Connection

11-03-2009, 07:13 AM	#4
railven High Definition is the definition of life. Join Date: Feb 2008 Posts: 3,724	We're a second world country! NOOOOOOOOOOOO!!!! Haha. __________________ PERMA BANNED

11-03-2009, 02:38 PM	#10
MikeRox Blu Blu Skies! :D Join Date: May 2007 Location: Huddersfield, United Kingdom Posts: 12,417	Aye, it's getting quite expensive in the UK because of the Euro holding it's value well. The RRP of PSP games is generally £24.99 on UMD, yet the PSN downloads are £31.99 for titles such as Need for Speed Shift purely to stop Europeans purchasing off the UK PSN >_< __________________ REGION B 4TW! Latest HD additions - I Love You Man - 17 Again - Born on the 4th of July - Paul Blart: Mall Cop - Monsters, Inc. HD Movies - Um... Lost count >_< bout 250 Latest Gaming Additions - Mirrors Edge - Scene It BOS - Wartech: Senko No Ronde - Lego Indiana Jones/Kung Fu Panda 2 pack - Silent Hill

11-03-2009, 12:53 AM	#2
KEEBS1984 Loves me some Blu-rays :) Join Date: Mar 2007 Location: Fullerton, CA Posts: 2,261	Not a huge surprise. Both Nintendo and Sony are hurting bad since the Yen is doing so strong against the dollar. Or maybe it's that the US dollar is doing so weak against the yen?? So sad.