Sony reports continued loss, expects games division to remain unprofitable

by Andrew Yoon { May 14th 2009 at 10:30AM }

It's no secret: Sony has lost a lot of money. Unfortunately, the troubled times are far from over for the Japanese conglomerate. Sony is now predicting a 110 billion yen ($1.15 billion) loss for the financial year to March 2010, due to losses at many of its divisions, including PlayStation. Sony has been affected by the recession, with dampened sales of its cameras, phones, and televisions.

The company is aiming to boost its games division, with a 30 percent increase in sales of the PS3, to 13 million units for the fiscal year. However, although Sony plans on selling more PS3 systems, Reuters notes the company expects "its games division to stay unprofitable."

Expecting the games division to stay unprofitable may seem strange in light of lowered production costs and increasing PS3 and PSN software sales. Perhaps, this could be a sign of the oft-rumored price cut. A price drop would help accelerate PS3 sales, while reducing the profitability of the PlayStation brand. However, with a projection as grim as a billion dollar loss, we wouldn't be surprised if Sony holds back on loosening its wallet a bit more.

Tags: business, loss, sales, sony

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Reader Comments (Page 1 of 2)

jamalmoe @ May 14th 2009 10:39AM

I agree, its time for a price cut for the PS3. Also when are playstation cards coming to Canada?

Kspraydad @ May 14th 2009 10:43AM

You have 2 more weeks to wait. EB Games Canada has confirmed late May arrival afaik.

rohan @ May 14th 2009 10:47AM

@Kspraydad:
you have a link when EB Canada said that???

Kspraydad @ May 14th 2009 10:59AM

I have just my personal experience of calling my local EB and the experience of users of my website. Maybe they are lying but they seemed confident in it. Give your local one a call?

Manly Mcbeefington (Mr. ESC) @ May 14th 2009 11:09AM

2 weeks? Hey that's the same thing they have been telling me for the past 3 months.Hopefully you guys get it,in my case I pressume I will have to wait until December and for Home who f*ck*ng knows.

iFester @ May 14th 2009 11:17AM

The manager at my EB Games said they'll be out in June in $20 and $50 cards. Makes sense as I'm sure it'll come up during E3.

coffins outside the door @ May 14th 2009 11:34AM

Whoa. Thanks for the heads-up!

skyzbig @ May 14th 2009 10:39AM

Start your Sony hate.....NOW!!

NaeemTHM @ May 14th 2009 10:44AM

SONY DEFILED MY MOTHER AND POURED SUGAR IN MY GAS TANK!

Manly Mcbeefington (Mr. ESC) @ May 14th 2009 11:00AM

//Hate/SONY BURNED DOWN MY HOUSE AND INFECTED MY PEOPLE WITH THE SWINE FLU AND CAAAPPPSS LOCK VIRUSES!!!

(See this chart,well kids this is the kind of charts you should never,ever show to your stock holders [wink])

Hyams @ May 14th 2009 11:04AM

Sony took out PS2 BC, and then my 60GB died, and they could only replace it with an 80GB, and now I can't play PS2 games on my PS3! =(

Oh wait, are we meant to be saying unrealistic, funny thing? Sorry, my bad.

copa @ May 14th 2009 11:10AM

SONY MADE A LOT OF MISSTEPS THIS GENERATION, AND DRIFTED AWAY FROM THE CONSUMER-FOCUSED APPROACH THAT HELPED THEM TO DETHRONE NINTENDO IN THE MID-NINETIES.

HOPEFULLY, THEY HAVE LEARNED FROM THEIR MISTAKES, AND HAVE IMPROVED THEIR ABILITY TO DELIVER NETWORK SERVICES BY LEARNING FROM WHAT WENT WRONG ON PSN, AND WILL MAKE ENOUGH MONEY OFF BLU-RAY TO KEEP THEM IN THE ELECTRONIC ENTERTAINMENT SPACE FOR YEARS TO COME.

THEN, THEY CAN COME BACK WITH THE PS4 IN A FEW YEARS, AND REIGNITE THE COMPETITIVE LANDSCAPE, CONTINUING A GOLDEN AGE FOR GAMERS WHERE SONY, MICROSOFT, AND NINTENDO ARE COMPETING IN CREATIVE WAYS TO PROVIDE THE BEST EXPERIENCES.

Uh, was that "hate-ey" enough?

Nathan-DTS @ May 15th 2009 10:57AM

@Hyams

My 60gb died and I got a 160gb for £323.87 at GAME. It also came with a code for The Last Guy, GT5P, Ratchet and Clank: Quest for booty and SSHD.

It had been out of stock for ages and when it came back in stock and I ordered it, a minute later it sold out again. A month later the price went up to £425.99

Cosmo @ May 14th 2009 1:03PM

Hyams, what did your 60gb die from, YLOD or Blu-Ray drive? I tell people there's a significant amount of older PS3s at least that have build quality problems and the fanboys go crazy on me.

I thought that Sony would replace your unit with an identical one, even if it had to be another refurbished unit, that does suck to lose the backwards compatibility Hyams.

Sony needs to do what Microsoft did and fix these PS3s for free after the warranty is up, its their own fault for the shoddy built quality, not the consumer.

Brucie B @ May 14th 2009 2:50PM

I Hate My Sony 60"LCD HDTV, The Light Engine went & now I have a Blob of blue & the constellation.
Ohhh PS3, Right My 40G Already got sent in for the BR-Drive, So I upgraded that Bit** to a 320G!

iluvmyzune @ May 14th 2009 2:54PM

Sony get ur shit together, there needs to be a GameCompanysAnonymous or GCA where sony could be sponsored by nintendo

Hyams @ May 14th 2009 3:45PM

Cosmo: Don't think it was either of those.

protofunc @ May 14th 2009 3:48PM

SONY KILLED BAMBI'S MOTHER!!

thinkmore @ May 18th 2009 1:41PM

Would you really kick someone when they're down? Wait, don't answer that...

As a former Sony person, I’m sorry to see / hear about the less-than-enviable financial status of the company. Clearly, this is a passing phase which we will all be glad to see the end of - in the interim, this is probably as good a time as any to revisit some of the highlights of Sony Design :
http://thinkmoreinc.wordpress.com/2009/05/17/81/

TheKarmaPolice @ May 14th 2009 10:40AM

I guess this ISN'T the year of the PS3

tmacairjordan87 @ May 14th 2009 10:46AM

Game wise, it looks like it probably will be. Which is all you or anyone else should care about anyway.

Hyams @ May 14th 2009 10:48AM

Well, they (as in, the gaming division, not the company as a whole) lost half as much money in 2008 compared with 2007.

If it halves again, the gaming division should just about break even for 2009.

copa @ May 14th 2009 10:55AM

Hey, that's right!

And if they continue to half their losses in every subsequent year, then they will break even in...

Oh, shit.

Hyams @ May 14th 2009 10:58AM

XD

I'm so dumb.

Sorry, I meant if the loses reduce *by the same ammount*, not if it halves again.

Hyams @ May 14th 2009 11:44AM

Why was tmac ghosted? He makes a very fair point - the PS3's line up of games is looking very strong so far, and really, when it comes down to it, that's all that matters to us gamers.

tenor77 @ May 14th 2009 12:13PM

Yeah, in the end games are the most important to us at least. I'm not a PS3 fan either. Personally I'm not wowed by the lineup but I know a lot of people are.

Anyway I thought I'd point out that the last bar is their "projected" loss for this year. That means jack and or squat honestly.

tmacairjordan87 @ May 14th 2009 12:19PM

I don't know why either, cause that's the straight up truth. Microsoft has like 3 exclusives this year and Nintendo doesn't really have anything that noteworthy like Brawl and Mario kart last year. Right now, Sony really does have the best lineup for this year on console and handheld.

Chris D.(PSN: Aggie_CEO | XBL:The Aggie CEO | Steam: Aggie_CEO @ May 14th 2009 12:32PM

Hyams you know the xBots are running rampant....lol

Chris D.(PSN: Aggie_CEO | XBL:The Aggie CEO | Steam: Aggie_CEO @ May 14th 2009 12:21PM

Hyams you know the 360fanboys are running rampant....lol

TheKarmaPolice @ May 14th 2009 1:00PM

Irony:
Calling someone an Xbot and, later, a fanboy

Billop @ May 14th 2009 10:41AM

Okay, so when microsoft report a loss Joystiq dont report. But when sony report one they are all over it.

TheKarmaPolice @ May 14th 2009 10:43AM

don't supply a link or anything that might support your claim, that would be madness

NaeemTHM @ May 14th 2009 10:49AM

I know right! Remember the time they totally didn't report Microsoft lost 1.9 billion?

Oh wait:

http://www.joystiq.com/2007/07/20/xbox-division-has-1-9-billion-loss-blame-red-rings/

Or the time they didn't report on Microsoft entertainment devision bleeding money...waitahminute:

http://www.joystiq.com/2005/07/25/microsoft-entertainment-division-still-losing-money/

Quit being a whiny baby.

God damn I hate fanboys.

marvin69 @ May 14th 2009 10:59AM

Microsoft reports a loss and they cut people/product.
Sony reports a loss and they don't do anything other than spin, spin, spin.

Micrsoft as a whole is a very stable stock/company. Windows 7 could be a home run later this year.
Sony backed an expensive media change during the largest rescission in history. Plus they don't have the best electronics any more even if they are priced at a premium. Sony is in trouble on many fronts.

Microsoft is a blue-chip stock.
Sony is a stock you sell short.

Vidikron @ May 14th 2009 11:05AM

"Microsoft reports a loss and they cut people/product."

Actually, they reported overall quarterly profits measured in billions and cut people.

Chris D.(PSN: Aggie_CEO | XBL:The Aggie CEO | Steam: Aggie_CEO @ May 14th 2009 11:12AM

@Marvin...LARGEST RECESSION IN HISTORY?!?!?!?

Ummm What Soup line are YOU standing in??

TregGert @ May 14th 2009 11:21AM

He does have a bit of a point... Not in the sense of posting actual company losses, but when Sony laid off a chunk of employees last holiday season it was here on Joystiq/IGN/etc.

When MSoft laid of a chunk of employees this month so they could build a bridge:
http://gizmodo.com/5241511/microsoft-lays-off-1200-more-employees
Or the fact that those layoffs are in the wake of a drop in revenues, it wasn't.

I am not exclaiming Joystiq is biased, I am saying when I read tech news on other sites, it seems like Sony's bad business situations always end up on these gaming sites, yet a fair share of MSoft's bad business situations don't end up on the likes of IGN/Joystiq/etc. So I do understand the sentiment...

Some of this, as well as some of Nintendo's recent financial woes, have less to do with the gaming climate though and more to do with the fact that Japan (you know... where those two companies are located) is in worse condition than we are, yen is down big-time, and the Japanese economy is suffering as a result.

Bobby S. @ May 14th 2009 11:23AM

I like how the links are from 2005 and 2007

NaeemTHM @ May 14th 2009 11:33AM

TregGert seriously...what are you smoking?

http://www.joystiq.com/2009/05/06/microsoft-continues-layoffs-massive-allegedly-hit-the-worst/

http://www.joystiq.com/2009/05/05/second-phase-of-microsoft-staff-cuts-start-today/

Quit trying to make my beloved Joystiq look bad.

Reuben @ May 14th 2009 1:00PM

I really wish you would think, and then possibly research what you want to say before you actually post it.

Kspraydad @ May 14th 2009 10:42AM

So...since the intro of the PS3 they have been profitable overall (based on the graph).

Increasing sales in the PS3 and PSP divisions, increasing software sales on the PS3 too.

What all of Japan REALLY needs is a stronger dollar and pound...that is what is killing them.

BTW...dear Joystiq, since the redesign your site is KILLING me (hanging up on shockwave and scripting errors +50% of the time) on Google Chrome and the PS3 browser. UGH.

Storm Eagle @ May 14th 2009 10:46AM

Firefox FTW

Andy @ May 14th 2009 10:54AM

Actually, Firefox + AdBlock Plus FTW

copa @ May 14th 2009 10:59AM

"So...since the intro of the PS3 they have been profitable overall (based on the graph)."

Turn your monitor upside-right.

Kspraydad @ May 14th 2009 11:03AM

@copa...

I'm looking at total profit for the last 4 bars on that graph...overall profit is still positive since the intro of the PS3 sinkhole. SONY's sales have been on par with the X when comparing launch periods...SONY's whole issue is one affecting all Japanese companies (see Toyota as an example) the YEN is too strong against the weakass dollar and pound. Unfortunately for SONY they can't do anything about it. (for more examples see NIN raising the wholesale price of the Wii in England)

Chris D.(PSN: Aggie_CEO | XBL:The Aggie CEO | Steam: Aggie_CEO @ May 14th 2009 11:15AM

yea man.....people dont want to acknowledge that....the Japanese YEN is getting STRONGER against the US Dollar and since the US is damn near the Top importer of Japanese products then it would stand that ALL Japanese companies that ship mostly to the US would suffer a massive loss.....Hell TOYOTA had it FIRST loss EVER in its 50+ year HISTORY!!! But you dont hear anyone saying "Toyota sucks and I hope GM Beats their ass!!"

copa @ May 14th 2009 11:27AM

No, it's an excellent point. Sony is a $100 price cut away from getting back in the game, and the weak dollar prevents them from making that move.

That being said, Sony began their insane $600 pricing strategy before these currency woes began.

David @ May 14th 2009 11:39AM

The PS3 has yet to see a year-on-year increase in sales in any one month this year, and did not see one last November or December. Things could change but as they are now, without a price drop, they probably won't be able to sell more than they did in 2008. Even Killzone couldn't generate enough sales to top 08, and the biggest game of the month then was Army of Two. There is little if any reason to think the PS3's fortunes will change this year unless Sony makes a move.