Sony reports continued loss, expects games division to remain unprofitable

by Andrew Yoon on May 14th 2009 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.

Source

Tags: business, loss, sales, sony

Reader Comments (85)

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

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

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

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?

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.

Whoa. Thanks for the heads-up!

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

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

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.

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?

@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

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.

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!

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

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

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/

I guess this ISN'T the year of the PS3

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

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.

Hey, that's right!

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

Oh, shit.

XD

I'm so dumb.

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

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.

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.

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.

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

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

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

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

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

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.

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.

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

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

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

Ummm What Soup line are YOU standing in??

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.

I like how the links are from 2005 and 2007

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.

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

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.

Firefox FTW

Actually, Firefox + AdBlock Plus FTW

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

Turn your monitor upside-right.

@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)

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!!"

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.

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.

Weird how people are agreeing yet the comment is downvoted.

Site works fine in Chrome/Vista for me, every time.

Get it together Sony...

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/

http://www.youtube.com/watch?v=8AyVh1_vWYQ

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Sony reports continued loss, expects games division to remain unprofitable

Reader Comments (85)

Posted: May 14th 2009 10:39AM (Unverified) said

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