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)

Wow...I almost bought that "Stupid Piece Of Shit" as well. :P

@TheKarmaPolice
http://news.sky.com/skynews/Home/Business/Global-Recession-Japanese-Electronics-Firm-Sony-Posts-First-Annual-Loss-In-14-Years-680-Million/Article/200905215281543?lid=ARTICLE_15281543_GlobalRecession:JapaneseElectronicsFirmSonyPostsFirstAnnualLossIn14Years£680Million&lpos=searchresults

A price drop will increase the PS3 sales resulting in lower revenue, however, it should make them more money in the long run with PSN sales.

I have no hate for Sony. I want them to be competitive wtih MSFT and NTDOY. Having owned a PS3 now for a couple of years, it was definitely a VERY forward looking machine that just game around at the wrong economic climate. The BR player is top notch and games made for the hardware are amazing. Its too bad their software engineering is 3rd tier and their services division is practically non-existent.

MSFT wins my time because of Live mostly.

Remember though people, this is for Sony as a whole, not just the gaming division.

In fact, the gaming division did better 2008 than 2007, despite far weaker PS2 sales (both hardware and software).

http://i41.tinypic.com/2vccj9l.jpg

As you can see, losses were cut by just over half, even though PS2 software and hardware fell by over 40%. PS3 hardware saw only a smallish increase (10%), but a very large increase in software (80%).

The 2009 fiscal year for their gaming division should (in theory - if this keeps up) actually make them money.

maybe if they get PS3 production cost down far enough as well as do a price cut....otherwise I'm shooting for next year when the Gaming division starts to carry its own weight again

If they just keep on reducing costs like they did last year, plus improve on PS3 software sales (done - lots of good games coming this year), plus improve on PSP sales (done - new games coming) and PS2 sales (done - price cut, and new games coming), then they should make a profit, I think.

yea they should as long as they get the PS3 price down it should be straight....one thing is certain....its the major thing keeping profit down...lol

Yeah. If it weren't for the PS3, Sony would be doing a lot better.

Really, they were stupid forcing the blu-ray player into it. It's given little benefit, and forced the price of the PS3 up way too high.

yea that was risky...but its just like Sony to push their formats.(Even tho BD TECHNICALLY isnt JUST Theirs) LUCKILY this bargain will pay off in the long run. Its just a shame it has hurt a lot of possible PS3 owners...if PS3 games had stayed on DVD-9's sure we would have had 3-4 discs for MGS4 and other games, but the PS3 would have LONG since hit $299

What dya rekon, £150 PS3 this year?

/wishfull thinking

Does it really matter if Sony lose a measly 1.15 billion dollars? I bet they still floss with money from when they made the walkman.

Sony just need another revolutionary product like the walkman.

another Billion lost....Sir Stringer is going to have a job on his hands....I'm guessing that Sony wont get profitable again until 2011 or late 2010. They cant afford to lose another billion but at least they can stay afloat if they lose another 5 and then build it back up....

Hopefully Sony can come out strong from E3 this year. They do have some good software in the pipeline that should generate some nice royalties. Whether you're a Sony fan or not, healthy competition in the marketplace is good for the consumer.

Once the American Dollar recovers some, they should be a little more profitable... or a little less unprofitable!
Anyway, how can the gaming division not be making money on a $400 console with $70 games while charging $2 for a "costume". jeepers...
Aside from these announcements, the PS3 game line up still remains the strongest of any console this year. Time to harp on people to purchase one! If inFAMOUS doesn't do it, which looks to be an absolute Gem, I'm not sure anything will.

It's time for Sony to cut it's game division... So the Dreamcast 2 can rise from the ashes and SEGA can return to it's console glory!!!!

I want SEGA to return also but I want it to take Microsofts place.I want it to be Nintendo,Sony and Sega once again like the good old days.

ROFLMAO!!!!

They are making more money as a publisher than they would as a platform again....even tho I still play my Dreamcast to this day....

Let the record show that sony did not have a console yet in "the good ol' days".

Didn't know they did that bad in the 08-09 fiscal year. Damn.

my wallet is experiencing a loss, too. joystiq, feature a story on me. for really real. this is no joking matter, no sarcastic matter!

this will all pan out once heavy rain floods and drowns us all in impression.

Why are you linking me this?
Was this because of my reply towards Billop? Cause I was talking to him...as shown by my text being directly below him

god damn this commenting system sometimes....

The above was a reply to scott from the other page

I thought they might actually turn it around very early this fiscal year. Damn, what can they do?

Yeah Sprinkles, those holier than thou Sony fanboys should enjoy 3rd place this generation right?

Oh Sprinkes, you 23 year old loser you.

Sony needs an intervention on how not to lose money. Nintendo can sponsor it!

i see online charges

I think the weakening Yen is mostly to blame here. I'm not sure about the other divisions under the Sony name, but PlayStation seem to be doing everything right. They have an unrivaled software line up for 2009 and beyond, and if they mange a price cut they'll expand there user base by quite a bit. I think they just need to ride out the crappy economy like the rest of us.

Yes we all love Sony and their brilliant, forward thinking ideas. Just like HDMI. Did you know HDMI 1.4 will be out soon? http://www.engadget.com/2009/05/14/hdmi-1-4-brings-internet-sharing-dreadful-tiers-of-quality/ Read the 2nd comment

Isn't just like Sony to release an unfinished product! http://www.hdmi.org/manufacturer/index.aspx

Don't forget about those Sony lies like dual HDMI output for the PS3! No wonder Sony is hurting so badly.

Great, so you link us to the fact that Sony also developed the HDMI cable, which is also currently a standard on the 360 systems, and then link to an article where the technical research conducted was to demonstrate the evolution of the component to HDMI and subsequently the DVI to DisplayPoint.

Go back to your cave. Seriously.

@mahouneko

I think you need to crawl back under the rock where you came from. You need better reading comprehension. Sony developed the HDMI, and then continues to make past versions obsolete. You like purchasing obsolete items? I don't. What a moron you are. Just like Blu-ray wasn't finished when they launched it. You're a douche.

OMgosh no way dude I just cant wait!

RT
www.whos-watching.net.tc

We're in a recession, some charts are going to look bad, oh well.

I'm not surprised Sony's gaming division is flailing. They couldn't even deliver PS9 like that commercial promised a few years ago. Remember? A guy injects an orb of energy directly into his head and he's playing the game virtual-reality style? Yea. Where the F is THAT, SONY? False promises = poor sales.

my 40 gig ps3 broke and my friends 60 gig broke twice, this happend with the ps2 for us both but the diff is we aren't buying replacements again.

I am glad it seems no one else is doing the same.

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Sony reports continued loss, expects games division to remain unprofitable

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