Sony Posts Major Financial Year Losses

Sony has posted a 68% fall in operating profits for the financial year primarily due to large losses in its games division. It also reported its largest quarterly losses in four years.

Sony announced operating profit of 71.75 billion yen ($596.8 million) for the year ended March 31, down from 226.42 billion yen ($1.88 billion) a year earlier.

The poor financial results stem mainly from the huge costs associated with the launch of the PlayStation 3, and specifically the company's decision to sell the console at a large loss per unit. According to Sony's annual report, "In the Game segment, there was a significant operating loss as a result of the sale of PS3 at strategic price points lower than its production cost during the introductory period." Sales of the console have not been overwhelming either - it has been outsold by Nintendo's Wii by two to one since its release in November 2006.

[Observer]

begun have the flame wars !

[gta_cb]

yoda! your back =D

[rusgreim]

...going to get any better this holiday season when competing with the jugernaut that is Halo 3. After the H3 billboard, television, and movie trailer campaign, the PS3 will be the ultimate butt of every gamers joke. Think Dreamcast.

I can't wait to see all the fanboys point and say "but we have MGS4 and FFXIII coming out..... sometime."

Bwa ha ha!!!

And for the record, before anyone says it, it doesn't matter if H3 is overblown or overhyped of failes to live up to expectations, 6-8 million people will be buying it and playing it. Thats all that matters. People are still playing H2 online, 2.5 years later. Show me a PS2 game people are still playing online.... oh wait....

[LSDARBY]

Get a grip on reality pal

[bootsielon]

FFXI is still played on PS2s after 5 years, you Moron.

And by the way, Halo is not the end all be all of gaming. It'll shift 360s, but that's not the only thing people want. Not everyone is a hardcore FP shooter fan.

[shikwan]

Price cuts for the PS3 just ain't gonna happen! To bad, so sad, don't be mad...PS3 a fad? Ken Kutaragi yo' dad?

[Capt CHAOS]

Too much something coarsing through your veins... Very funny!

[solidt12]

This just means that next year they will have record growth.

[rusgreim]

Keep telling yourself that... maybe it'll come true!

[Boink]

sony stated they do not expect to see profits from the ps3 till 2010/2011.

[Xi]

is that because it cant get any worse?

[BrainDead]

Im a gamer. Not a sad fanboy.

[gta_cb]

omg someone disagreed!
so does this mean you are?

[solidt12]

@ rusgreim

People are still playing MGS3, SOCOM, and FFXI online on the PS2 years after there release.

[gta_cb]

same with both consoles especially with Halo 2
from Bungie.net
"30,956 Players Online in Halo 2"

and already
"31,544 Halo 3 Games (Last 24 Hours)"

you got to admit, thats pretty impressive especially with it not being a weekend. oh and the halo 3 games, really good soon as tho people like me with Crackdown havnt got it yet.

[Black Republican]

on the positive side - good thing the ps3 is going to have a 10year life span because they will make the money back eventually everyone knows this
unless the ps3 flops which is highly doubtfull

i am sure everyone expected the ps3 to do better (from fans/users to all of sony)right from launch ppl had the false expectation for it to kill everything

only time will tell, all i can say is that this gen the ps3 won't have the same success as the ps2

[kewlkat007]

be profitbale, unless your a stubborn fanboy.

Out of all of this it's still a battle of strategies. At what cost, have SONY, under delivering early on(in the mind of most gamers, even I), have helped the competition?

Sony will still lead this Generation, just not like the PS2. Every console will get a share of at least +30% and that's good enough for everybody. Unless you just some fanboy that plays one console, and have a problem with people enjoying the same games you do on their platform of choice.

So after all is said and done

1.Wii - Get people of all ages to play videogames, regardless of SPECS(GOAL SET)

2.XBOX360 - Gains Market-share/establishes it's brand name, now is a major player.(GOAL SET)

3.PS3 - The Market Leader, Tries to win back casual gamers much later with games and tries to prove their future-proof console is much needed.

EXCLUSIVEs slowly die... and all 3 console makers start working on the their NEXT CONSOLE. I know SONY will be super late. Wii will be forced to go HARDCORE with its HARDWARE in 5 years.

Of course Console SPECS help developers dream of what it possible, but doesn't mean every DEVELOPER will be created EQUAL.

[Keyser]

Yeah, this will hurt the same way it hurt when the PS2 launched. Sony has already cut its production costs so as more PS3's sell the impact won't be as substantial.

This is all part of the business plan that was handed out at the shareholders meeting this may only be a surprise to those who are unfamiliar with busness and manufacturing practices. The real money is in the software played on the hardware not necessarily the hardware itself.

Halo 3 will kill Sony the same way Halo 2 killed Sony, not at all. A lot of people who own 360's will buy Halo. It will sell well and will spur people to buy 360's, no doubt about it. In all Halo's greatness, its still Halo. It's not new, it doesn't bring a new aspect to FPS's than Halo 2 did. Better graphics, new boards, more weapons, but the same gameplay. If you liked it before you're going to like it even more now but if you weren't into it before there is nothing about it that is going to make you want to "jump in". It's Halo, that's good, and that's bad.

This article is not about Halo though, as the Sony finishes it's launches around the world their focus will be on software. As with the launch of every console known to man, the number of software titles begin to pick up near the end of it's first year. The PS3 is at the 6month mark (30games) so it has some time to go before the software begins to pick up.

By software I mean PS3 and Bluray. With the release of some more coveted titles on bluray you'll see Sony's profits go way up. A lot of PS3 owners will purchase bluray versions of 300 and to Sony that's just as good as people buying Motorstorm.

Sony has a double barrel shotgun, with bluray and the PS3 software. Either way it's a win for them. They will see very nice profits during the Christmas season with sales of bluray and PS3 software.

[kewlkat007]

SONY had like 70% MARKET-SHARE with the PS2 when it came out, and was not forced to make a PRICE-CUT after a year. Yes they knew it would eventually sell because of all the gamers that had a PSone, and all the EXCLUSIVE games it had mustered.

With the PS3, YES it will sell because there is still a lot of people with plenty of PS2's. The only thing that is different now is, there is much better competition.

1.Sony has already lost Market-Share to people buying Xbox's and Wii's.
2.Now Most Exclusive games are going MULTI.

I won't go into the other factors but these FACTORS weren't as strong or even existed from the PSone to PStwo era.

[ITR]

What if Blu Ray fails?

Betamax led the format wars back in the 70's...but lost out to VHS in the long run.

If sales of PS3's don't pick up by X'mas that would be a bad indicator for the industry and the consumers.

VGcharts says last week PS3 Hardware sales are down roughly 10%...while the Wii is up roughly 3% and the 360 up roughly 4%. (In America)

[Keyser]

Kewlkat...when you say marketshare I think that the last generation is a little different than this generation. A lot of PS2 owners did not own an Xbox even though the Xbox was more powerful.

This generation is different. A lot of PS2 owners bought a 360 and still plan on buying a PS3.

Who didn't enjoy the graphical upgrade of the 360 over last gen graphics? it came out a year ahead and didn't force people to choose which one to buy, a PS3 of a 360. The 360 was the only console available.

I may be the only one on this site, but I'm sure many PS2 owners like myself bought the 360 and intended on purchasing the PS3 when more games come out and as the price goes down. (I purchased my PS3 in March for different reasons).

I owned a PS2 (and Xbox) so you could count me in their 70% marketshare but I bought a 360 when it launched. Did Sony lose me out of their marketshare? No, just bought a PS3 later.

My point is that I suspect that there are a lot of 360 owners who will eventually purchase a PS3. It's not an either or situation. So as you look at marktetshare I wouldn't say they are loosing a lot of the marketshare more that many soon to be PS3 buyers have not purchased it yet.

ITR: If Bluray fails (no indications that it will) then Sony loses the software money that bluray generates but they still enjoy the software money the PS3 will generate. (I said DOUBLE barrel shotgun).

[kewlkat007]

I've had around that period of time, N64, PSone, GameCube, PS2, XBOX, now 360 and the Wii, Of course I will eventually get a PS3, but that's just me, even tho I haven't agreed with Sony's strategy, I still eventually buy all consoles, while I do understand each consoles strengths and weakneses, its more so I like to play the titles that can only be found of a certain one.

Then again, I know a lot of Xbox owners that owned PSone and PStwo. We can agree we have more PS fanboys then Xbots as some like to say, because we know most gamers at least owned a PS console at one point.

The fact they they have choosing XBOX this gen(or maybe in the meantime) just means they are not HARDCORE loyal fanboys and just like to GAME, while fanboys that never owned an XBOX continue to bash.

So my point was, what has changed, is the EXCLUSIVE titles SONY has held on for some long, for which is why most gamers would buy all 3 consoles. That why, I have bought 90% of Consoles to date. So if more titles continue to go MULTI, that PERCENTAGE you think that, will or have owned an XBOX and a PS console might not have to own both. Of course you will always have games the other does not.

Never had a 3DO, JAG, Neo-Geo tho, and can you guess why?

[DADO]

Sony wanted to push the PS3 sales they would have stopped the support for the PS2. I am pretty sure that Sony is very happy withe sales of the PS3 at the current stage.It is the strategy Sony is using. They know that 2008 will be the Sony year with a lot of games coming out.

[JasonPC360PS3Wii]

No wait I own a 360, its sucks to be you hahahahaha.

OverratedV2 "Im a gamer. Not a sad fanboy." Did you realy just say that? Uh Oh pigs must be flying and hell must be froze over.

68% thats not small, PS3 is going the way of the DODO. This is what happens when you put Blu-Ray first and gaming second. Oh well all console companies feel this kind of pain eventually, this is just not Sonys round (good luck on the PS4 Sony, if there is one)

[agent864]

How do these 2 statements match ?

Sony Posts Major Financial Year Losses

Sony announced operating profit of 71.75 billion yen ($596.8 million) for the year ended March 31, down from 226.42 billion yen ($1.88 billion) a year earlier.

[DADO]

Compared to last year they lost a lot of money.that is why they call it financila losses.

[weekapaugh]

they haven't lost any money, their revenue is just down compared to last year. a loss is when you have negative revenue.

but anyway, who the f*ck cares. this has nothing to do with games and is just another desparate attempt by the x-kiddies to bash the PS3. yawn...

[VirtualGamer]

Your right.

Sony Posts Major Drop in Profits is the original title, while Newsbot chose to go with Sony Posts Major Financial Year Losses.

EDIT: ok perhaps it originally was what Newsbot posted and the site changed it after as they now have changed the title to "PS3 Drives Big Drop in Sony Profits"

[PS360WII]

Sony still made a profit as a whole you realize right?

[alsef07]

no

[genericname]

hahahaha, are people really this stupid? they still made money just not as much as last year.

[DrWan]

Get an education, read carefully.

[sumfood4u]

HALO3= A lot Happy Xbox Players! Super Smash Brothers Brawl= A lot of Wii Players. Tekken 6 /MGS4/ FFXIII & Versus/ Ratchet & Clank= A lot of happy PS3 Players! FFXI new exspantion= A lot of happy PS2 players. Bottom Line is all systems are going 2 be Happy for the holidays, I must admit I haven't seen as many RPG coming out this year since 2000. Yeah I'm happy since I play plenty of RPG.

[gta_cb]

hmmm i notice you have listed one game for both Xbox 360 and Wii but more for the PS3, you do realise that it is infact the other way round! (more for Xbox 360 then PS3 then Nintendo Wii)

[Maddens Raiders]

...it's called the ebb and flow of business, folks. It happens with the best of companies, even oil and car giants. Ups and downs in the market are natural and this is nothing but a hiccup. They're still posting ridiculous gains in other divisions of the electronics / consumer products giant and lead the Nikkei around like a dog on a leash, so the notion that the PS3 will kill SNE is ludicrous. Next year they'll have record profits, and in Q1 2009 may have even pulled ahead by then.

Next

[neogeo]

And they know what there doing. Did I say I love my Sony cell phone?
Yes I do:)

[gta_cb]

you mean a Sony Ericsson? if so i have one aswell =D i have a Sony Ericsson K800i =D its great!

[hfaze]

This is just as ridiculous as the articles predicting the doom of Microsoft due to losses from their gaming division. NEITHER COMPANY IS GOING UNDER DUE TO THEIR GAMING DIVISION'S LOSSES...

Even Microsoft is facing these kind of issues with their XBox business unit. Hell, the XBox business unit HAS NEVER MADE MICROSOFT A PROFIT.

So does that mean that Microsoft is going to be filing for bankruptcy protection anytime soon? HELL NO...

Does anything in this article mean that Sony will be filing for bankruptcy protection anytime soon? HELL NO...

Does this mean that EITHER console is going away due to the a$$-kicking that the Wii is giving the both of them? HELL NO...

[gta_cb]

you can disagree or agree, but i personaly think we should try to stop arguing as much

[HateBoy]

Less profit (or loss if you prefer that) equals falling prices on stocks, no one wants to buy shares of a company that presents the worst quarterly loss in four years. THAT´S why these figures matter...

[HateBoy]

For those of you that dunno anything bout economy 68% is a LOT, ups and downs whatever, that is a huuuge down.

[HateBoy]

Sony Ericsson mobile phones ROCK, mostly because of the ERICSSON part of the product. Yes, I´m Swedish. Lol

[ErcsYou]

sony made less money this year than last year, duh, do you think the cell processor was developed for free? is advertising free, what about all those free tv's in europe? what about all the employees that make games for sony that havnt released yet, they still get paid. sony said they would see losses in 2007 two years ago, why act suprised? lets see how deep a hole M$ dug with xbox, that will put these numbers to shame