Sony Records Second Loss, Sees Profits Ahead

PC World: Sony recorded its second straight year of losses last year as sales fell 6.7 percent.The company reported a net loss for the financial year from April 2009 to March 2010 was ¥40.8 billion (US$438.9 million), which is an improvement on the ¥98.9 billion net loss recorded the year earlier. Net sales were ¥7.2 trillion.

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champ212930d ago

I guess the recession really has put a hurt on most companies and for companies in Japan the Yen appreciation has just made it worse. Hope the Yen does devalue soon.

vhero2930d ago

The fact Sony was losing so much money per console on PS3's still doesn't help. We now know why Sony has been releasing so few PS3's into the world though. Because they are losing so much money they couldn't afford to mass produce as many as normal.

etownone2929d ago

I went a couple weeks ago looking for a ps3 and couldn't find one, yesterday I went to pc Richard and they still haven't received a shipment.

Seriously WTF Sony! I finally decided to buy a ps3 and now I can find one.

champ212930d ago (Edited 2930d ago )

Personally i dont understand why Japan wont intervene with the Yen appreciation.

Yen 2years back against the USD was at 120 yen to a dollar. Today its around 92yen to a dollar. Which is a huge difference.

The strong yen is taking a toll on all the japanese industries including the Car, Electronics etc.

Anyone notice how expensive Japanese cars have become recently?

TOO PAWNED2930d ago

It doesnt matter, world ends in 2012 so who cares, lets hope Uncharted 3 get released before that so i can die happy / sarc end

DaKid2929d ago

I beleive if your apart of the WTO, your not suppose to mess with the value of your currency but allow the market forces to determine the price.

Product2930d ago (Edited 2930d ago )

I understand the yen situation but to attribute the mass majority of it on exchange rate is just silly seeing as how for the entire time the PS3 has been out Sony has been in the red (outside of 2 quarters i believe). The PS3 is a great machine and has alot of unlocked potential, but Sony's gaming division is really bringing down the whole company. I still can't wrap my head around why investors stick with the gaming division when it has seen billions of dollars lost over the years. I understand the PS3 is the catalyst for Sony customers buying more tv's and bluray movies but to be this far into the red because of one machine is outrageous.

Funny because the exchange rate didn't stop Nintendo from posting a 2.45 bill dollar PROFIT.

champ212930d ago

120yen per dollar vs 92yen per dollar

Thats a 34% difference, pretty huge. Look at the car makers how they have increased prices to cover those differencs.

Sony if anything has cut the prices of the PS3 over the last 2 years, the Yen differences have gotta hurt.

Imagine before if the PS3 was selling at 300usd * 120yen = 36000yen
today if it sells at 300usd * 92yen = 27600yen

Huge difference IMO.

Shang-Long2930d ago

Okay Sony loses money...
Well I'm a gamer and I'm winning, while they lose I win.
Thanks Sony

IdleLeeSiuLung2929d ago

Didn't you know? Sony looses money for the goodwill of their customers! They wouldn't have it any other way!!!

Sony is a charity to all mankind.

darkmurder2930d ago

Lol wait for everyone to blame this on the recession, it hasn't stopped MS and Nintendo from recording profits. They're selling their consoles way too cheap for their own good I'm sure people would still buy it if its cheaper. This along with the rumoured Xbox price drop coming up where you'd assume Sony would follow must be really hurting them.

corneliuscrust2929d ago

Took a great risk in releasing the most expensive hardware this gen. The timing of the recession just made things a little rocky for them. Nintendo and MS played a different card and it paid off for them, which is great. But without that risk that Sony took, the landscape of this gen would be very different. I think they will be just fine as their ps3 install base closes in on 360's

Rampant2930d ago

The rest of the company would have posted a profit if you took out the gaming division. So yeah, it's the yen´s fault.

Solotov2929d ago (Edited 2929d ago )

It is about time the USA gets a competitive advantage.
Japan has always "cheated" in the past with their devalued currency.
Up until about the last couple years, Japan has always had the exchange rate advantage, as the dollar was valued more than the Yen. It is about time, US corporations get a break.

t8502929d ago

I find it funny when a US product makes it to Japan, the Japanese tend to completely downplay it.

However when a Jap product arrives in the US, people are broadminded to give it a fair chanace.

commodore642929d ago (Edited 2929d ago )

The financial report really tells the story with regard to the gaming division.

On page 10 of the FY 2009 report, Sony states:

"Game: Despite PS3 hardware cost reductions and increased unit
sales of PS3 software, profitability deteriorated primarily due to
lower unit sales of PS2 software and of PSP hardware"

What can we glean from this?

Well, its seems the ps2 is finally in decline.
However, where Sony expected the PS3 to fill the resultant empty void of ps2 revenue, there remains a significant shortfall.
The reduction in PS3 costs is progressing more slowly than was hoped for, while ps2 profits, having kept the gaming division afloat for so long, are finally giving way. Gaming revenue is down 10%, and the gains made by the 'walkman Mp3' division were offset by losses in the overall game division.

Put simply, the ps3 is not able to generate anywhere near the profits for Sony that the ps2 did, in its day.
With increased competition from the wii and 360, the ps3's marketshare has declined, while its cost has remained significant, relative to the ps2. As a consequence, Sony's gaming profit has taken another big hit.

On the whole, though, far from being a bad thing, this increased competition has merely resulted in more choice and better content from all the manufacturers, as they scramble for marketshare, albeit at the cost of lining their own pockets.

Companies innovate, fanboys lose, gamers win.
It's all good.

ps3ftwin2929d ago

They made around 850million USD in losses on the gaming division, which pulled the entire company into losses.

I really wonder how long Sony can keep up with this. While companies like Nintendo who get a free ride reap massive profits.

+ Show (5) more repliesLast reply 2929d ago
Product2930d ago

For such a huge company like Sony it still shocks me when a company is this far into the red and their business plan doesn't change.

t8502930d ago

Dont expect them to launch the next console on the same business plan. PS4 probably will be break even or profitable from launch.

TOO PAWNED2930d ago

Yup that saddens me in a way. Time of high tech consoles if probably over, thankfully this generation is going to be long, so we will eventually get 2.0 consoles, but if it was for today, it would be def 1.5

Product2930d ago (Edited 2930d ago )

Completely agree. I really think developers got in alittle over their head this generation and didn't realize just how expensive it was to make great looking games.

I mean look at Ninja Theory, the dev team who made Heavenly Sword. HS sold 1.5 million copies on the PS3 and they still didn't make a profit from the game and Sony, the publisher, just broke even.

That should tell you just how ridiculous HD games are to make. When games flop like the 2 Capcom titles of Dark Void and Bionic Commando in the same year, it really makes me step back and say, Wow.
Look at EA, they will try to spin the Dante's Inferno sales, but being "close to a million" after their expensive budget and Super Bowl commercial tends to favor more lay offs if it keeps up, and that is something I'm not for.

@ below
I know this because I keep up with the business side of video games. Or how bout Microsoft who laid off 5000 people last year? Thats over 20k people combined in 2 companies that are jobless, not because of how competent they are but how incompetent their upper management is.

TOO PAWNED2930d ago

they fired 16k employees and closed few factories (read article) that is drastic change if you ask me.

hoops2929d ago

All companies this past recession had to do major layoffs. MS, Sony...all of them. Sony is still in financial restructure. This is there 2nd or third time they have been since the mid 90's.
It's tough all over

IdleLeeSiuLung2929d ago

Yeah, this recession is hitting bad when MS has to lay off people. MS hasn't laid of people since basically it's inception.

Dannehkins2930d ago

I'm quite confused actually. Over here in the UK, Sony's business plan has changed radically. They've launched an advertising campaign along with trade in deals and advertisements for the PlayStation 3 are everywhere.

Additionally, they've laid off staff to save money. The point I'm making is that Sony is a professional company who knows what it is doing. This is reflected in the fact that they've reported a net loss that is lower than what it was a year ago. As we slowly come out of this recession and see the Yen's value rising again, I am positively sure that you'll see Sony's profits rising again.

Its electronic part of the Sony brand though has taken a bit of a hit and it certainly doesn't help that their a Japanese company.

Wrathman2930d ago

i only see a few ps3 adds here (uk).and even less for other products.but they arent the leader in consoles advertising is in their imagine xbox advertises like crazy in japan.

Dannehkins2929d ago (Edited 2929d ago )

Wrathman have you not seen the make.believe campaign advertisement? Trade in an old Sony television and get £150 off a brand a new one such as a Bravia?

Sony have realised that their previous advertisement scheme was not helping them progress. Rival companies such as Microsoft, Apple, Panasonic and LG all had advertisements constantly. I think they've realised more so than ever is that a brand can only go so far; advertisements go the extra mile.

EasilyTheBest2930d ago

I agree with above. I see the PS4 being more like the Wii was to the Gamecube.
Theres no way in hell they will risk a really advanced console next time.

saint_john_paul_ii2930d ago

its all part of restructuring a company, which is what they did last fiscal year. that means money lost...

saint_john_paul_ii2929d ago

oh disagrees, lololol. i guess you guys havent read the news lately huh?

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