Sony beats analysts forecasts

Things may not be as bad as previously thought for Sony Computer Entertainment. Yesterday, a survey of five analysts by financial news service Bloomberg predicted that the company could be reporting a 50 percent drop in profits today. However, according to Sony’s consolidated financial results for the third quarter of 2006 (the three months ended December 31, 2006), profits were only down 5.3 percent and stood at 159.9 billion yen (approximately $1.3 billion), compared to 168.9 billion yen ($1.4 billion) in the same period last year.

The Tokyo-based corporation did report a loss of 54.2 billion yen ($455 million) in its game division for Q3 2006, compared to a profit of 67.8 billion yen ($556 million) recorded in the previous year’s third quarter. This was mainly due to selling the PlayStation 3 at "strategic price points"–console hardware units are often sold at an initial loss for the manufacturing company, with the money recouped from strong games sales. Other factors included additional costs incurred during the preparation for the launch of the next-generation console and a decline in PlayStation 2 and PlayStation Portable sales. PSP sales were "lower than expected."