Sony triples profits but PlayStation 3 is still losing money
Sony expects to sell fewer PS3s in the next year, and could be losing $260 per PS3 shipped
May 14, 2008 12:59 PM

Sony has had a good financial year (to March 31 2008) with sales up 6.9% to ¥8,871.4 bn ($84.3 bn). Operating income jumped 421.9% to ¥374.5 bn, with net income up 192.4% to ¥369.4 bn ($3.6 bn). Apparently it did well in digital cameras, PCs and LCD TVs. The PlayStation 3 did a little less well.

The games division lost ¥124.5 bn ($1.2 bn), which was an improvement on last year' s loss of ¥232.3 ($2.2 bn). However, the company only shipped 9.24 million PlayStation 3 consoles. This was a big increase on last year' s 3.61 million units, but well short of Sony' s target of 11 million units.

Premonvision comments:

A dip back into the reds for the Game division could be acceptable, given the nature of this business, and the pipeline that Sony has for the PS3. However, more worrying is the outlooks that Sony provides; From April 2008-March 2009 Sony has a target of 10 mln PS3 sales, which is actually lower than the target that Sony set for last years period (11 mln, but reached 9.24 bn). This means that Sony expects to sell fewer PS3 units for the current period, than what it expected to sell a year ago. Even with the looming economic recession, Premonvision expects Sony to outperform this target. Surely the Game division needs more aggressive targets if it aims to outperform the overall market.



Sony aims to ship 15 million PSPs in fiscal 2009, up from 13.89 million units in the year to March 2008.

Sony pocketed ¥15.6 billion ($148m) from the sale of its share of the Cell processor fab to Toshiba.

(I did the currency conversions at XE where the current rate is 1 USD = 105.298 JPY.)

A thought: On Sony' s own figures, the games division made a loss of $130 for each PlayStation 3 shipped. Let' s assume that it' s making pots of money on the PSP and the PlayStation 2: the PS2 is now hugely profitable and still sells more games than anything else. These two platforms could easily have made a profit of $1.2bn in the year. In that case, the total PS3 loss would have been $2.4bn shared between 9.24m PS3 consoles, or $260 per PS3 -- including any attached Sony games. Hm, is that a reasonable guess or not?