Analysts: Sony May Post Biggest Loss in 4 Years

[meStevo]

The loss may exceed profits from electronics such as Bravia televisions, and the movie unit, whose ``Spider-Man 3'' generated record box-office sales when it opened this month.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aTVZj2sgVtvk&refer=home

Ouch.

Gamespot's quotes are a little more sensationalized:

Analysts estimate game division could post quarterly loss of $1 billion, according to Bloomberg report.

http://www.gamespot.com/news/6170776.html?action=convert&om_clk=latestnews&tag=latestnews;title;1

 

[Tom_P]

1 Billion $s, you got to be kidding me..

 

[JoeSp]

They are making a killing at the ticket booth and on their tvs. Their stock has been rising and the numbers for the company will probably wash out. This is the same stragedy that M$ as been using for years. Other companies do this too - they offset hugh losses by hugh profits from other divisions. If my memory serves me right Sony did not start making a profit on sales of the PS2 until its 3rd year of production. Now every sale of a PS2 is almost sheer profit for Sony and the hugh library of PS2 games.

This was expected by the gaming division and so Sony is not surprised, however, the sales of the PS3 have not done well lately so maybe -- just maybe Sony will drop the price. Get that puppy down to say $449 and bring out a couple of those games we keep reading about and maybe those sales numbers will start climbing and the game division might see their way to a profit within the next year or two.

 

[KE4EST]

I would like to see the price drop....we will see.

 

[meStevo]

http://www.forbes.com/feeds/ap/2007/05/17/ap3731438.html

On Wednesday, Sony reported that losses for the January-March quarter widened from the same period a year ago to 67.6 billion yen (563 million) in red ink, largely on launch costs for the PS3...

Sony will lose about 50 billion yen ($413 million) in its video games business this fiscal year, and recovery won't come until the arrival of more games to play on the PlayStation 3 machine...

It goes on to state that they expect to be break even next year thanks to software sales. They've shipped 5.5 million units which was short of their 6mil goal by March...

Per the most recent NPD numbers they've sold 1.3 mil units as of April.

So for every 10 consoles shipped... 2.3ish have been sold give or take a few tenths. (edit: which is wrong since NPD numbers are USish only, Japan has their own sales gauge, so numbers are a bit rosier than portrayed)

 

[navychop]

Remember, the Japanese are not as tied to quarterly results as the U.S. is. They are willing to take short term losses to ensure long term gains.

Isn't the 5.5 million units shipped a worldwide figure, and the 1.3 million sold the number sold in the U.S.?

 

[meStevo]

Remember, the Japanese are not as tied to quarterly results as the U.S. is. They are willing to take short term losses to ensure long term gains.

Isn't the 5.5 million units shipped a worldwide figure, and the 1.3 million sold the number sold in the U.S.?

That's a good point, are the NPD numbers only US? Japan has their own set so I guess that would seem to be correct, I'll throw that in my post.

 

[navychop]

Yes, from their site:
"NPD provides information and insights for the music and film & video industries in the U.S. and for the games industry in Canada and the U.S."

Still, it doesn't look like they've sold much over half of what they've shipped. Not sure what the sales figures are for Japan/Asia and Europe.

 

[s8ist]

Sony needs to start cranking out titles that people want to play. Then I'll buy a ps3.

 

[Derwin0]

They are making a killing at the ticket booth and on their tvs. Their stock has been rising and the numbers for the company will probably wash out. This is the same stragedy that M$ as been using for years. Other companies do this too - they offset hugh losses by hugh profits from other divisions. If my memory serves me right Sony did not start making a profit on sales of the PS2 until its 3rd year of production. Now every sale of a PS2 is almost sheer profit for Sony and the hugh library of PS2 games.

And for the same reasons, Microsoft doesn't sweat the fact that the original XBOX never made a profit, and the the XBOX360 is similarly bleeding money.

 

[mwgiii]

Analysts predicted grim news from Sony's fourth quarter financial results, especially in regards to PlayStation 3 performance. Sony has several times stated their gaming division would remain in the red for the foreseeable future, but sluggish sales in the early going has resulted in today's confirmed news of a $563 million net loss in the quarter ending March 31, 2007 -- the biggest Sony's reported in the last four years.

Source: http://www.1up.com/do/newsStory?cId=3159554

 

[meStevo]

That loss is for Sony as an entire company.

The games division lost $914 million for Jan-March, for the fiscal year it lost them $2 billion.

With a "b".

http://www.gamespot.com/news/6170827.html