Sony has reported this week that the company, for the fiscal year ended March 31st, had a loss of $1.04 billion USD, the first time the company has reported a loss since 1995. Perhaps even more notably, the company said it expects a bigger loss in upcoming quarters as sales slide and the Yen grows stronger against the US Dollar.
Revenue for the period also fell 13 percent to $81 billion USD, with the company blaming a number of factors including “the slowdown of the global economy, the appreciation of the yen and the decline in the Japanese stock market.”
The “PlayStation” division saw the biggest slowdown in sales year-on-year, mainly due to the strengthening Yen and a large decrease in sale of the aging PlayStation 2. Revenue in the division fell to $10.7 billion USD. Operating profit losses were cut in half however, to $597 million USD, thanks mostly to large reductions in the cost of manufacturing the PlayStation 3 gaming console.
Over 10 million PS3 units were sold for the year, along with 14 million PSPs and 8 million PS2 units. Software sales exploded for the PS3, up almost 100 percent to 103.7 million units. PSP software sales saw a decline of 10 percent.
For the Q4 2008, Sony reported that the Yen was 13 percent more expensive versus the USD and 30 percent more expensive versus the Euro compared to the fiscal year before it. For the upcoming year, Sony is predicting a $1.26 billion USD loss.
Result for: operating profit
According to Macquarie Securities analyst David Gibson, Nintendo makes $6 USD operating profit on each Wii unit sold, making it the only “next-gen” console to make a profit on the actual unit.
The analyst also noted that Sony makes a decent sized loss on each PlayStation 3 sold and that Microsoft has the potential to break even on each Xbox 360 console sold, but still may not.
Besides making profit on each console, the Wii sells the most software of the new consoles, selling an estimated 220 million units for 2008. The PS3 and Xbox 360 are estimated to sell under 130 million units each.
Nintendo also capitalizes on its position in the market by selling 60 percent of the Wii games itself compared to only 15 percent for Sony and 30 percent for Microsoft. The Wii’s top selling games are all developed by Nintendo.
Hiroshi Kamide, director of research at KBC Securities, Japan, added, “The key thing about Nintendo is they want their things to be at price points that anyone can respond to.”
Result for: operating profit
Sony’s videogame unit, sometimes known as the “PlayStation” unit, has announced that it is expecting to see its losses shrink by about $956 million USD for the 12 months ended March 31, 2008. Because of PlayStation 3 start-up costs , the previous 12 month period had seen the division lose about $1.43 billion USD.
The figures are according to the Japanese Nikkei daily and the whole corporation is expected to see its operating profit increase five fold. Even with that growth however, the corporation is expected to miss its profit targets.
The January forecast was $3.91 billion USD but the Nikkei predicts that the company will only see a $3.63 billion profit, far below its estimate.
Sales of TVs and digital cameras were very strong for the year and official full year earnings will be released next week. Sony spokespeople said they would not comment on the Nikkei’s report.
