Close
Report Comment to a Moderator Our Moderators review all comments for abusive and offensive language, and ensure comments are from Verified Users only.
Please report a comment only if you feel it requires our urgent attention.
I understand, report it. Cancel

Sony PlayStation division suffers full-year $2.8bn loss

Sony PlayStation division suffers full-year $2.8bn loss

Thu 10 May 2012 6:24am GMT / 2:24am EDT / 11:24pm PDT
BusinessFinancial

Update: PS3 price cut and lower hardware sales contribute to $5.74 billion loss for Sony Corp

Sony's Consumer Products and Services division suffered an operating loss of ¥229.8 billion ($2.8bn) for the full year ended March 2012, compared to a profit of ¥10.8 billion in 2011.

Sales were down 18.5 per cent to ¥3.13 trillion ($38.2 billion) from ¥3.84 trillion, with all segments of the division - games, PCs, LCD televisions and digital cameras hit by poor sales. Sony's price reduction of the PlayStation 3 and lower sales of the PlayStation 2 were singled out specifically in the games business.

Hardware sales were down across the business compared to last year, with Sony selling 13.9 million PlayStation 3 units compared to 14.3 million the previous year.

PSP hardware sales were down from 8 million to 6.8 million and PlayStation 2 console sales dropped from 6.4 million to 4.1 million.

1

Unit sales of consumer electronics and game products.

Software sales for the PlayStation 3 increased from 147.9 million to 156.6 million, while PSP game sales fell from 46.6 million to 32.2 million. PlayStation 2 game sales dropped from 16.4 million to 7.9 million units.

Predictions for hardware sales for the next financial year are also low, with combined PlayStation 3 and PS2 sales of 16 million units compared to the 18 million sold in the closing financial year. PSP (including PS Vita) hardware sales are expected to rise from 6.8 million to 16 million. Packaged software sales are forecast to remain the same with 196.7 million units.

For the entire Sony corporation, sales were ¥6.49 trillion ($79.1bn) for the full year, with a net loss of ¥456.7 billion ($5.74 billion), compared to a loss of ¥259.6 billion the previous year.

19 Comments

Bruce Everiss Marketing Consultant

1,692 594 0.4
Future generations of MBA students will be writing their dissertations on the PS3 as an example of how to get it utterly, massively wrong.
From being a year late to market, to silly CPU and GPU choices, to a backwards compatibility fiasco, to using it as a Trojan Horse to bring blu-ray to market this was and remains a monumental disaster.
Sony management have thrown away their dominant position in a huge global market and in doing so racked up eye watering losses.
Microsoft and Nintendo didn't even have to break into a sweat to beat them, Sony did all the damage to themselves. In fact Microsoft had the luxury of keeping the 360 unit price high throughout its life due to the lack of effective competition from Sony.

Posted:2 years ago

#1

Peter Skerritt Former Armchair Analyst / Console Game Reviewer

4 0 0.0
Very surprised to see such bold projections for Sony portables for this year. 16 million? I really don't see that happening, even if sales recover in Japan and remain consistent in the US and Europe.

Posted:2 years ago

#2

Matt Martin Editor, GamesIndustry.biz

173 113 0.7
I'd say a Vita price cut might help but then it didn't help PS3 sales this year.

Posted:2 years ago

#3

Keldon Alleyne Handheld Developer, Avasopht Ltd

472 480 1.0
@Bruce: what specifically should Sony (and others) do differently in the future with CPU choices? And what exactly was 'silly' about the CPU and GPU choice? What information was available at the time to suggest they should do otherwise?

The Cell can do lots of great things for gaming, of course in retrospect it was not economical for third-party developers to invest time in learning how to harness it's power.

How was blu-ray a disaster? it won over DVD-HD (or HD-DVD, I can't even remember what it's called), and IIRC Sony get the royalty from them.

Ask people why they purchased an XBox over a PS3, what do they say? Surely not the CPU, GPU and Blu-Ray, in fact the blu-ray has been one of it's major selling points for being a better blu-ray player than dedicated players and at a much lower price. As for why XBox is winning, I'd put my money on it being down to (a) launching late (as you pointed out) and (b) online. Why? because online communities were already existent, and friends of early adopters would have to purchase an XBox to play with their friends.

Why else to get an XBox over a PS3? exclusives. Gears of war and Halo. Of course everyone has their own perspective on what went wrong.

Posted:2 years ago

#4

senar koraltan QA Technician

9 0 0.0
Hopefully when it comes to the next generation of consoles Sony will learn their lesson!

Posted:2 years ago

#5

Antony Carter Senior Programmer, Epic Games

85 47 0.6
@Bruce
Yeah lets just forget the tsunami and earthquakes, which are the clear cause of the losses this year, for the entertainment division. Lets blame this years losses on a CPU choice from 6 years ago.

Posted:2 years ago

#6

Robin Clarke Producer, AppyNation Ltd

343 812 2.4
It's worth remembering that Microsoft's ten year+ odyssey into the console market is still several billion dollars shy of breaking even (according to Ben Cousins' last GDC presentation).

Would be interesting to know how that $79.1bn sales total breaks down.

Posted:2 years ago

#7

Jeff Wilson

46 0 0.0
Sony is still a strong brand but no longer has the marketing clout to expect the larger profit margins they used to have for selling a superior product. All their sales lines are now competing with competitor products just as good which makes pricing difficult.

Perhaps it is time to drop one product line such as Compact Cameras and use the R&D funds to develop leading products elsewhere. Having said that, I think most electronics companies are suffering at the moment. Apple have managed to stay ahead by creating unique products that customers want. Remember what the late great Steve Jobs said "Apple is a first and foremost a software company."

Posted:2 years ago

#8

Nick Parker Consultant

306 186 0.6
I would not call the PS3 a disaster. True, it was the first Sony console to lose generation market leadership but on the basis that its true competitor, the Xbox 360 (the Wii did tremendously well for three years but has been in decline since 2009) only beat the PS3 in one of the three top global regions, the USA, the PS3 has performed better in Europe and Japan. Indeed, in the first quarter of this year, the PS3 almost sold as many units across the globe than the combined sales of Wii and the Xbox 360 (it sold through 95% of their combined sales). This is proving an Indian summer for the PS3 as it closes the gap on its competitors on a week by week basis in most markets but obviously this has come at a cost to the bottom line.

Posted:2 years ago

#9

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,287 2,507 1.1
Nicholas, would you be willing to share your figures with me? Mine indicate the Wii has still sold more than the PS3 in all markets, not just the US.


This is why I've hated the department consolidations from MS and Sony over the past 4-5 years. You lose a lot of direct insight into the financial strength of the video game segment of their respective companies.

Posted:2 years ago

#10
Agree on the handheld figures - they seem utterly implausible to me. Given that the PSP sold 6.8m last year (and even with price drops are likely to sell less this year), that would imply 10-12m sales of PSV units this FY.

Given that the PSV only managed 1.8m in the 2 qrts (and that includes the launch period), Sony must have something serious planned for it - combined major software release & price cuts.

They had better hurry up - it only sold around 50k units in Japan in April, with another 20k or so in the first half of May.

Posted:2 years ago

#11

Preet Basson Studying Mathematics with Statistics, University of Portsmouth

92 13 0.1
@Bruce, you have named some top reasons for. With nearly everything digital distribution, in terms of store wise nothing does it better than Steam. Sony have always tried to shove new media down consumer throats all the time & time & time fail. Blu-ray may have beat HD-DVD but that is only due to PS3 came native & Xbox didnt. Lets put it this way if your making loss per product you sell that bad business just there. You can do compare units, but also compare how much all those units sold. Sony 2 biggest problem this console gen, cloning everything MS did & failing at nearly all of them, 2) making things hard for them like over complex programming etc. Regardless the PS3 will not out do the PS2, that will always be Sony's best gaming console ever.

Posted:2 years ago

#12

Dominic Jakube Student

92 13 0.1
Atari with the 5200, Sega with the Saturn, Nintendo with the N64 and now Sony all had trouble with their 3rd console.I bet my house Micro-Soft will be next.
Times change, games change and new players enter the market, no company can be on top forever.

Posted:2 years ago

#13

Michael Vandendriessche Studying Computer Science, K.U. Leuven

85 12 0.1
16m psp/vita sales look extremely optimistic to me.

I didnt think psp games sales would fall that much. I expected it to be slightly higher with vita's backwards compatibility with psn psp games.

Dominic is right, no company can be on top forever.

I think Microsoft being an American company helps a lot in its dominance in the US. Unfortunately for Sony, Japan isnt as big as the US.

Posted:2 years ago

#14

Kevin Patterson musician

187 103 0.6
@keldon - The cell was a special processor created in a joint venture between Toshiba, Sony and IBM. They originally wanted to create a GPU based on the technology but didn't have time or the performance wasn't up to par and quickly had to go with a off the shelf Nvidia GPU slightly modified. If Sony would have used an off the shelf CPU or at least something with a normal architecture, they could have kept investment costs way down. The ended up selling the tech completely to Toshiba.

Blu-Ray is slow and requires installation on disk, something that most do not want on a console, as we already have to do that on PC. Blu-Ray helped with limited stock at launch and a longer development time, helping the PS3 to be launched much later than the 360. It won the battle but not the war, Blu-ray sales are still not what DVD sales once were, and they will probably never get there. Most PS3 games don't even come close to using that storage space.

I purchased a 360 over PS3 and I had a PS2 and PS1. Why? Because the 360 launched a full year before, because if you had a CRT HDTV as I do, it doesn't really do 720p well, and the 360 was much better at scaling games to 1080i/1080p, because of the xbox live service which continues to be superior to PSN, because of games looking sharper on 360 than PS3 due to halving the ram, not having to install games to the HD to run them, and mostly because I couldn't stand the arrogance that Sony showed towards their competition before and after launch. I could no longer support them thanks to that attitude. Blu-ray meant nothing to me, still doesn't, and I don't have a blu-ray player.

Also, I'm mainly a RPG player and the 360 was the machine for RPG's. Bethesda, my favorite RPG developer, has had many issues with the PS3 with their games, thanks to that halved ram.

I'm no fanboy, Sony has a new attitude and if they release a killer PS4 I will most certainly get it. I will buy the most powerful console and support it the most.

Edited 1 times. Last edit by Kevin Patterson on 10th May 2012 8:00pm

Posted:2 years ago

#15

Keldon Alleyne Handheld Developer, Avasopht Ltd

472 480 1.0
Blu-ray sales are more likely a reflection of attitudes towards HD not blu-ray. With load times, Skyrim loads about the same on both machines.

Of course my question isn't what didn't go well, I was asking how could a better decision have been made with what was known at the time? And what was silly about their choice of CPU and GPU?

What really went wrong with the PS3 was the XBox, that's it. It wasn't the CPU or the GPU, it wasn't the blu-ray or the backwards compatibility. It just faced stiffer competition from Microsoft and the unsuspected success of the Wii eating into their potential sales.

Regarding the complexity, perhaps it would have been wise to follow the strategy they had with the PS1 and make it easier for them to utilize everything. I remember how much the performance analyzer helped with the PS1, and I think that providing as much free middleware that makes use of the system features would have gone a long way - like what Nintendo is doing with the Wii-U.

Posted:2 years ago

#16

Nuttachai Tipprasert Programmer

79 60 0.8
I don't know about other region, but here, in Asia, people still prefer PS3 over Xbox 360. So, calling PS3 as a disaster while it just lost to its rival by small margin sounds a little bit exaggerate to me.

But yes, Sony have some lessons to learn if they want so come back in next generation.

Posted:2 years ago

#17

Shane Sweeney Academic

417 441 1.1
Has the Microsoft Division made a profit on the Xbox project yet, I know the original Xbox project cost Microsoft a loss of over four billion dollars.

And the Xbox 360 didn't see a profitable quarter until well after its release?

Overall the PlayStation "experiment" has given Sony great returns over the decades. Can the same be said for the Xbox division yet? (Honest question?)

Posted:2 years ago

#18

Nick Parker Consultant

306 186 0.6
@Jim Of course Jim, please look up my details and drop me a line. Wii has sold more than the PS3 and the Xbox 360 in all markets on a lifetime basis but my comment is describing the first quarter of this year and more recent sales.

Edited 1 times. Last edit by Nick Parker on 11th May 2012 8:10am

Posted:2 years ago

#19

Login or register to post

Take part in the GamesIndustry community

Register now