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Sony expects games division losses to increase by $337 million

Thu 22 Jan 2009 8:55am GMT / 3:55am EST / 12:55am PST
Business

As Sony Corporation anticipates $1.68 billion loss - the first annual loss in 14 years

Sony Computer Entertainment

Sony Computer Entertainment is a Japanese videogame company specialising in a variety of areas in the...

playstation.com

Sony Corporation has said that it expects to record a net loss of JPY 150 billion (USD 1.68 billion / EUR 1.29 billion) for the financial year ending March 2009.

The company's PlayStation games division is expected to increase losses by approximately JPY 30 billion (USD 337 million / EUR 258 million) in the financial year, half of which is due to lower than expected sales.

For the fiscal year ended March 2008, the company made a profit of JPY 369.4 billion.

The company has primarily been affected by the economic slowdown and the strength of the yen making exports expensive.

The new forecast contrasts sharply with the previous guidance set in October last year, when Sony said that it expected to make a profit for the fiscal year of JPY 150 billion.

The company's other business segments fared no better. Sony's electronics division is expected to see losses grow JPY 340 billion, while Sony Pictures is anticipating an increase in loss of JPY 13 billion.

Sony's financial services division, which includes Sony Life Assurance, is expected to lose JPY 65 billion compared to previous forecasts, and all other business a further JPY 11 billion.

Update: Sony has revealed plans to cut costs at the business by JPY 250 billion, including the closure of one of its manufacturing sites in Japan, further consolidation of divisions and cuts to bonuses and salaries.

5 Comments

Fran Mulhern , Recruit3D

863 707 0.8
Interesting. So what's going to happen with Sony hardware moving forward? Seems their exclusives haven't sold too well.

I wonder if part of that is down to the headstart the 360 got on the PS3? I got my (first - ha) 360 on launch day, and by the time the PS3 came out, I had a very good group of friends on Xbox live, and already had a ton of games for it. No one was really interested in switching the the PS3, and so neither did I. Obviously it's more expensive, but the price wasn't really an issue - it was purely that I'd have been a billy no mates on there. In the end, I did buy one - but I use it so little it's actually been loaned out to a mate for the last few months.

Will Sony go the way of SEGA and become software only, or do ya'll think they'll push on with the hardware side of things too?

Posted:5 years ago

#1

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

2,287 2,507 1.1
It really depends on how the restructuring pans out. Some analysts are expecting Sony to have even worse results next year and if SCE is another big part of that loss, we may see a point where Sony has no choice but to go 3rd party...

or

Go the 3DO route and license out the PS3 technology to other manufacturers.


Both are unlikely scenarios but certainly a circumstance believed would be unfathomable just 2 years ago that now probably weighs on the minds of the Sony execs as a back up plan to their back up plan.

Posted:5 years ago

#2
'Sony going software only'

Not before a bitter fight with Nintendo & Microsoft could I see Sony going the SEGA route.

I believe both the headstart by the 360 and the 500 price tag severley damaged the PS3's sales.

The 360 was the first true next gen console and stole the thunder from any 'touched' up trailers Sony used when announcing their PS3 as gamers were already witnessing for the first time high res gfx on their new HD TVs.

And we've all seen the online comparisons between both systems running the same game and most of us would be hard pressed to notice the difference.

It's kind of ironic that the superior specced N64 was trounced by the PS1. I guess Sony failed to understand just why that happened and actually believed their games were just better than Nintendos' and not the true reasons behind their PS1 success.

From a gaming point of view I hope Sony's 2009 exclusives live up to the hype and give me a good enough reason to buy one.

Posted:5 years ago

#3

Fran Mulhern , Recruit3D

863 707 0.8
"And we've all seen the online comparisons between both systems running the same game and most of us would be hard pressed to notice the difference."

See, that's the thing. I've heard a lot of comments about how the PS3 isn't as good a gaming machine as the 360. But for me, I can't really notice a lot of difference when I look at comparisons online - I'm talking about the finished result, not the developing process. For me it's 90% that most of my friends have 360s and online multiplayer means a lot to me. Even where they have both, they (and I) only have the same games on the 360, so that limits it further. If my friends suddenly all switched to the PS3, I'd probably happily follow - then it won't sound like I'm at Cape Canaveral watching a Shuttle launch when I play games:)).

I'm looking forward to SOCOM on the PS3 in the UK soon. I hear it's not that great, but there's a dearth of modern tactical shooters on the 360 right now. If SOCOM can be called that - I'll wait and see. Roll on the next Ghost Recon and Rainbow Six.

Edited 1 times. Last edit by Fran Mulhern on 22nd January 2009 3:33pm

Posted:5 years ago

#4

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

2,287 2,507 1.1
PS3 price and X360 head start were certainly a huge factor for MS but there were others that played an equally vital role.

1. MS was very aggressive in their 3rd party deals. Many franchise that were once Playstation exclusive found a home on Microsoft's machine too. Many of those franchises helped cement Sony as the leader last generation.

2. Marketing. MS showed off games while Sony showed surreal babies crying and people sitting on the toilet talking about living.

3. Development process. Developers were quickly comfortable with the X360 development environment yet the PS3 came with a steep learning curve (in fact, Kaz Harai recently stated that was done on purpose).

4. Global shifts. Japan began loosing their global grip on the market when high end middleware came to prevalence. This lowered the relevance of the PS3's origin and heightened the X360's.


Side by side comparisons of multiplatform games will likely not show much difference simply because the machines aren't that different in their capabilities. Sure machine A can do that better or machine B can do this better but on the whole those factors do not make a tremendous difference in a multiplatform title. Budgeting and ease development also dictate they should be similar since it costs time and money to eke out those console specific nuances.

Posted:5 years ago

#5

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