Price cuts hit PlayStation profits

But LCD TV business blamed for losses across Sony Corp; Full year profits expected to be down 80%

Sony's Consumer Products & Services division - which includes the PlayStation business and LCD televisions - suffered a 34.6 billion loss ($449m) for the second quarter ended September 30, down from the 1 billion profit for the same period last year.

Sales were down to 779.7 billion ($10.1bn) for the quarter compared to 889 billion, with the PlayStation 3 price cut and software sales as a contributing factor. The company lowered the price of its console in August this year across all regions.

However, it was the manufacturing costs associated with the LCD business that not only pulled the Consumer Products & Services division down, but hit the entire Sony Corporation's bottom line.

Sony Corp recorded losses of 1.6 billion ($21m) for the period, down from 68.7 billion profit in 2010. Sales were down just over 9 per cent from 1.7 trillion to 1.5 trillion, with the company blaming continued weak performance in TV sales and manufacturing.

For the full 2011 financial year Sony now expects profits of 25.9 billion, down over 80 per cent on last year's 135.7 billion, with sales of 3 trillion, down from 3.3 trillion.

Sony sold 3.7 million PlayStation 3 consoles during the 3 months, up from 3.5 million in 2010, and 1.7 million PlayStation Portable units, up from 1.5 million. The PlayStation 2 shifted another 1.2 million, down from 1.5 million.

PlayStation 3 software topped 37.4 million units, up from 35.3 million, with PSP software at 8.1 million, down from 11 million in 2010. PlayStation 2 game sales dropped from 5.6 million to 2.8 million.

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Latest comments (12)

Abbass Hussain International Business Development, AQ Interactive8 years ago
I would be very interested to see the breakdown on LCD sales. I wonder how much of this loss is down to poor sales of 3D TVs.
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Tamir Ibrahim Programmer, Splash Damage8 years ago
It would also be interesting to see how the strength of the Yen has affected Sony, like Nintendo.
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.8 years ago
Tamir, not likely as much as Nintendo trades and holds a majority of their assets in foreign currencies (mostly US dollars) while Sony does not. Sony will be hit with the difference in the exchange rate only as it relates directly to consumer export sales. Nintendo was hit on a more fundamental level because of the currency difference.
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Kingman Cheng Illustrator and Animator 8 years ago
I hear their factory in Bangkok has been submerged too because of the recent floods, ouch!
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Daniel Hughes Studying PhD Literary Modernism, Bangor University8 years ago
The 70 million PSP base bought roughly as much software as the 6 million install base of the 3DS--if Nintendo were disappointed with those kind of software sales, I can't help but think Sony will be praying Vita is a much healthier system for software sales than PSP has been. 3DS and Vita need strong software sales to ensure that traditional portable gaming remains relevant, so I hope they both have plans to push down their retail and digital prices and combat piracy.
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Art C. Jones Writer / Blogger 8 years ago
PSP software 8.1 million units in the quarter, 3DS software was 3.6 million for the quarter.

I think the yearly guidance has the 3DS higher, but certainly the 3DS was greatly outsold software wise in the quarter by the PSP. Maybe you were looking at the yearly guidance or year to date? (though I'm pretty sure the year to date is lower to, I do expect the 3DS will sell a lot of software in the next 2 months, but the numbers aren't very positive on the software side so far)

(also for comparison, Wii did 23 million software units, the DS did 16.86 millions software units)
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Daniel Hughes Studying PhD Literary Modernism, Bangor University8 years ago
I must've mixed up the yearly guidance with the quarterly numbers!! That being the case, software so far has been a big problem for 3DS.
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Charles Gaco Accountant @ PwC 8 years ago
I assume the competition from others such as Samsung and LG is taking its toll, despit Sony's strong brand. If possible, I would recommend integrating charts into such number-focused articles. Gotta love visualizing data.
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Roberto Dillon Associate Professor, James Cook University8 years ago
Amazing how the PS2 is still selling more than 1million units...
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.8 years ago
Daniel, hardware total is 3.07 million and software total is 8.13 million. That's a pretty decent hardware to software ratio for a recent launch. As a console ages, that ratio will increase on a predictable curve.

Roberto, Sony has been pushing the PS2 in emerging markets pretty heavily. Places where the current generation of consoles would be way too cost prohibitive.
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Craig Page El Presidente, Awesome Enterprises8 years ago
They should give up the Sony brand name, only negative things come to mind when I hear it.

- Overpriced TVs.
- My first PS3 dying after 20 days.
- Spyware on CDs.
- Shady deals with the movie studios to kill HD DVD.
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Donatien Tonye Studying MA Marketing Communication, University of Westminster8 years ago
What should PS do then to be more competitive, when they have Nintendo, which haven't been affected as much as they were, and Microsoft's Xbox 360, which is increasing its penetration in Europe and trying harder to dominate the North-American console industry?
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