Sony game unit aims to be profitable this year

President and group CEO of Sony Computer Entertainment Andrew House says the publisher is relying on its PS3 business to help it return to profit.

Sony is banking heavily on its PS3 business to help return its game unit to profitability this year, according to a Reuters report.

Sony has high hopes for the PS3.

President and group CEO of Sony Computer Entertainment Andrew House told Reuters that he has high hopes for the PS3.

"I think we will be profitable this year," House told the publication at Tokyo Game Show this week. "We have a growing installed base, growing connectivity of the PS3."

According to Reuters, Sony posted a 29 billion yen (US$371 million) operating profit in the year ending March 31, before reportedly cutting its forecast for sales of its Vita and PSP handheld consoles.

Reuters said that its investors are concerned that Sony will struggle to achieve a turnaround after slashing its earnings outlook, lowering its annual operating profit prediction to 130 billion yen from 180 billion yen.

Earlier this week, Sony announced its new PS3 model.

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1 comments
Nxss-effa-sim
Nxss-effa-sim

This is why I don't understand how gaming consoles still exist from a business perspective. It has been 6 years since the PS3 launched and the Sony game division still isn't profitable yet. And yet they are already going to sell another expense machine that will put them back in the red. Is Microsoft's gaming division profitable yet either? I don't see how the money they get from software can even come close to covering the billions of dollars the companies have lost over the last several years.

jenovaschilld
jenovaschilld

Well any profit they make will be squandered away by the ceo into other divisions like medical equipment, smartphones, mobile media (all of these things announced this year) as well as trying to save their tv business which they lost billions (bravo anyone?) of their core business ps3. 

 

See the way I have seen sony is that before the ps1 they were the rockstars of electronics, brick and mortar businesses, and the Apple of music, movie devices. The old guard ceo.'s hated the stigma of being just a video 'game' maker a, niche industry they perceived, and had no problem wasting any profits made in the video game division to get back on top of the electronic, movie, media industry where they believed was the real core business - not some kid game sideline product like the playstation.

 

Well time and history has proved them outdated like so many others who look to the past and not the future. They greatly reconstructed management that is more focused on digital media and games early this year, tossed out a lot of old executives have made plans to isolate the video games division from being bled by other divisions. 

Sadly at the cost of 10,000 and counting regular hard working souls.  

 

Unfortunelly their plans late this year to try and break into the medical equipment, and emerging markets is iffy - which i can only speculate they will have to go into huge debt or once again skim off that useless kid division 'video games'. 

victorlamy
victorlamy

coulda swore sony said that when the slim launched.

megakick
megakick

Aim to be profitable?

Funny...

Sohereiam
Sohereiam

"Sony game unit aims to be profitable this year" that's a loser statement.

tgwolf
tgwolf

Oh, I support Playstation, just not Sony in their dairy-farming-like ploys, such as 'OH, LOOK, guys! I found this new, slightly-improved variation on the comparatively ubiquitous console you finally compromised to buy after six years--but it will cost you!'

warhawk-geeby
warhawk-geeby

Well I'll give them my backing, because lets face it.. the gaming world as a whole would be screwed without the competition of Sony.

 

I'd even support Micrsoft in a time of dire need.. and that's saying something.

 

I'm a gamer, and the companies need us as much as we do them.  World would be a sad sad place without video games!

Karjah
Karjah

I can't beleive I'm saying this but if Sony wants me to buy the latest model of PS3 they should have taken away my ability to just upgrade the hard drive in my current slim model.  I mean hell at this point I'd pay extra just to get ps2 compatibility back.

 

Your welcome Sony that one's free and your an ass if you take me up on it.

okassar
okassar

That's nice, but their profits are going to shoot right back down with the PS4 unless the PS3 achieves PS2 status (as in, having crazy sales even into the next generation).

TheBlackEclipse
TheBlackEclipse

In other news, Gamespot has officially run out of actual news and has turned to stating obvious facts about companies that make video games. More details to come soon.

Devil_wings00
Devil_wings00

Lol the headline is sort of chuckle worthy. Is this news? A company trying to make profits! Say aint so joe! Congrats Sony you are attempting to achieve the basic objective of all companies! I hear Microsoft and Nintendo are copying this winning Idea, what rip-off artists. Sorry for the sarcasm ;p but seriously Gamespot this must have been a slow news day.

zequex
zequex

Aim for the stars, Sony! Follow your dreams!

cheamo
cheamo

The title of this article made me laugh so hard.

tgwolf
tgwolf

...Why do I get the nagging feeling that that translates to 'Sony will be milking consumers this year??'

vicsrealms
vicsrealms

You mean they weren't aiming to be profitable last year?!!!  /facepalm

Vodoo
Vodoo

I think it's common sense that ANY company "aims" to be profitable this year. So this article is pointless to say the least.

Sonic_fan21xx
Sonic_fan21xx

this would be a good time to upgrade my console . I have a 6 year old controller that is crapping out and my PS3's HDD is 10GB away from being full , plus I want assasin's creed 3 . the 500GB bundle is perfect .

theKSMM
theKSMM

No doubt Sony is looking to cost optimizations (read: a cheaper, slimmer PS3) to drive these profits, but they often leave money on the table by not taking advantage of other opportunities to create a good ecosystem of games, music, and video.  Sony has a major presence in all of these areas, and yet they price older properties too high (e.g. $10 for Tomb Raider?!?) and make it difficult to purchase content and use it across systems thanks to lots of DRM and activation requirements.

 

It's probably too late for them to catch Apple in the music / video market now, but if Sony had taken these steps back in 2004, we might be seeing a line around the block to buy the PS Vita rather than the iPhone 5.

TheZeroPercent
TheZeroPercent

um

what else are they gonna make money off of?

move?

vita?

 

salvucci91
salvucci91

Aiming to make cash is always the wrong way to go about it.

Megavideogamer
Megavideogamer

The PS3 is still in third place, Despite having the Superslim out now that is not going to change anything. Sony will not return to profits on a redesign.

Jebril
Jebril

The fact that the PS3 is still not profitable shows how much of a failure the console was. I have nothing against Sony as a company but they really screwed up this gen and lost a huge portion of the market share they had established so solidly with the PS1 and the PS2.

SolidTy
SolidTy

Great news, as they are one of the companies making plenty of 1st party high quality games for gamers.

dRuGGeRnaUt
dRuGGeRnaUt

I think this new slim is for 3 purposes:

 

1.) People that dont have a ps3 yet

2.) Techophiles that need the latest everything/people replacing old models

3.) Mainly? to confuse parents/grandparents into chosing, "hmmm.. does timmy want the new nintendo? or the new playstation? hmmm" ;)

jenovaschilld
jenovaschilld

 @okassar They still have done well in the asian and european market re the ps3. And do not forget the blu ray added to the ps3 helped them win the media war, gaining profit every time one is sold, much like they did with the dvd. It is common for a new game system to be in the red for the first few years. and though they go into large debt early on in a new console the rewards are well worth it. 

Look at microsoft who lost 8 billion with in the first two years of the xbox, I think when asked, they said it was less then expected and outlook is great. They knew the future was not in tv or movies but in video games. 

 

Sad though how much money they wasted of the games division in trying to save their tv market. Maybe the Vita and psp would have done alot better and their games divisions would have been more healthy with more and better games out. 

BlackBaldwin
BlackBaldwin

@TheBlackEclipse  totally agree with that statement...

TheZeroPercent
TheZeroPercent

 @Vodoo

 is nintendo "aiming" to make money from wii this year?

thats kinda the point of this

lhughey
lhughey

 @Sonic_fan21xx 

Why would you do that.  Buy a new HDD and a new controller for about $100.00.  Next gen consoles will be out in about a year so no need to rebuy something you already have.

kennythomas26
kennythomas26

 @TheZeroPercent Are they even selling move hardware cause I know with some store up here near me in Toronto the move is not selling much at all.

abHS4L88
abHS4L88

 @Jebril 

When thinking about all of this, it's still amazing that people expect Sony to come out with another technological leap of a console. Sony's really in no good position to be taking the same huge risk with their next gen console that they did with the PS3. I'd much rather see the PS4 be maybe like 50% more powerful than the Wii U and last for also 5-6 years than the PS4 is be like x3 more powerful and discover later that the PS4 is the final console by Sony. 

MJ12-Conspiracy
MJ12-Conspiracy

 @Jebril It's perception, PS3 isn't a failure but they've been dealt some serious blows especially in the last couple years. The system being jailbroken then the PSN outage hurt them more than they'd like. Ask yourself this, what if everything that happened to Sony happened to M$, you the tables be turned? what if Sony was out first? what if they had the better online service? what if most of the games coming out was on PS3? and what if those hackers had targeted M$ instead? what if it was XBL that had the outage and those customers lost their data? it's perception, plain and simple...

Personally I have both consoles and like the PS3 more but see that both do certain things better....

TheZeroPercent
TheZeroPercent

 @theKSMM

 i though i had a pretty good point

i thought you kinda sounded like a butthurt fanboy

Chrome76
Chrome76

Sony's gaming division being 56 Million in a hole minus inflation after the Ps3 launch is not great. This is if you add profits from the PS2 else wise it is just terrible. Microsofts EDD has turned a profit since the 360's launch though not enough to cover Xbox 1's 4 billion loss.

TheZeroPercent
TheZeroPercent

 @abHS4L88  

all PS ever had was PS1&2

but both of those were based on nintendos tech

when nintendo dumped the ps1(snes-cd)

ps just stole segas image

and used an upgraded nes3

thats why ps1&2 were so awesome

it was the best of every console in one

 

Sigil-otaku
Sigil-otaku

 @MJ12-Conspiracy  @Jebril Those questions would have mostly meant the death of the PS3. If they got the PS3 out even sooner it'd have cost even more or been faulty since the tech wasn't ready then so would have required tons more R&D costs to get it done quicker and produce it when HDTV's and Blu-rays would be even less ready to support the system.

 

If you're saying what if it came out just as powerful as it did and was out first then that's kind of silly because MS would have more than likely designed there console to be more powerful than the PS3 or have some other feature to sell it in mind as you rarely release a weaker system last with nothing to make it stand out. But even if you do factor in your talk about  PSN hacks etc. it's not like MS didn't have issues of it's own Such as the RROD which surely made some people jump ship to sony and give sony a sale they may have not even got before.

 

PS3 isn't a failure unless we're talking about sales (hardware and software) and where it places in the console war but in the end it's pretty close regardless so it's not really a problem if it comes 3rd (just highlighting my view on that part).

mullen1200
mullen1200

The hacking/outage was really unfortunate, but compared to the early instability (how many versions of the 360 did they make? Just to fix overheating issues). I have both consoles and think the online service for the 360 is a bit better, but we pay for it. 

 

Anyways I really feel that the service is far better . The 360 has a much bigger pirating community from what I can tell (They are able to go online and play with legit consoles if you do it properly), whereas the psn jailbreak is incredibly limited, buggy, and you cant go online.

abHS4L88
abHS4L88

 @kennythomas26 

Aww, you missed out, the Dreamcast is by far the best system when it comes to fighting games (still used at tournaments).

kennythomas26
kennythomas26

 @abHS4L88 Yeah that's true, but their has been rumors that they might make a come back and we'll have to wait see right. My point to your reply is still true and I still miss the Sega days and I wished I got the Dreamcast when I had a chance.

abHS4L88
abHS4L88

 @kennythomas26  

While I would love that (still have a Dreamcast that I play on occasion) Sega is in no place to ever come back to the console market T_T. They were really never that strong at marketing which is why the Saturn struggled and even the Dreamcast, despite being an amazing system didn't live up to its full potential. 

kennythomas26
kennythomas26

 @TheZeroPercent  @abHS4L88 I personally was not a fan the PSX/PS1 and I did own one along with a N64 and I was never really impressed with the PS2 and one of the reason's was memory cards. But what do I know I'm still waiting for Sega to put their hats back in the console war.

abHS4L88
abHS4L88

 @TheZeroPercent  

I know that, but my main point was that gamers are beginning to expect too much without realizing the staggering cost it'll take to deliver on these desires.