Sony reports $279.4 million profit, no thanks to PS3

[UPDATE] Research and development costs for next-gen console cut into electronic giant's revenue; company predicts 6 million PS3s shipped by March 2007.

by

First, the good news: Sony is profitable again, beating expectations with its most recent earnings report. For the quarter ending June 30, 2006, the electronics giant reported net income--what laypeople like to call "profit"--of 32.29 billion yen ($279.4 million). The figure was a massive improvement over the same quarter in 2005, which saw Sony take a 6.58 billion yen ($56.9 million) loss. The company credited its turnaround to strong sales of digital cameras and improved currency exchange rates.

Now, the bad news: Sony's financial gains were hindered by a big shortfall at its game division, Sony Computer Entertainment. The department saw a year-on-year decrease of 29.1 percent in revenue, dropping from 172.8 billion yen ($1.5 billion) to 122.5 billion yen ($1.06 billion). In turn, SCE's operating loss ballooned by 20.9 billion yen ($181 million), going from 5.9 billion yen ($51.1 million) to 26.8 billion yen ($232.1 million).

One factor in Sony's misfortunes was its current-gen platforms. The PlayStation Portable was a bright spot, seeing a year-on-year increase of 4.2 million units in quarterly software sales to 9.1 million units. However, PSP hardware sales were down a modest 70,000 units to 2.02 million units. Quarterly PlayStation 2 hardware sales fell much further, sinking nearly 1 million units to 2.54 million. Software for the console was also off, falling 2 million units to 33 million.

But while the PS2 and PSP's fortunes were mixed, they at least brought revenue into Sony's coffers. The same can't be said for the yet-to-be-released next-generation console, the PlayStation 3, which was, by Sony's own admission, a financial sinkhole. "The [quarterly financial SCE earnings] deterioration was due primarily to the recording of charges associated with the preparation of the launch of the PS3 platform, in addition to continued high research and development costs associated with PS3," said Sony in its earnings report. The company did not give specific financial figures for R&D costs for the PS3, which will ship worldwide in mid-November.

[UPDATE] But while (obviously) no PS3s are in the retail channel now, that will soon change. As part of its report, Sony repeated that it plans to ship 6 million units of the next-gen console during its current fiscal year, which ends on March 31, 2007. During that same period, the company says it will ship 10 to 11 million PS2s.

Sony's forecast added to analysts' resurgent optimism about the game industry. "We believe that the prevailing negative sentiment in the sector is beginning to wane somewhat ahead of the launches of Sony's PS3 and Nintendo's Wii," said Lazard Capital Markets senior researcher Colin Sebastian. "While a slowdown in current-generation product sales is still possible in [the second half of 2006] as consumers await the release of new hardware, we note there are a few offsetting tailwinds, including a stronger software release schedule and easing year-over-year growth comparisons."

Discussion

571 comments
estebanhi
estebanhi

Great, cant wait for november to catch a ps3. Its going to be a great console.

HXCDEW
HXCDEW

Good going Sony. $600 may be expensive for most people, it's not expensive enough for at least 6 million. By the time Sony is tired of manufacturing and shipping the PS3 to keep up with demands, the price will eventually come down for those who wait.

GAMEGEEK1
GAMEGEEK1

each system has its own ups and downs there is not one that is better than the other in any way shape or form some have good games some have good graphics some have interesting designs but all are very nice gaming machines in there own right just pick which ever one suit u the best whether u like innovation, awesome games or good graphics...i don't pretend to make allot of money a year but i am grown up enough to know how to SAVE the money i do get for things i want....i myself like impressive and original games(and giant robots :P ) so i plan on saving for a PS3 not because i don't like the other systems but because i like certain types of games and will wait to save up for the other systems when/if good games in my opinion come out for them. so u people should stop wasting your time arguing about whats better and whats not u wont sway peoples decisions by bad mouthing a system with insubstantial things that u think are the truth and promoting a systems that u like by making it look larger than life wile not dictating any of its flaws besides u get nothing from it anyway except a never ending argument about something so trivial(unless u do indeed work for a company that does make one of the systems in which case invading a forum to bad mouth another company's product to promote your own is extremely low even in the world of marketing) PS. i know my spelling sucks but i have better things in life to do than spellcheck my writing

markfarren2004
markfarren2004

I hate the ps3 and Wii not because I am a fanboy but because the PS3 and Wii and japanese and they dont care about FPS or other western games so to hell with them 360 all the way!

Fauij
Fauij

i must be the only one that hates wii.

MasterMidget
MasterMidget

Flimsyfishy, I agree with you. I currently have a 360 and am loving it. I am definently buying a Wii for it's creativeness and price. The PS3...Well.....It's a little too expensive. I'd wait a few weeks until I get reviews from that system; then I'd buy it or not.

Flimsyfishy
Flimsyfishy

well, people have stated that there is no one great system. i am planning on getting all three systems eventually... hopefully tax free too (gotta love the game design and development courses). i will say that the winner of the next gen wars is all up in the air. there are a ton of people in my school saying that the 360 has already won, because it was released the earliest. you can't pass up the playstation 3 because if you're into graphics that would be the system of choice. The Wii has probably the most creative idea since (oh god, i'm gonna regret saying this) the virtual boy. eventhough the virtual boy was one of the largest flops in history, i think the videogame industry could use a little change. all i see is about a 6 million console edge to the 360 when the other two get released. all i can say is for the videogame companies to bring on their best games, because each system will bring a unique experience. each console has their games as well (Microsoft has Halo, Fable, and others; Nintendo has Mario, Legend of Zelda, and others; and Sony has Metal Gear Solid, Final Fantasy, and others as well). but i think they actually might have mixed generations... ps3 and the 360 have 2 sets of 256 chips, making them 512... i think the wii will only have either 128 or 256

t_walk1
t_walk1

Man is this thing still up? Give us some info on E3 being canceled. Come one Gamespot I was counting on you!!!

ShadoweaverCode
ShadoweaverCode

FCB - I'd like to point out a few things. As far as your first question is concerned, it depends on what market you are talking about. If you are talking about average people who just happen to have a console laying around incase they decide to play it one day (hence such a spread out library, with many different genres and titles), yes it was Sony. But you clearly are leaving out the hardcore graphics junkie gamers, as that market was primarily owned by PC gamers and Xbox gamers. You made a statement asking how many people are really gonna get a Wii and a 360 instead of a PS3, and while I can't answer for everyone I am hoping that alot more people get 360's and Wii's then people buy PS3's. They will have alot more fun and a variety of titles (the exact same reason why PS2 dominated CASUAL gamers before). I believe that you are confused, thinking that PS3 will have much the same library as before but with better graphics. This is not the case because the reason why there were so many titles on PS2 was because from a developer perspective they did not change very much from the original Playstation (the main reason why graphics junkies were turned off by the console). So to develop a PS2 title was very much the same as developing for a PS1 title with some upgrades in certain departments. This has changed dramatically, not only is alot harder to program for with the ps3, but it costs alot of order dev kits and such. Therefore you cannot expect the library to be the same as it was before. In fact, these small time developers that made lots of titles for PS2 are all coming to the 360 because of its ease to develop for its the most common next-gen platform. As for the Halo comments, Halo is a great game but by no means is it our 'one good game'. In fact I would be so daring as to say that it is not the best game for Xbox, but that a personal opinion. But to argue that it is not as boring as your post represents, if you play a game for 10,000 hours.. I would expect ALOT of repetitiveness out of any game. I wouldn't be expecting alot of 'risky' titles on PS3 because PS3 is 'risky' enough as it is. Its not even for sure that the system will sell well with its high price tag, arrogant Blu-ray (this is shoving down throats, halo was not shoved at anyone, it was an optional purchase) support, and a severe lack of interesting games. I call severe when a system has 2 titles that are 'must-have' and thats it. And btw, Assasins Creed is quite possibly coming to 360. ps. Zoalord my god your gonna get a ps3 just for metal gear!?! MGS is a great game, but not worth $700 alone. And no I'm not paid by MS or Bill Gates, i'm just supporting my favorite console thats all. Its a friendly debate man, not a war.

roams
roams

The PS3 will hurt them more than it will help them. I'd keep producing games for the PS2 if I were them.

Omihalcon
Omihalcon

Good to see Sony is standing strong but, like many others on this already extensive forum have highlighted, it looks dubious as to how long those numbers will remain in the green. I'm not a fanboy; between me and three other mates who play video games we have literally every console from Sony, MS, and Nintendo (incl. handhelds) starting at the SNES. Down here US$600-700 tranlates in roughly AU$1000 and I know no-one who is prepared to pay out that much for a console (let alone one which hasn't even established a strong release line up); and these guys are the 'hardcore' gamers here. I'm not saying that Australia is a perfect model for the worldwide gaming community, but money is money in any language and Sony should seriously watch its step.

realdealphil
realdealphil

Why do people always whine and complain about people arguing over which system is the best? We have to analyze these companies, point out strengths, weaknesses, faults, etc. It is our duty as consumers to give feedback to the sellers. Sellers HAVE to compete. Competition is what has made my generation of gamers move from an 8-bit system to what we have now. Competition is the driving force of any free-trading market, much less one of the most profitable markets in the entire world. The bottom line is that most of the accussed "XBOX FANBOYS" are accussed falsly because they don't agree with Sony's marketing for the PS3. They have an attitude about themselves that makes me, and many others, sick. The PS3 is NOT a computer and they are NOT invincible, and I think this is going to be the generation that proves it.

rwilcox99
rwilcox99

ya no-one ever considers the fact that the price goes down after approx. 5 months. hey i can wait.

Rumstocker
Rumstocker

i totally agree with you zoalord.... i hate fanboys.... i already have 360, will get wii.... will get ps3 when price goes down

zoalord
zoalord

wooop i got a 360 getting a wii and will eventually get a ps3 for metal gear but will wait for the price to go down etc as for sony fanboys or nintendo fanboys and xbox fanboys THERE IS NO BETTER MACHINE THEY ALL HAVE THERE STRENGTHS AND WEAKNESSES PS3= most powerful 360= all round good entertainment machine for less wii= best new idea for a long time they all got exclusive games to take advantage of the machines they are on, tbh if u just get one console and say its the best because it has sold the most you are a idiot realy just because a i-pod sells more than any other mp3 player it dosent make it the best one(example) i just think its funny that alot of people are defending the companys that are making these machines do you get paid by them? also alot of ps2/psp owners complain about the ds games being colourful and kiddy looking but the best game out on the psp is probably loco roco strange dont you think?

og8440
og8440

[QUOTE] bill gates did steal windows but the xbox he didnt steal nething he just used the stuff that was alrdy stolen by PS2 from nintendo to make it.[/QUOTE] That's bs. Dreamcast anyone? Microsoft took what it knew about consoles from working with SEGA and porting Windows CE to the Dreamcast. The controller, built-in networking, etc. were all ideas taken from the Dreamcast. I remember when people were calling the Xbox Dreamcast 2.

strik9
strik9

[This message was deleted at the request of the original poster]

strik9
strik9

WOW. These comments become more painfull (yet amusing) to read everyday. Most of you whining about prices and whatnot need to get a life. If you cannot afford it, well too bad sucks for you. Listen: $600 is not alot of money, maybe to kids and people working at Walmart for a living, but really a few hundred bucks is chump change. If you really want all 3 systems then go freakin buy them. ANYBODY with some sort of income could easily get all this next gen equipment. Maybe you cant get it all at launch....so what,put some cash away while you wait and buy it EVENTUALLY. Or you could just keep up complaining about things until the next set of consoles get released....do you really think future systems are going to be cheaper than what they are coming out for now????? Now thats funny.

bmogav
bmogav

WHY DO WE ALWAYS HAVE TO ARGUE ABOUT THIS SONY VS XBOX VS NINTENDO CRAP in the end i care about games and game quality and the reliability of the system even though in 5 or 6 years will be on the next consoles there is no one good sytem period you buy what fits what u want and no one can tell you how to spend your money i bought a 360 because i knew it would be cheaper than the ps3 and this console gen would have less exclusives and maybe xbox 360 wouldnt be the one or two hit wonder the original xbox was those r my reason doesnt mean they are right or i am a fanboy of anything im very upset that ill be missing out on MGS4 but thats the decision i made TO FANBOYS OF ANY SYSTEM "IT'S ABOUT THE GAMES AND WHAT U WANT TO BUY SO STOP CRAMMING THIS HALO RULES BEST GAME EVER OR PS3 IS KING SCREW MICROSOFT AND BILL GATES CRAP DOWN EVERYONES THROAT LETS ALL ENJOY THE NEXT GEN AND NOT RUIN IT BEFORE IT EVEN STARTS

Gaming_Deity
Gaming_Deity

FCB, I'd like to turn your attention to the fact that sony has a few thousand generic jrpgs. Yes, Xbox started off having a lot of generic shooters but as time has passed it has grown out of it. There are plenty of games on the xbox now that I believe are better than Halo. The 360 is hardly a one note console. Microsoft has been very good at bringing a great number of different types of games to the Xbox. Hanging on the stance that Xbox is a home for mediocre FPS's is a little ignorant. Secondly, I am going to buy a Wii as well as my 360. The Wii's controler, I believe, is going to move this industry in a new and exciting direction. The other's don't have to follow suit but the control has so much potential. I honestly think it was smart of Sony to copy the idea, even if it was a little under handed. You can't classify one console or another as being for the "average" gamer. Every console has more of something one person may like that another person won't.

crossdx
crossdx

I've only browsed the first couple of pages of these comments, and already I want to crack open a twelve pack. I'd need to be really piss drunk to go through the rest. :D

FCB_2100
FCB_2100

Hmm... what company has owned the market for how many years? You guys just defend your precious X-box because of Halo. Not saying it's bad. But when I can get more than one good game on a system, I'll look at buying that one. And for those of you who say you can buy a Wii and 360 for little more than one PS3? How many people do you actually will do such a thing? Some Nintendo games are good and classic, but most are for younger audiences... not my particular cup of tea. Anyway, If you like a system that shoves one good FPS and 1000 generic ones down your throat and the occasional good RPG, then by all means get a 360. If you like good, new, original games with story lines other than "SAVE THE EARTH!!!" then get a PS3. I love Halo, I've at least played 10,000 hours since I've gotten it, but it's so repetitive. So yea, I play it, it's fun, but not mind blowing. Now, Ratchet and Clank 1-3 (4 kind of sucked) were my favorite games until the next sequel came out. Now, with the exception of the Zelda series and Ocarina of Time in particular, I don't think I've been more impressed with the beginnings of a game series. So, again... the 360 is for the average, yes, average American gamer. Your typical, and predictable FPSs and RPGs (KOTOR and Fable are exceptional.) But if you want original games that break the boundaries of what we expect, get a Sony PS3. With titles like Assassin’s Creed and Resistance: Fall of Man (I know it's a "SAVE THE EARTH" game), you can expect the unexpected from the PS3. Now I know the PlayStation has repeated games like Final Fantasy, but because there are so many more games, that even with sequels like FF, there are still a lot more new games. I can tell you now what will happen to the 360 down the road. It will get prettier and more FPSs. And with the PS3, no one knows what going to come out next, whether something is a flop or hit, taking risks and change are what drive the industry to unseen limits. ...Just think if no one supported the NES because it seemed like too big of a risk... where would we be now?

evilyoda861
evilyoda861

Zack only people with a huge amount of talent and luck, and connection makes 20 grand a month. No one and that means you in this forum makes that kind of money. You just sound like an **** saying that. No one cares that you are rich from your daddy or mommy ok? Sony bites the dust!

Gaming_Deity
Gaming_Deity

Sony making a profit is a good thing. Competition fuels industry. If Sony, Microsoft, or Nintendo win "the war" the victor could price any and all of their product as high as they see fit. Microsoft having to struggle to gain ground is good. It forces MS to work harder, make better games, better services and a better console to gain ground. In the grand scheme of things Sony doing well is good for everyone.

Distortion_Lane
Distortion_Lane

Blablablabla. 700 is WAYYYYYYYYYYYY too much. 360 is already a rippoff (can't run games for **** Maybe just COD2 ran good, but look at saint's row pfffffff bull****!!) Ps 3 is gonna be a bigger ripoff. SOny is ****! Microsoft is ****! Nintendo is ****! Money money moeny money. at least if you want to make money give me somethig that's worth it!

ShuyinXSeraph
ShuyinXSeraph

Yes, yes, my children, let's all argue over matters that have nothing to do with the article at hand, and even more so, let's jump on the latest bandwagon trend, Sony-bashing. Nooo, Sony's no good, they're only #1 when it comes to worldwide console sales for the current generation... Nooo, Sony is t3h suck because they don't have sh!tt!e FPS's or second-rate sports games, or even crappy attempts that the devs dare call "RPG", unlike ONE non-Japanese system out there... Nooo, there was NEVER a single outstanding game on a Sony console...nope...Final Fantasy VII wasn't on a Sony system, no, sir... And nooo, Sony never had the balls to be the first company to have a chance at splitting the handheld market with Nintendo. Say what you want about GameGear, N-Gage, Gizmondo (HAH!), or what have you, they're all dead, and although UMD is having a hard time (a VERY hard time), no one's ever said that PSP is dead. Oh, crap, now I'm just doing what everyone else is doing: Sony bashing and not talking about the article. Aw, p00py.

Iffy350
Iffy350

Seven Hundered dollars is way to expensive for a paper weight; If you buy a PS3 that is all that you will recieve! Where is the word processor, it has no internet explorer or Tivo option??? Where is the all in one machine that provides cable tv access and access to the internet? It has no option for email. I can't set up a MSN email account on my PS3! ! ! An expensive paper weight! Can't bid on ebay with a PS3!

Xa31nov1s
Xa31nov1s

I honestly have no idea why you would be a fanboy for Sony. Sony! wtf? Seriously, the Playstation doesnt really have many incredible, exclusive games, touting characters and games with such magnitude as Mario, Zelda or even Halo. I just think the PS2 is just an 'everybody' machine, nothing to go all ga ga for.

bobby1690
bobby1690

the xbox 360 is good but nothing special about it ... ehh i have also went through 3 xbox 360's and yes i do look after them there just crap and brake down and over heat and scratch games etc.. and u your realy only gettin like 12gb out of your hard drive, rest is for xbox itself

solidsnakeo
solidsnakeo

why does everyone think xbox 360 freeze's first of all i know 4 people that have it and they got it recently and it doesn't freeze its just like saying all psp's have dead pixels and stuck square buttons. second ps3 is not the greatest thing to ever happened it may be cool but it is not that great. third wii does not suck that is the most innovative system that has come out since n64. Why don't all you sony fanboy's go to the system wars thread no one really cares what you think

BonziBoce
BonziBoce

once again the topic is overrun with fanboys, screaming that the PS3 is the best. even though, none have enough touched it. I love all the systems equally, and you should probaly try something new before you freak out and sya its crap.

Iffy350
Iffy350

There online department SOE is just a joke! They should pack up and move there company back to japan! There like EA in a way! Electronic Arts is so powerful that they are dishing out over priced football games on the XBOX 360 with last generation graphics. If they make a The Sims 3 then im going to m*il b*mb Will Wright! Im still waiting for a Sim City 5. The Xbox 360 does crash, it depends on what games you buy! The games they chose for backwards compatibility are 40% crap! The Wii controler is lame! I would pay big bucks for an XBOX 360 mod that would allow me to use a Keyboard and mouse to play games like Halo. Playing a FPS without a keyboard and mouse just isn't right in my opinion.

Gamespotvic
Gamespotvic

"yeh the wii is crap and dumb and ps3 is the best no matter the price! " If only that was true...

shady3469
shady3469

"why does everyone1 want to get the xbox 360 that console freezes, breaks and everything havent you lot seen the articles on gamespot, oh yeh the wii is crap and dumb and ps3 is the best no matter the price!" hmm... i've had a 360 from day 1 and it hasnt froze, broke or messed up at all, ps3 will have even more problems because of the blu-ray player and the cell, the more you put in something the bigger the chance it will mess up.

painstation2
painstation2

[This message was deleted at the request of the original poster]

SolidSnake9000
SolidSnake9000

gameboi13 why does everyone1 want to get the xbox 360 that console freezes, breaks and everything havent you lot seen the articles on gamespot, oh yeh the wii is crap and dumb and ps3 is the best no matter the price! Buddy Sony Ps3 will have there problems to o and i no they will so enough

gameboi13
gameboi13

[This message was deleted at the request of a moderator or administrator]

Battery749
Battery749

I think the Wii even with the gay name is going to be really fun, specialy for parties and stuff like that. Ps3 i think is going to be a really good game console i'll prolly not get it when it first comes out i suggest that all you dont either not the fact thats it puts a whole in your wallet just the fact that it will probaly have so much bugs and stuf when it first comes out and there apost to upgrade the blueray a year after release. But i really do think the ps3 is going to be a nasty, awsome system Assians Creed looks kick-ass a lil pricey but.....yeah it will be worth it. The Xbox 360 is just all around a good system i have one and it kicks ass.

Battery749
Battery749

[This message was deleted at the request of a moderator or administrator]

painstation2
painstation2

You know what? I'll just say this for my own behalf, if every user in the second page of this forum is done arguing with each other about the consoles. It's got nothing to do with the topic but I'll just say it to balance things a bit. BE EXCELLENT TO EACH OTHER!!!!!!! PS: I think the Wii will bring balance to the world of video gaming, kind of like in Star Wars where Luke Skywalker brings balance to the force, according to the books after episode six, hahaha.

james777555
james777555

yeah. That guy reckons he gets 20k a Month. 240 000 a year.

SolidusHo
SolidusHo

um 20K a year isn't that much. that's like working at mcdonalds.

Castlevania1986
Castlevania1986

I wonder how old everyone is that say they are buying a PS3? Because if you are 16 I'd like to ask you, how will you get it? By stealing ? Or will your parents actually buy you one? Because over all the years of owning a Super Nintendo, Sega Genesis, PS2, PS1, Xbox, and a N64 and if I would have saved from all those systems? I could had a PS3 myself. Apparently when you are 24 years old fancy systems aren't really going to impress you period. Neo Geo failed miserably because of their price and games only a few people in America had one. A few in Japan had one too. But everyone was into the Super Nintendo or Sega Genisis. Therefore just think of PS3 as the next Neo Geo and the 360 as Super Nintendo and the Wii as Sega Genisis. Just think, how many young americans are willing to waste $600 on a system then $70 on all their favorite games costing them thousands of dollers later on? Im sure you might want to save up for a nice car soon enough or maybe even college if you ever plan on going. And anyone claiming to make $20,000 a year on this forum is either a dumb idiot liar or just someone looking for attention. But I'll go with dumb idiot liar instead.

abd_jemeye
abd_jemeye

what the h*ll.. all of u fanboys keep saying he stole and they stole. its right that theres no such thing called 'steal' in electronics. a video game system has some basics and objectives to be met so it can be a gaming system. like a controller, a proper controler, not like the one for Wii, i dont consider this a game system. so if the xbox came after the ps and had a controller with buttons (which is a necessity in gaming systems), it doesnt mean that they stole it from the ps2. and the same thing for the ps2 as well, having vibration in its controller.. so grow up people and stop arguing about such stuff...

GAMEGEEK1
GAMEGEEK1

LOL some of u people are quite entertaining to read, in the world of electronics there is no such thing as stealing just because one camera looks or woks like another does not mean stealing is involved there is just one good way of doing it so everybody uses it so the all have a quality product instead of a sub par one i mean almost every CD player today has some form of G protection they did not steal they thought it was a good idea and used it.....i would consider it a complement if indeed some one used a technology that i created/developed it would tell me that it is worthwhile and worth using. BTW some of you people's grammar is horrible :) PS. i know my spelling sucks but i have better things in life to do than spellcheck my writing

james777555
james777555

what! Jkzack. You said the next series of the elder scrolls is only on the ps3 and pc. That's stupid. All of the other elder scroll games have been on xbox and pc...not PS

ashwillkillyou
ashwillkillyou

you people who go on about xbox and ps n stuff have too much spare time, what you talk about on here has no influence on anything. The time you spend on here you cant get back and most things you say mean jack **** to anybody. Maybe im just a strong minded person but nothing anybody says on a forum can change my thinking, I do my own research, buy my own consoles and games and get my own impressions on them. All of you who bag anybody or any company or any console or whatever are just plain wankers with nothing better to do, all i had to do was look up some link about PS3 news and hears a page load of **** underneath it. Go buy every console because in this day in age they are all awesome in their own respect. AND if one compnay steals another companies idea then they have as much guilt about it as any one of us. unless they are criminals and dont give a flying **** Peace

EverteMax
EverteMax

My only problem with the PS3 is its color...