Things may not be as bad as previously thought for Sony Computer Entertainment. Yesterday, a survey of five analysts by financial news service Bloomberg predicted that the company could be reporting a 50 percent drop in profits today. However, according to Sony's consolidated financial results for the third quarter of 2006 (the three months ended December 31, 2006), profits were only down 5.3 percent and stood at 159.9 billion yen (approximately $1.3 billion), compared to 168.9 billion yen ($1.4 billion) in the same period last year.
The Tokyo-based corporation did report a loss of 54.2 billion yen ($455 million) in its game division for Q3 2006, compared to a profit of 67.8 billion yen ($556 million) recorded in the previous year's third quarter. This was mainly due to selling the PlayStation 3 at "strategic price points"--console hardware units are often sold at an initial loss for the manufacturing company, with the money recouped from strong games sales. Other factors included additional costs incurred during the preparation for the launch of the next-generation console and a decline in PlayStation 2 and PlayStation Portable sales. PSP sales were "lower than expected."
In Q3, the PS2 shipped 4.1 million units worldwide, of which 1.7 million were sent to North America, 1.7 million to Europe, and 770,000 to Japan. The figures showed that the PS3 had shipped 1.84 million units in total, with 800,000 of those going to Japan, and 1 million to the US. The PSP shipped 1.76 million units worldwide in Q3, less than half the amount in Q2, with 860,000 shipped to Japan, 890,000 to Europe, and 10,000 to North America. It should be noted that in the previous quarter, Sony shipped 2 million PSPs to North America, and the industry-tracking NPD Group reported that more than 950,000 PSPs were sold in the US in December alone.
However, things certainly aren't all negative for Sony--sales of Bravia televisions and Cyber-shot digital cameras were mentioned as being especially strong, contributing to an increase of almost 17 percent in sales and operating revenue for its Electronics division.
In October, Sony slashed its predicted forecast to 80 billion yen ($656 million) for its group net profit, down 38 percent. However, the company has now returned to its original, more optimistic, predictions and raised the forecast back to 110 billion yen ($902 million).