Sony game unit's Q2 losses double

Though company is back in black overall, SCEI posts $841 million operating loss thanks to aggressive PS3 hardware pricing, declining PS2 sales.

It was the best of times and the worst of times for Sony during its second fiscal quarter. The three months ending September 30 saw the electronics giant back in the black with an operating profit of ¥90.5 billion ($787 million), up from a ¥20.8 billion ($180 million) operating loss the year before and over analysts' expectations. Overall Q2 revenue increased from ¥1.85 trillion ($1.6 billion) to ¥2.08 trillion ($1.8 billion), courtesy of surging sales of Bravia HDTVs, VAIO PCs, and digital cameras. Profits were also up slightly at Sony Pictures Entertainment, the company's film and television division.

The story was much different over at Sony Computer Entertainment Inc., even though its revenue increased 42.9 percent to ¥243.4 ($2.1 billion). The company's game unit saw operating losses more than double, going from ¥43.5 billion ($378 million) to ¥96.7 billion ($841 million). In Sony's own words, the shortfall was "due to the loss arising from the strategic pricing of [the PlayStation 3] at points lower than its production costs and PS3-related inventory write-downs." As of September 30, Sony's worldwide game inventory had increased 31.7 percent to 247.8 billion ($2.15 billion) "due to the buildup of finished goods following the introduction of the PS3 platform."

As for hardware sales, the three months ending September 30 saw Sony sell--not ship--1.31 million PS3s worldwide. The company also sold 3.28 million PlayStation 2s (a decrease of 0.31 million from Q2 2006) and 2.58 million PlayStation Portables (an increase of 0.56 million). The company did not break down said sales by region.

When it came to software, Sony sold 10.3 million PS3 games internationally during its second quarter. PS2 games decreased by 9.2 million units to 38 million, and PSP games dipped 600,000 units to 12.6 million units worldwide. No specific games were called out as being best-sellers.

555 Comments

  • Bloodlust007

    Posted Nov 1, 2007 1:21 am PT

    Xbox 360 exclusives being played on a PS3?? Come on!! How about you read an xbox exclusive game box it is written there ONLY FOR XBOX! Microsoft would not allow it

  • MichaeltheCM

    Posted Nov 1, 2007 12:21 am PT

    Ouch. sucks for them

  • Garren666

    Posted Oct 31, 2007 9:53 pm PT

    To afrothunda312: OK I guess on could call MGS4 a system seller (only in the fact that it's the most anticipated game coming out for the PS3). That being said the only people who it will affect are going to MGS fans who haven't been able to justify buying the console yet, and that's just because the MGS series aren't games I hear "Casual" gamers mention. I also never said that Konami released that MGS4 was to be released on the 360 though there have been strong rumours that it will be released on the 360 (though at a much later date (and from where I've been reading (also the info that I myself have taken from said articles))). Plus I agree with you that Square won't release those remakes, partly because I never said they were (I merely said I would love them if they did), but mostly because Square made those teasers to showcase what the games would look like on the PS3.

    To carljohnson3456: First off don't bother commenting on my comment if you won't even take the time to read my comment. Second of all I am definitely not an MS fanboy. Sure I may own a 360, but that's only because I buy the console that has the games that I look forward to most (In the current Gen of consoles that would be the 360), plus what defines me as not being an MS fanboy is that the Halo series does not interest me at all. I believe that after the first one it hasn't done anything for the FPS genre, plus each subsequent game has been more disappointing then the previous (Halo 2 being a much cleaner looking version of Halo with dual-wield, and Halo 3 being Halo 2 in HD). Now trust me if you would have asked me two years ago what I though of the (at that time) upcoming PS3 I would have said "It looks great and I can't wait for it to come out", but now with its (more than) lack-luster library of games (at least in my opinion (and several others)) my interest in the console is anything but high. Am I happy to see the PS3 doing poorly right now? No I'm not. I owned a PS2 and I thought it was a great console with hundreds of great games, quite alot came out within the first 6 months of the systems launch. I also believe that the (original) X-box was a rather poor system and only survived because of Halo. The only company I show ultimate die-hard loyalty to is Nintendo. I've been a Nintendo fan since I was 4. The only system of theirs that I haven't played was their failed Virtual Boy. So in the future don't judge somone based off on one comment, or (in your case) one sentence.

  • myownsaga

    Posted Oct 31, 2007 4:27 am PT

    thats nothing to do with arrogance.its just a strategic move from some of the best economic masterminds.those who u are not allowed to judge Agelu for the obvious reasons.a great loss was totally expected for the short period balances.. since sony put a market price for the ps3 lower than its cost a huge increase on sales was expected as it did..for the same reasons there couldnt be any profit rather an increasing loss.. but thats not the end of story.. watch and learn.. ill just give some hints: software/accesories inudstry/playstation network/blu ray industry

  • Agelu

    Posted Oct 31, 2007 1:25 am PT

    That happened to you for ARROGANCE, Sony.

  • buffdaddy69

    Posted Oct 30, 2007 1:58 am PT

    Bring Crisis Core over to the U.S. Then you'll probably sell some PSPs.

  • olthof

    Posted Oct 29, 2007 11:51 pm PT

    game over.

  • Temmehkan

    Posted Oct 29, 2007 6:53 pm PT

    Akillathenun it was 1.3 million sold in like 2 months. they have sold almost 6 million worldwide, and if you look around you'd be hard press to find a ratchet review lower than 9, consider in total there are only 3 below a 9, a 8.5 a 8.0 and gamesptots 7.5, so you obviously don't know what your talking about

  • darkride66

    Posted Oct 29, 2007 2:48 pm PT

    Agermemnon. I have no interest in explaining the dangers of attach rates to you or doing your legwork for you. Just google it. Click on the first article and read.

  • casinater

    Posted Oct 29, 2007 2:23 pm PT

    lol

  • Akillathenun

    Posted Oct 29, 2007 11:12 am PT

    "Akillathenun ok how about the negative tone of this article while others talk about the 1.3 mil ps3s sold they focus on the loss, or how they gave the new ratchet and clank a 7.5 where it is overwhelmingly praised everywhere else and the constant lower than the press average score for most ps3 exclusive games"

    1: Because any rational person would call 1.3 million sold in a year a loss anyway, so why bother wasting server space with two articles exactly the same?

    2: You say this "Ratchet and Clank" game is praised everywhere. It is clearly not, otherwise you wouldn't be complaining about the review.

    3: Because they had a particularly bad opinion to the PS3 games released so far. Wait until MGS4, that will get a 9.0, or higher. Then you can't argue that point any more.

  • Agermemnon

    Posted Oct 29, 2007 10:37 am PT

    @darkride high attach rates a bad thing for a console lol yeah i supose selling no games is better ?

  • sja28

    Posted Oct 29, 2007 12:25 am PT

    ok sony just drop the best and last card in play and thats the 399 sku if they fail that one omg they are doomd

  • darkride66

    Posted Oct 28, 2007 5:54 pm PT

    Agermemnon. Just google attach rates and read the first article that comes up. High attach rates are bad in the long run. That being said I buy all my multiconsole games on my PS3 now. For the couple of games that don't have the same framerate as the 360 version, I noticed it did nothing to affect their review score or affect the gameplay. So far I haven't been disappointed. I've been without my 360 for 5 month total since launch due to faulty units. I'll only play the exclusives on my 360 from now on, because it's proven (to me at least) to be unreliable. I hope I finally was shipped a "good" console this time around. I'm quite enjoying Halo and Bioshock.

  • Agermemnon

    Posted Oct 28, 2007 3:01 pm PT

    @pencilpusher nin saving the games ind from crashing lol er yeah thats why i don't know any gamers that have bought one , the 360 has an attach rate of 6.3 games per console as for the ps3 well it may sort itself out ? they need to get games out and fast though . i have like 23 games for my 360 and only 2 for my ps3 although i have had my 360 for longer there still ain't that many games i want to get for it still .

  • Fro66er

    Posted Oct 28, 2007 1:52 pm PT

    I often wonder if Sony had, lets say, 2 million PS3's for sale on launch day. I drove by 2 bestbuy and the line of people streached for 3 city blocks! I had the cash on launch day for a PS3, because of the extreme short supply I couldn't get one. Looking back, i'm glad I didn't buy a PS3 because of the lack of games I typically buy.
    However, had there been a PS3 for me on launch day, I would have one now.........buying some blu-ray movies, and a few games. Even if there were NO games i liked for the PS3, I'd still have a small pile of blu-ray movies - supporting sony's blu-ray format.
    Sony had the chance to infiltrate the market with Blu-ray players with their PS3, but they DROPPED THE BALL releasing only 80-120 thousand units. Seeing as the PS3 had already been delayed, I feel they should have delayed it at least 1 month to build more units for launch day.

  • pencilpusher69

    Posted Oct 28, 2007 1:52 pm PT

    fr33_loader "PS3 is said to be the most powerful console in the world. A console to end all consoles."

    And thankfully Nintendo released two systems that are basically saving the industry from the end of all consoles, or we'd be facing the second gaming crash.

    If you're not old enough to remember the first crash, go do some research and learn about how the mistakes of the past have been recycled again by Microsoft AND Sony. Companies that couldn't give a rats ass about gaming, but want to be able to beat their chest about who's got that market share.

    " It has all the great games exclusives coming soon."

    It has less than half of the exclusives coming that the 360 has, and 1/3 of the exclusives the Wii has.

    " It has bluray that will bring mind-blowing movies and incomparable games and sounds surround for extreme immersion. On top of that, bluray will bring games that is only possible with all the 50 gigs of goodness. Anything less than 50 gigs I guess is no good."

    Whatever. I have a Sony Bravia 44 inch television and standard DVD's still look good. Any comparison between HD DVD and Blu-Ray always includes the phrase "when we freeze frame the image and compare", which is to say that they can't even tell the difference while the images are moving.

    Most people will upgrade to one or the other when their forced to. Or did you not yet notice that the adoption rate on both new gen players is about zero? "Its got all the different variety of games which is never found in other consoles(others only have shooters). Its got a very good reliability and quality only Sony can do.

    Nintendo has, and this is a well known fact, the highest quality when it comes to reliablility of hardware. And since Nintendo as a publisher CRUSHES Sony's game publishing, I'll just chalk that up to you not being aware of how well Nintendo's games sell. (Which is directly due to their quality. Notice they won game publisher of the year again at the golden joysticks and pretty well every other award show?)

    "it's cheaper too over all you say with all its bells and whistles. Its destined to last for 10 years or more. Its got everything."

    Hey, the PS2, Gamecube, and Xbox could have lasted 10 years if the competitors to the PS2 were willing to allow the PS2 to sit on top of the hill as the market leader.

    A new system will be made before those 10 years are up by another company who wants to take down whoever wins this gen. It's going to be the same battle we've seen for the almost the last 30 years. It's really hard to believe anybody believes claims of how long a system will last since we know how the cycle repeats.

    " IF ITS SO GOOD, IT WILL SELL BY ITSELF WITHOUT YOUR HELP."

    That sounds like a Sony quote. "We'll sell 5 million systems even if there are no games, because people want that PLAYSTATION brand."

    "THEN I GUESS IT DOESNT NEED YOU FANBOYS DEFENDING IT. IF ITS ALMIGHTY WHAT ARE YOU AFRAID OF? Its got everything except sales! WHY DOESNT IT SELL? Makes me wonder."

    Never in the history of gaming has the "most powerful system" won a generation of sales, unless you count the SNES, which took probably 6 years to beat the Genesis. Though in reality the most powerful system was the NEO GEO at the time, and it got the PS3 treatment from the fans.

    Sony could have made a system that was twice as powerful as the PS2, and this goes for Microsoft as well, and if they had it would have made their fans JUST as happy. Especially since it wouldn't have cost more than a month's rent.

  • playstation_wii

    Posted Oct 28, 2007 1:39 pm PT

    Okay, it's been a year. No more programming excuses.

  • Doolum

    Posted Oct 28, 2007 2:52 am PT

    well,it will take them some time before they can make those profits from the PS3

  • memnoch2099

    Posted Oct 28, 2007 1:29 am PT

    the ps3 is the cheapest blue ray player hehehehehehehe

  • horioricorious

    Posted Oct 27, 2007 9:03 am PT

    goodbye.

  • Rei64

    Posted Oct 27, 2007 8:31 am PT

    lol i dont remember all this argument back in the days of genisis and snes. lol but i was a kid then so maybe it was happening and i just didnt hear it. i love video games. we all do or we wouldnt be on game websites talking about it so i understand "fanboys" ive been a nintendo fan boy for years. the ps3 is gonna do just fine. the 360 is doing just fine. but im worried about this talk of a new 360 with a built in hd player. if that comes out and you need it to play the new games...the tide of battle could shift very quickly.

  • Seedhouse

    Posted Oct 27, 2007 4:05 am PT

    Now... i've got to point out (having owned a 360 since launch myself, and now owning a PS3), that it took about a year for the Xbox 360 to really reach it's stride in terms of good quality games and console sales. Looking across at the PS3, this seems to just be doing the same- it's now a year since launch, and we're going to start getting the big name games that are going to start showing off the system; Haze, Uncharted, MGS4, along with (hopefully) some fantastic multi-platform games such as Devil May Cry 4 and Assassin's Creed. Of course, all these games could fall down, and i'll openly admit that I personally believe a bad choice by Sony to start selling PS3's at such a high price, and the time it's taken for these console selling games to arrive has been the consoles downfall. But it's surely now that the PS3 will start to take it's stride in the gaming market, so please give it a break and lets just see! Lol!

  • CLeRKSfan4life

    Posted Oct 27, 2007 4:04 am PT

    As long as there's a decent amount of games when I get a PS3 next year I don't mind how much money Sony is losing. Sony, as a company sucks, I hate them. But I have to admit, their consoles are great. The PS1 especialy is THE best console ever.

  • potatoesman

    Posted Oct 27, 2007 3:54 am PT

    why doesnt it sell fr33 loader? well coz the games are crap despite all your tripe talk

  • Agnosto

    Posted Oct 26, 2007 11:31 pm PT

    fr33_loader Also, PS3 has you writing posts about it.

  • fr33_loader

    Posted Oct 26, 2007 8:49 pm PT

    PS3 is said to be the most powerful console in the world. A console to end all consoles. It has all the great games exclusives coming soon. It has bluray that will bring mind-blowing movies and incomparable games and sounds surround for extreme immersion. On top of that, bluray will bring games that is only possible with all the 50 gigs of goodness. Anything less than 50 gigs I guess is no good. Its got all the different variety of games which is never found in other consoles(others only have shooters). Its got a very good reliability and quality only Sony can do. Its cheaper too over all you say with all its bells and whistles. Its destined to last for 10 years or more. Its got everything. IF ITS SO GOOD, IT WILL SELL BY ITSELF WITHOUT YOUR HELP. THEN I GUESS IT DOESNT NEED YOU FANBOYS DEFENDING IT. IF ITS ALMIGHTY WHAT ARE YOU AFRAID OF? Its got everything except sales! WHY DOESNT IT SELL? Makes me wonder.

  • MasterChief725

    Posted Oct 26, 2007 7:32 pm PT

    have fun with Guitar Hero III everyone!! WOOT!

  • MasterChief725

    Posted Oct 26, 2007 7:30 pm PT

    and darkride66:

    man lay off the 360! dude, look at some of your posts! jeez man, that is ridiculus. I dont wanna sound like a fanboy here, and I am not going to post again, so listen up! First off, 360 is outselling PS3 five to one. Second of all, 360 has hundreds more games than PS3 does. Xbox 360 has much better games than PS3 does. On gamerankings, PS3 has only 1 exclusive title in the 90s, ratchet and clank, and that could still fall. The xbox has titles that are, in the 7th gen, exlcusive to it, that are rated in the 90s. Many...Biooshock, Halo 3, Gears of War, Guitar Hero II, GRAW, COD 2, Forza Motorsport 2, and u can get GRAW, COD 2 for $30 on platnium hits, and Forza 2 (along with marvel ultimate lliance) is bundled with the pro and elite! That is a really good deal man! 360 is easier to develop for and costs less to develop for. Now on that note, PS3 has uncharted, haze, killzone 2, and MGS4 coming...will that be enough to overthrow 360? it is debatable...especially with my man master chief prowling the 7th gen...and even if it does...can it overcome Nintendo's wii, with maio??? i doubt....sony is in trouble..its no secret

  • MasterChief725

    Posted Oct 26, 2007 7:19 pm PT

    darkride66:

    wow man, ur doin a lot of posting, u must be on a frikin high level. I agree, they dont have a gun to thier heads, but Sony did announce that if gorilla games, or w/e messes up killzone 2, they will be disbanded, at least that is what my PS3 fanboy friend told me. That was his proof that Killzone 2 will be good. NOT SAYING IT WONT!! But, I was just making the point that the developers do not have free reign

  • darkride66

    Posted Oct 26, 2007 6:47 pm PT

    iory2. You might want to look into a period, or comma every now and then. Iorny2 said in a run-on sentence "anyway ps3 is not the most powerful hardware out there and i bet my life pc games will perform like crap on it and that is easy to understand cause pc is way too different from ps3"
    Actually, the PS3 is one of the most powerful systems commercial available to day. There is no debate about that. The only question is how will the developers use this power? Will they take the time to learn to use it properly?

  • darkride66

    Posted Oct 26, 2007 6:43 pm PT

    Ek-Andy. "If Sony are going to make a come back they have to act soon, otherwise theyll be buried by their competition." That's just ignorant. Why does Sony have to pick things up? They're selling exactly the same as the 360 did. They have a market. People are buying, not only their games but their Blu-Ray discs. They will continue to sell even if the Wii and the 360 fall off the face of the earth. I don't see that they need to do anything different. Did you criticize the 360 in it's life-cycle when it was selling this much?

  • darkride66

    Posted Oct 26, 2007 6:41 pm PT

    MasterChief725. The developers don't have a gun to their heads. They can make games for however the hell they want. Until Microsoft or Sony buys them.

  • Ek-Andy

    Posted Oct 26, 2007 6:05 pm PT

    "....Don't be ignorant, even with the losses, they are still selling way more than the 360 and the Wii with combined sales of the PS3 and PS2..."

    The PS2 will soon be obselete they cant rely on PS2 sales forever. If Sony are going to make a come back they have to act soon, otherwise theyll be buried by their competition.

  • Shivercraft

    Posted Oct 26, 2007 5:39 pm PT

    Yes Master Chief, Sony's losses doubled. Now instead of bathing in the blood of their fallen enemies (Nintendo and Microsoft), they are merely ripping off their heads and sh*tting down their necks.

    Don't be ignorant, even with the losses, they are still selling way more than the 360 and the Wii with combined sales of the PS3 and PS2, showing a holier-than-thou stance on this topic is like a kitten taking a swipe at a tiger, it is almost funny how much you fail.

  • MasterChief725

    Posted Oct 26, 2007 5:27 pm PT

    darkride66:

    of course Sony's first and second party developers are going to say they like developing for Sony, they make games exclusively for sony, what are they going to say? "we hate developing for Sony?" Come on!

  • MasterChief725

    Posted Oct 26, 2007 5:24 pm PT

    This is one of the greatest days in video game history, Microsoft reports profit, Nintendo announces new Execs, Great new game announced, and Sony's losses double....ahh...excellent

  • _AbBaNdOn

    Posted Oct 26, 2007 4:42 pm PT

    Whatever Sony would lose from making a 300-350$ 20gig ps3 that has the emotion chip is a hell of a lot less than what they are gonna lose if they dont do that. And the longer it takes for the them to realize that the more customers and fans they will lose.

  • iory2

    Posted Oct 26, 2007 2:05 pm PT

    anyway ps3 is not the most powerful hardware out there and i bet my life pc games will perform like crap on it and that is easy to understand cause pc is way too different from ps3

  • darkride66

    Posted Oct 26, 2007 1:40 pm PT

    chakan2 said "Development on a PS3, with the dev tools and sactioned by sony is already luicrisly (is that a word) difficult"
    Really? Because Naughty Dog said working on the PS3 was "...really exciting. We were thrilled at the opportunity to work on what I feel is the most powerful hardware out there right now and to do something that was brand-new and different." and "We can create, I would say, nearly as fast as we could on the PS2"
    Insomniac also doesn't seem to have any problems making kick ass games on the PS3 and sticking to their deadlines. So some developers are whining about making games, others appear to be doing it.

  • lamprey263

    Posted Oct 26, 2007 1:20 pm PT

    RE: "i just found something very interesting, apparently there is a team working on pc games to be able to be played on ps3".

    I wonder if Sony will embrace that in order to build up its userbase or go against it in order to support more of its 1st party titles.

  • dbzmaster5000

    Posted Oct 26, 2007 12:46 pm PT

    yeh hence me saying i have no idea im just stating what is mentioned on the site , and yes your right MS will go nuts hehe

  • chakan2

    Posted Oct 26, 2007 12:36 pm PT


    @dbzmaster5000



    It won't happen,



    A) Development on a PS3, with the dev tools and sactioned by sony is already luicrisly (is that a word) difficult. Now try to expand that and put a whole MS operating system on it, and have it run well. Impossible (in the near future anyway).


    B) If they did happen to succeed on that, MS or Sony will shut it down. There's too much money at stake. If people aren't buying Sony games, Sony makes no money.


    Besides, why would you buy a PS3 to run PC games on it? You can buy a decently fast PC for as much as the cheapest PS3 (or a small 3rd world country for that matter, and have them develop you a new console for the same price), and that PC will blow the doors off the PS3 or the Xbox.

  • dbzmaster5000

    Posted Oct 26, 2007 12:30 pm PT

    we will have to find out in time, this will truely test the ps3's capabilities, also if this does succed then , that means xbox's big three so far, gears of war, bioshock and halo 3 will be able to be played on a ps3 , but at this point i have no idea

  • chakan2

    Posted Oct 26, 2007 12:26 pm PT


    "i just found something very interesting, apparently there is a team working on pc games to be able to be played on ps3 "

    Good, at least someone is working on games for the PS3.

  • iory2

    Posted Oct 26, 2007 12:20 pm PT

    dbzmaster5000 hehe that would really be something but dont think it would run pc games faster than 10 fps specialy like bioshock

  • dbzmaster5000

    Posted Oct 26, 2007 12:13 pm PT

    i just found something very interesting, apparently there is a team working on pc games to be able to be played on ps3 , this includes titles like bioshock http://www.digitalspy.co.uk/gaming/a78532/ps3-to-allow-pc-games-to-run-on-it.html

  • pewens

    Posted Oct 26, 2007 12:13 pm PT

    To afrothunda312, "when did Konami say MGS4 is on 360? I don't think i've heard them utter xbox yet"

    it's not official but konami have HINTED that 360 will see MGS (maybe not 4 though). But unless you are a PS3 fan boy (it seems to be the only game they can go one about) who really cares, it looks crap! Blending in with the walls or floor.. give me a break!

  • iory2

    Posted Oct 26, 2007 12:02 pm PT

    darkride66 its really hard to do a comparison on a game that hasnt come out yet im comparing to the gt4 gt5 will probably be compared to forza 3 MGS4 will probably be a very very good game and i really wish i could play it but no way im gonna spen money on a second console because of it its just not worth it theres many games at mgs4 level on the 360 and thats what makes it so strong no one ever heard me say ps3 is bad cause i dont think it is just not better but sure as hell many people heard me say ps2 was the most overhyped piece of crap ever yeah they might cause thats what it is unlike the xbox hype that never existed what existed was a console 3 to 4 times more powerful than ps2

  • SkankinForFalco

    Posted Oct 26, 2007 11:59 am PT

    Darkride.. your my Hero.

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