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PS3, PSP sales rise as Sony posts first loss since 1995

  • By Mark Walton, GameSpot UK
  • Posted May 14, 2009 4:28 am PT

PlayStation maker hit hard by strong yen and falling electronics sales; net loss of $1.03 billion reported, games division posts $612 million operating loss; PS2 sales plummet, but PS3 software shipments skyrocket to 103.7 million units.

Earlier this year, Japan's Nikkei business news service predicted that Sony would end its fiscal year with an operating deficit in excess of $2 billion, a significant contrast to the company's own forecast of ¥200 billion ($2.1 billion/£1.4 billion) in operating profit.

Unfortunately for Sony, the results were at the very bottom end of Nikkei's predictions, with the electronics giant today posting an annual operating loss of ¥227.8 billion ($2.38 billion/£1.57 billion) and a net loss of ¥98.9 billion ($1.03 billion/£682 million)--its first since 1995. A company's operating margin is defined as sales minus the cost of goods sold and administrative expenses. Net income includes deductions relating to taxes, as well as changing values of a company's assets and other factors not directly related to sales.

Sony, which late last year announced that it would be slashing 16,000 jobs and would undergo "sacred-cow slaying" changes to cut costs, has blamed the strong yen and the current economic climate for the losses, which lie in stark contrast to last year's profits of ¥374.5 billion ($3.9 billion/£2.6 billion) and Nintendo's significant revenue increases this year. Anticipation of losses in the earnings announcement caused shares to fall 6.8 percent this morning.

The games division, which encompasses PlayStation 2, PlayStation 3, and PSP hardware and software, saw an operating loss of ¥58.5 billion ($612 million/£403 million), an improvement on last year's loss of ¥124.5 billion ($1.3 billion/£859 million), which Sony is attributing to an improvement in the PS3 business and reduced hardware manufacturing costs.

Overall, game hardware sales were down, due to significantly slowing PS2 sales, with the PS2 hitting 7.91 million units, a decrease of 5.75 million over the previous 12 months. However, sales for both the PSP and the PS3 were up, selling 14.11 million (an increase of 300,000) units and 10.06 million (an increase of 940,000) units respectively.

Software sales for both the PS2 and PSP saw significant dips, with 83.5 million pieces of PS2 software (a decrease of 70.5 million) shipping and PSP software shipments down 5.2 million units to 50.3 million units. PS3 software sales, however, saw a massive jump, up 45.8 million units to reach 103.7 million shipped.

Sony presented a bleak outlook for the next 12 months, forecasting a net loss of ¥120 billion ($1.3 billion/£827 million). Sony also warned that there would be an overall decline in the games business, due to the likely change in value of the yen and a further decrease in PS2 sales, and expects that it will record a loss again next year. The firm remained optimistic about the PS3 business, however, which it expects to improve in profitability due to reduced hardware costs and an "enhanced" lineup of software.

372 Comments

  • LordAragis

    Posted Jun 19, 2009 12:40 pm GMT

    hardware costs for ps3 were reduced? does that mean new ps3's are cheaper and possibly have less quality? I did hear some rumors that most of broken ps3's were new versions and there were very few breakings in old versions like the 60 gig.

  • mido321

    Posted Jun 4, 2009 7:35 pm GMT

    BRING THE MGS

  • tenlong

    Posted May 28, 2009 11:40 pm GMT

    Good for sony. Now just keep the exclusives coming you might break even this year.

  • rohail88

    Posted May 28, 2009 5:01 pm GMT

    @cabal

    I didnt mean sony losses for their whole company to be low!i meant for their gaming division...their losses the year b4 last was 2 billion, last year 1 billion...and this year 612 million...so their losses keep going down...with the exclusives coming and even multiplatform games selling good as u can see the profits from software sales are good,psp go! to be released soon,little profit from ps2, sony has a good chance of breaking even next year(gaming division)...im not saying its guarenteed but its possible enough

  • brendanhunt1

    Posted May 19, 2009 2:30 pm GMT

    just to say that this has nothing to do with the gaming division, its mostly to do with the massive research sony has paid into future technology including blu ray and oled. it might pay off soon though

  • CamiKitten

    Posted May 19, 2009 5:45 am GMT

    Sony posts it's first loss, then it has a sales increase? It's a pity party . Course I can't knock it since the majority of my entertainment has that logo marked all over it (ps3, tv, headphones, psp, ect) .

  • Cabal23

    Posted May 19, 2009 5:32 am GMT

    @rohail

    How will Sony recover from an already deep losses? They have to make profit to cover the losses for this year and then increase profits next year. Not to be a naysayer, but I can't really see how they plan on doing that. A few hit games will not bring them out of their slump. The problem is the rest of the company, not the gaming division. As stated, no one cares about how tech advanced their tv's and blu-ray players are. I think if they really wanted to restructure they would make the gaming division separate from the rest of the company. It looks like their arrogance has them in a pickle now and any financial analyst will tell you it is going to take an act of god to help them recover this year. It is very reminiscent of what is going on with the US government now. You can't just spend yourself dry without a long tern goal of how you are going to recover those funds. Not to mention hopefully make a profit on top of all that. I don't need Jim Kramer to tell me to sell, sell, sell that SNE stock.

  • cashkilla_basic

    Posted May 18, 2009 10:46 pm GMT

    I just bought a 360 recently. I was leaning toward the PS3 because I wanted blue ray. What made me change my mind? The price difference, and the better graphics of the 360 helped, by the PS3 fanboys really drove me away. PS3's rabid fanbase might be the best thing that ever happened to the 360.

  • biggy887766

    Posted May 18, 2009 9:24 pm GMT

    Let's face it sony is getting to far ahead of itself...blu-ray is still 2 or 3 years off from going mainstream, and that extra $100+ hardware in the ps3 is turning off the consumers because of the higher price point than lets say the wii or 360...and since the recession people cut back on spending so much on electronics. Most people don't care about a 120 hz or 600 hz refresh rate on a tv and to them they just see an extra $2000 tagged onto the product. With vizio offering great budget flat screens and open boxes at Sears being steals theres no reason to spend that $3000-$6000 price on a Sony.

  • bestco

    Posted May 18, 2009 5:07 pm GMT

    Read between the lines. MS 360 Sales were up 30% at the end of April. The entertainment and device division as a whole was down, which the gaming division is a part of. That division is down because of slumping PC sales. Also the Zune is part of that division. We all know how that is doing. So there is more to this convo than you are letting on to. Not to mention MS's cash on hand was up 2 billion. Cash in 2008 - 23 Billion
    Cash in 2009 - 25 Billion . All of this can be found on this website.
    Also Windows 7 is on the horizon. Love it. Hate it. It will help MS recover lost profits this year, What does Sony have coming down the pipe to boost its overall sales? Nothing but another flatscreen tv that umpteen million other companies make now. I smell defeat.

    ---------------------------

    I agree with you on the future of MS, they are definately looking good with the upcoming Windows 7 and other PC software.

  • rohail88

    Posted May 18, 2009 12:49 pm GMT

    I dont think there will be loss next year unless recession goes even worse or if they cut price!

  • SalarianChemist

    Posted May 18, 2009 12:29 pm GMT

    I was watching ABC news talk about Sony's financial loss. The videogame part of Sony was blamed for the majority of this loss, combined with poor performance in electronics.

    The news said, "The reason why videogame hardware sales had decreased for the PS3 was because there were no 'hit' games released."

    Everyone agrees that this truly was a slap in the face to Sony and Killzone 2, because that is the time period when Killzone 2 was released. But, that's what Sony gets for telling all those lies about Killzone 2 and generating all that false hype that the game failed to live up to.

  • Cabal23

    Posted May 18, 2009 5:53 am GMT

    @ artson1966

    Read between the lines. MS 360 Sales were up 30% at the end of April. The entertainment and device division as a whole was down, which the gaming division is a part of. That division is down because of slumping PC sales. Also the Zune is part of that division. We all know how that is doing. So there is more to this convo than you are letting on to. Not to mention MS's cash on hand was up 2 billion. Cash in 2008 - 23 Billion
    Cash in 2009 - 25 Billion . All of this can be found on this website.
    Also Windows 7 is on the horizon. Love it. Hate it. It will help MS recover lost profits this year, What does Sony have coming down the pipe to boost its overall sales? Nothing but another flatscreen tv that umpteen million other companies make now. I smell defeat.

    You can analyze MS's P & L for all divisions here:
    http://www.techcrunch.com/2009/04/23/microsoft-reports-a-massive-miss-with-net-earnings-down-32-percent/#comments

  • Cabal23

    Posted May 18, 2009 5:24 am GMT

    @ Asavar_Pukor

    You would have a point if anyone cared about blu-ray. Most gamers couldn't give a flip about blu-ray. I will not invest in a new media type, for mildly better resolution of my movies. Does it change the resolution of my 600+ dvd's? No. Does it better my gaming experience? No. I have my 360 and a shelf full of games. No need to buy into the marketing disaster that PS3 was/is. Their expected sales figures are so far off for the PS3 that Sony has to make serious changes. My favorite quote of the article, "Sony also warned that there would be an overall decline in the games business ."

    I guess you will be watching a a lot of blu-ray movies. Enjoy.

  • nate1222

    Posted May 17, 2009 10:13 am GMT

    Wow, what a shock? PS2 has been paying the bills generated by PS3 and PSP. But, eventually, even that can't fix things. PS3 and PSP aren't 'bad' consoles. They're just impractical. PS2, on the other hand, was very practical. The damn thing costs only $100, has tons of good cheapies and doubles as a DVD player. That appeals to most people way better than hyper expensive tech. Now the problem is so many people ALREADY OWN PS2s -and there are plenty floating 'round 2nd hand (used at Gamestop/EB, pawn shops, etc...). How do you get people to buy what they already own? And forget about "upgrading", most people aren't even interested in PS3. I'm still a Sony fan, mostly for PS1 and PS2, but they're in quite a pickle here.

  • cheokdoc

    Posted May 17, 2009 4:26 am GMT

    @ MagicOneUp

    360 has better games than ps3? please tell me?... let me guess halo and halo and halo and gears of war. they both share almost all games, while the ps3 already has better exclusives and still have big hitters like God Of War3 and GT5 to come . you must be trying so hard to convince yourself.

  • Asavar_Pukor

    Posted May 16, 2009 11:53 pm GMT

    @ MagicOneUp,
    The XBox 360 Elite + Blu-ray player = $1000+
    PS3 = $800

    Do the maths, idiot.

  • MagicOneUp

    Posted May 16, 2009 8:52 pm GMT

    @ brendanhunt1
    you're not that bright, ps3 the is a rip off. kick yourself in the head for getting one. next year its gonna be as the UMD

  • MagicOneUp

    Posted May 16, 2009 8:48 pm GMT

    how can sony forecast a $2 billion profit when in actual fact they are losing $2b?!!! just reading the first paragraph of this article. 2009 is the last year for their game division... thanks for the blu ray but no thanks, don't want/need

  • MagicOneUp

    Posted May 16, 2009 8:41 pm GMT

    its time to get rid of the Playstations... and start making TV's again. Did anyone know that the Bravia TV series are NOT made by sony?? The ps3 are over priced and the games are below par to the 360's

  • matrixman2k

    Posted May 16, 2009 4:12 pm GMT

    The game is getting serious little by little and there will be victims, hell, everyone's losing their homes and jobs etc. why is this any different?

    Add Sony's poor record of media format and it isn't that surprising. Take all the previous format (go look it up on wikipedia) and their failure... "the walkman for the 21 century" is nearing it's eventual death, followed by the blu-ray!

    Well, it ain't going anywhere fast - according to all the media coverage I've read recently and the adaptation in the US at least.

    Oh well, when their ace (FF13) is released and things remain as they are... i'm going to leave it there 'cos that title will be available on 360 in the west anyway...

    Maybe that game (FF13) will just make a bit of noise for a while and disappear from the charts allowing things like the Wii balance board to take top position again... like RE5 and SF4, but hey it was good while it lasted. Trouble is there's just too many casual gamers, who spend cash and pirate less. Also the vast majority of them being older probably retired gamers and ladies bunch of granddads you might say while crying out for a hardcore title. News for you guys even MS and Sony are trying to cash in and provide for these new treasure trove or diamond mine Nintendo uncovered!

    But Nintendo are getting hammered in their home country only 'cos of a demo of FF13 so we'll wait and see. The one trick pony is no more and there's no sure bet.

    Bye, Jon.

  • fiskefyren

    Posted May 16, 2009 9:38 am GMT

    well... i just need the ps3 to be a bit cheaper to buy and then i'm all in for it ^_^
    but more sales and hopefully it will get cheaper... unlike that ****** company... what was it called? oh yes! nintendo or something... i think... i dont recall xD that makes their always terrible ****** console even more pricely O_o
    and here i wonder why i will never buy any of their stuff... EVER! just like i will never support microsoft because of their terrible OS'es.

  • brendanhunt1

    Posted May 16, 2009 5:35 am GMT

    @shani_boy101
    i got a ps3 anyway

  • brendanhunt1

    Posted May 16, 2009 5:34 am GMT

    @shani_boy101
    hey i love the ps3, i atually think the ps3 is a brillant price for what your getting but others want a price drop.

  • spellmad

    Posted May 16, 2009 3:43 am GMT

    theres one thing missing for the ps3 in the western world anyway theres no RPGS in asia they have white knight/demon stone think thats what its called . theres no confirm yet has to if they are comeing out in the us or eu seems odd that aaa titles rpgs and no release confirm.

    and if they are confirm what year are we talking 2011 ?? takes way to long to release stuff in the eu anyway we have to wait half a year from a us release.

    i have a 360 to but it would be great to see a rpg on the ps3 anytime soon.

  • Makhdoom82

    Posted May 16, 2009 3:29 am GMT

    Make the console even cheaper sony so that i can buy it ... come on do it for the fanssss

  • markB0SS

    Posted May 16, 2009 2:47 am GMT

    hopefully they will pull through o.k., even if I did sell my ps3.

  • shani_boy101

    Posted May 15, 2009 10:01 pm GMT

    @brendanhunt1
    dude, i bought one exactly a week ago and it cost $688 Australian, which is US$515.51, so shutup, you got a good deal up there so quit complaining cos even at the price down here, its the best value (built in wifi, free online, upgradable HDD, Blu-Ray, store and play most forms of media, quality controller, great games) and quality console/media centre ever made.

  • artson1966

    Posted May 15, 2009 9:57 pm GMT

    @ chimp, I am at a loss how you got the numbers for MS's gamning division making a profit this last quarter, The numbers I see is they lost more then sony Did in it's gaming division. I also see you can't read teh whole article as these numbers are for the whole year ending 3/31/09
    Last year MS did have a couple profitable quarters, but cit it's throat when it reduced the consoles retail prices far below the cost to produce. Topped off with lower software sales had a quarter loss of over 300 million. Sony's 260 million 4th qt (1st qt 2009 MS) I get very bummed when good debate gets side tracked with mis facts. the only console at this momment thats making real profits is the wii. high sales with each unit being sold equals a profit not a loss as with the case of Sony's and Microsofts consoles.

  • hatieshorrer

    Posted May 15, 2009 7:47 pm GMT

    @mgreco_1988

    Im with you the Playstation division has racked in losses ever sense the launch of the Playstation 3. Now due to the economy ALL of Sony is taking in losses. As a Sony rep. put it "There are always going to be people who would like us to give it away for free."

    Also I think the Playstation Fanboys are the worst enemy of the Playstation 3. Always complaining that Sony wants to sale its console for a profit and that it should be sold at a loss no mater the statues of the Playstation division.

  • brendanhunt1

    Posted May 15, 2009 2:47 pm GMT

    in january 2008 sony said the ps3 cost $400 to make, they should aleast be able to afford a price drop of $50 to $100 by now

  • El_Conrado

    Posted May 15, 2009 1:23 pm GMT

    Zerabp:
    "While you are right completely sluff is as well."

    My reply was actually directed at Mr Tweedy, not sluffmochildeater.

    I made a mistake when quoting Tweedy that made it seem I was quoting slush.

    It's been corrected. Sorry for the confusion.

  • ico92

    Posted May 15, 2009 1:23 pm GMT

    @eastcoast93
    did you even read the article although sony has lost money ps3 sales have risen in fact the ps3 isnt that far behind the 360 if you visited N4G.com(games news website) the ps3 is startin to close in on the 360 sales try reading an article before posting and ignorrant comment like "the ps3 was not right from the beggining"

  • mgreco_1988

    Posted May 15, 2009 11:22 am GMT

    sony cant afford to cut the price of the ps3. they lose too much money per sale as it is.

  • chappy_man

    Posted May 15, 2009 10:58 am GMT

    drop the price on the ps3 and it will sell, i know it might be a hard loss but at this point the cut could actually benefit them.

  • GaloBranco

    Posted May 15, 2009 10:41 am GMT

    I hope that Sony´s share of market is recovered, because of the monopoly that M$ is trying to induce the companies making the games exclusives and DLC exclusives...

    It would be a loss for all the players if sony dropped the console making like Sega.

    Go Sony!!!

  • Blink3r

    Posted May 15, 2009 10:36 am GMT

    Aw no biggie... i bet they will get better in no time!

  • Zerabp

    Posted May 15, 2009 9:35 am GMT

    @El_Conrado

    While you are right completely sluff is as well. Just because a monoply is "legal" does not mean that it didn't become such without coersive acts and tactics. Inevitably all "legal" monopolies only exist because of such tactics. In a truly capitalist society a monopoly would only be able to be maintained if said monopoly was always the best choice for the consumer, and would have to work hard to maintain its monopoly because it that kind of society it could be easily lost without unconstitutional laws (all legal monopolies exist because of these) that prohibit others from competing. So again you are 100% right as was Sluff.

  • El_Conrado

    Posted May 15, 2009 9:04 am GMT

    Mr_Tweedy:

    "Depends on how you define "monopoly." A company having a monopoly doesn't just mean that they control a given market. It means that that company is the ONLY source of a given product or service."

    I'm not trying to contradict you here, but according to the dictionary a monopoly is any of the following:

    1. exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices.

    2. an exclusive privilege to carry on a business, traffic, or service, granted by a government.

    3. the exclusive possession or control of something.

    4. something that is the subject of such control, as a commodity or service.

    5. a company or group that has such control.

    6. the market condition that exists when there is only one seller.

    So yes, when a company is the only provider of a given commodity or service, is has a monopoly over that commodity or service, but that's not the only form of monopoly there is

    If you are referring to only one kind of monopoly, please make sure to state so. I'm talking about monopolies in general.

    "Monopolies only exist where they are somehow enforced. The market will naturally erode any monopoly that is not protected."

    Again, there are many real world scenarios that prove that this is not the case. From government-sanctioned policies on goods to corporations fusing with one another to become the single largest producer of services, these kinds of monopolies still exist and will exist in the future.

    When the large companies join together and form a single consortium to regulate (read: fix) prices in the international market, you have a monopoly.

    When the largest provider of a good or service is the sole determinant of that good or service's price, you have a monopoly.

    When a single company is the sole legal owner of the entire water supply of a country, you have a monopoly.

    But if you believe these monopolies will naturally disappear on their own volition due to market fluctuation, without active involvement of a mayor legal organ on behalf of the people, we'll have to agree to disagree, because I don't think that has ever happened before, not with real monopolies.

    Oil, alcohol, air travel and most recently, software monopolies have all been broken by legislation, not market change. (And in the case of software, I don't think legislation has succeeded. And I'm not talking about OS prices.)

  • Mr_Tweedy

    Posted May 15, 2009 8:35 am GMT

    @El_Conrado

    Depends on how you define "monopoly." A company having a monopoly doesn't just mean that they control a given market. It means that that company is the ONLY source of a given product or service. It's Brand X or nothing. If it's possible to buy Y, then X does not have a monopoly.

    When government comes in and starts favoring some companies over others, you're getting away from capitalism and the principle applies less. (Of course X will have a monopoly if Y is illegal!) But even for something like electricity, I would argue that your local utility does not have a monopoly, because you can install solar panels or a windmill, and get electricity that way. There are many sources of water: You can buy a dozen different bottled brands, or purify your own water. It's not a monopoly if you can the product from another source.

    Monopolies only exist where they are somehow enforced. The market will naturally erode any monopoly that is not protected.

  • El_Conrado

    Posted May 15, 2009 8:18 am GMT

    Mr_Tweedy:
    "I was stating a general principle: Monopolies are unnatural and never survive long on those rare occasions that they do arise. The only way for a monopoly to be maintained is through the use of coercive (mafia-type) tactics, at which point we aren't talking about capitalism anymore."

    That's a nice principle, but unfortunately it doesn't really apply to the real world.

    Our word is chock full of legal monopolies, from the Diamond Cartel, to the eastern oil corporations, to local, government-sanctioned monopolies on services like water and power.

    So monopolies do exist, and can exist for years.

    But I agree that Sony isn't one.

  • Noctobum

    Posted May 15, 2009 8:04 am GMT

    @x_wolverine

    MGS4 port is still a rumour. Again, I wouldn't doubt it given how many things that were exclusive are being ported, until it is official can it be confirmed. As well, not every previous MGS has been ported. There were a couple of ports to the PC, with MGS2 Substance ported to the xbox as well. Most of the MGS games were made for the PS, PS2, and PSP. I think there was that one GC MGS too. No worries, Sony won't fail nor go away. It's basically a rebuild. It's like when MS launched Xbox which was the most tech advance console - it came out later than the PS2, the pricing was freaking high, and to top it all off, the damn machine was huge! Now they've bounced back with the X360 even with the RROD!

    Most companies out there are announcing losses. This isn't really a surprise. Hell, MS cut jobs too.

  • kavadias1981

    Posted May 15, 2009 6:28 am GMT

    @mpeg3s

    Almost every major corporation is suffering at the moment but they don't just close down, especially massive international ones like Sony. You perhaps have issues with Sony? Please elaborate for us.

  • lowkey254

    Posted May 15, 2009 6:27 am GMT

    mpeg3s you're not very bright. Sony has their hand in every entertainment venue and you think their going away?

    "What a Maroon" - Bugs Bunny.

  • lowkey254

    Posted May 15, 2009 6:25 am GMT

    So basically they should have cut the ps2 development and dropped prices for the ps3. I promise you their losses would be halfed in the games division.

  • Mr_Tweedy

    Posted May 15, 2009 6:08 am GMT

    @sluffmochildeater
    No, Sony is not a monopoly.

    I was stating a general principle: Monopolies are unnatural and never survive long on those rare occasions that they do arise. The only way for a monopoly to be maintained is through the use of coercive (mafia-type) tactics, at which point we aren't talking about capitalism anymore.

    Sony is not a monopoly, but the principle still applies that a company can overextend itself. Once it reaches a certain size (different in each case), it becomes too difficult to centrally control. Efficiency will decline, and with it both profit and product quality (which will hurt profits in itself).

    Sony has reached that point: They're too big to respond effectively to challenges from competitors or from the market, and they're deeply involved in almost every sector of the economy, which makes it impossible to focus on doing any one thing well.

    It is naturally that Sony would suffer some losses and shrink back to a more manageable size. The poor economy has made this correction more severe, but it isn't the root cause.

  • Alexadecimal

    Posted May 15, 2009 5:22 am GMT

    In this economic climate, I'm sure Sony expected a loss sooner or later. It wouldn't surprise me if they actually made a loss on PS3 consoles. It's the volume of games sold that makes money, maybe many PS3 owners don't have that many games for their console. I'm sure Sony will be out of the red by Christmas though.

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