"Improved performance" of game division helps electronics giant save $311 million; final annual report due out Thursday.
Though Sony won't issue its annual report until Thursday, the electronics giant today revised its earnings estimate for the 12 months ending March 31, 2010. Though the company still believes it will post a hefty ¥41 billion ($440 million) annual loss--only its second in 15 years--the shortfall was much less than the ¥70 billion ($752 million) it had predicted in February. During the prior fiscal year, the company lost ¥98.9 billion ($1.06 billion).
Why the drastic revision? Sony said that earnings from its Networked Products & Services division, which contains Sony Computer Entertainment, will surpass previous estimates by ¥10 billion ($107 million). The better-than-expected earnings were "due to improved performance within the game business" and streamlined VAIO computer manufacturing, according to the company.
Reduced costs in manufacturing LCD televisions also improved Sony's bottom line, as did lower-than-anticipated price declines of the devices. However, the ¥30 billion ($322 million) savings were all but wiped out by a ¥27 billion ($290 million) "LCD television asset impairment" related to "a decrease in the estimated fair value of property, plant and equipment, and certain intangible assets."
For the full year, Sony anticipates slightly lower revenues of ¥7.214 trillion ($77.46 billion) and an operating profit of ¥32 billion ($343 million)--way up from the ¥30 billion ($321 million) operating loss it had forecast in February. A survey of analysts conducted by the Wall Street Journal expects the company will return to profitability during its current fiscal year, which ends on March 31, 2011. The company posted a ¥79.2 billion ($871.2 million) profit for the October-December quarter, when it was in the latter stages of a massive restructuring that saw 16,000 jobs eliminated.
Sony officials have also stated than they expect SCE to return to long-term profitability this year. During the October-December quarter, the company sold 6.5 million PlayStation 3s, bringing its life-to-date sales to 33.5 million. New sales figures for the console will be available on Thursday when Sony issues its final earnings report.
As of press time, Sony shares were up 3.59 percent ($1.18) and trading at $34.08 on the New York Stock Exchange. Many stocks were up sharply today after the European Union announced a nearly $1 trillion plan to contain its debt crisis.
kavadias, you mentioned that "(in your personal opinion) the name Sony has always meant that you were purchasing a quality product." That's exactly what you said, despite the parenthesees. The mistake was kind of there, you just didn't happen to recognize it.
To be honest, sony's products are of top class quality, they last longer than most samsungs, sharps, sanyo.. really i am not being a fanboy or sony lover, but they have very high standards of electronic products. PS3 is an awesome product in many ways better than 360. but i personally think sony was trying to catch a niche market this time around, unlike in ps2 era where they wanted to hand over a ps2 to every guy and girl. look at thier games library for ps2 and ps3, ps3 library is far more superior and crown class than ps2. look at their first party games , their first party games are grand and believe me microsoft's first party games are few and not as remarkable as sony's atleast this time around (last guardian is on its way).
@lightwarrior179 dude, you are getting ripoff. just an example, their Memory Stick costs twice more than the same capability of other cards.
by the time they make $$$, its time to start again... eg, new console... @bennae66 , true, anything sony makes, someone else make it better and for a much fairer price. Have you heard sony is trying to gouge $10 000 for an 11" oled tv? sony will never rip me off....
@bennae66 If I remember right, they discussed the premium online accounts. Online will still be free, but if you want something more, like exclusives, and access to beta's, etc., you have the choice of paying whatever the price is to obtain it.
my 52" 1080p tv is a samsung; thier tech on thier lcd and led is up there with sonys, some surpass even. the costs not as high. sonys 'xplod' car sound systems are not as good as a pioneer, but they look flashy (if you look closely they actually look plasticky) thier vaio laptops are gorgeous but alot dearer than dell for an equivelent. (i run an xps 16" that is gorgeous also and diddnt cost as much) sonys home theatre setups are cheap, but they arent any good. their only 'shining light' is the ps3 and they are considering charging for online for a 'premium service.' i have a ps3 and am currently enjoying the hell out of disgaea 3 despite the fact that it makes my ps3 look like a ps2; but outside of this, i use my 360 more. why? because you get what you pay for with live. and people wonder why sony arent being as profitible as they should be? -polite reminder: no fanboyisim here, i have a 360, wii and ps3, so dont label me one eyed. i spend good money on good tech.
Sure not charging for online and investing heavily into first party studios is great for gamers but how much can sony bleed when Microsoft last quarter made over 13 billion dollars profit? Yeah when I game I want a company that won't go bankrupt and out of business.
sonys pc sales are lackluster and tv sales as well as pretty much all of their tech products don't sell. Why? They charge way too much for them! Why do I have to pay 400-800 dollars more for the same tv, sometimes the sony is even inferior! Same goes for their bravia, car audio (which is a BIG joke) and vaio. I think the only thing keeping them afloat is Columbia Pictures and now since Disney will make Spiderman movies, I'm not too sure about that.
Sony's gaming division has learned a lot this generation - mainly the fact that they're not the only cat in town any more. It's been a tough couple years for them, but at least they seem to be learning from their mistakes. Arrogance on the part of Sony went a long way to support their pretty astounding losses last year. Lets hope this year shows black figures, instead of red.
@demeor lol Oi you dozy bugger, I didn't say what the name "Sony" meant literally! What on Earth possessed you to want to correct a mistake that wasn't even there?
@Ancientdozier, I don't think their losses have much to do with reliability, as much as they do with loss of sales. Cost of goods and not producing the amount of sales needed are probably the main reason for the profit loss. I can only speak from experience but every Sony product that I've ever owned lasted or performed for a long time.I think their weakest area would be their car audio.
Don't listen to kavadias, the name Sony comes from the word sonus meaning sound. That showing that Sony makes the best sound products which many consumers want to buy. I really support them through PlayStation Home. I buy alot of stuff there. I hate to spend the money, but it makes me think how it's supporting them. PSMove will definitely make them money, and it won't just be the non-gamers, about half or less of those gamers will want it.
In my own personal opinion, the name Sony has always meant that you were purchasing a quality product. So I am happy to support them, as a consumer. It's good to see that they are clawing their way back after a nasty financial spell. They seem to have turned things around with the PS3 and their new leap into mainstream 3D TVs, right before the World Cup, might give them an even greater boost. That and the Q4 release of PSMove (you know how the non gamer go gaga for that sort of thing). We'll just have to wait and see.
they lose way less money selling PS3's then they used to. the original 60gb systems were sold for $600 and cost Sony around $200 more to make it.
Well its good to see that fortune is turning around, I own a PS3, PSP and a Spny HDTV, but that doesnt mean i dont own a 360 also, I wish for anything that brings good quality entertainment into peoples lifes all the success in the world
This article proves sony can sell tv's, blu-rays and computers. I did not see where it specifically mentioned the PS3. Sony itself is doing well. I cannot accurately comment on whether or not its video game sector is doing well.
When Nintendo profits slip, the story is presented in a negative way. When Song loses decrease (to half a billion dollars!), the story is presented in a positive way. Bias?
Whoopy do. Ps3 was launched to make blueray stick. And grats to Sony it has stuck. One product division operating at a loss for the promotion of a proprietary device. Blueray will be the standard disc to use in a few years.
Does anyone else consider that this may mean Sony is doing very well and was all part of their plan? Sony loses money from each PS3 they sell; that's been their plan all along. The more PS3 consoles they sell, the more money they lose. It's a short term loss, long term gain, and has been their plan all along. If you check their last annual report, they're still making profits from Blu-ray, TV, PC, stereo, etc. sales. That means that the PS3 sales are primarily accounting for their losses.
Companies have different monetary systems to the general public. They tout a 440 million dollar loss as an improvement simply because their overall budget goes much higher than that. It's impossible to go the virtuous route and try and relate companies to an ailing world, simply because there's no business that isn't in some way glad that a few million bucks were saved. It sounds surreal for anyone not in the business, but that's not a perspective that matters here. And seeing as the technology gets stronger, $60 is honestly not that much to me. The main reason is that games where I live usually cost $100. In comparison to that, $60 is indeed fair.
@dynomitemasta It's a multi-billion dollar business for flip sake. No need to get on the offended wagon.
There you go for trying to make over the top products to sell to the average consumer. Tsk tsk tsk Sony. I guess everybody fails once in a while
only 440 million?........ peanuts........ a lot of peanuts. We throw around these numbers like they don't mean much, but just think how many families would be set for life and way beyond with only 1 million... if Sony can lose this kind of money and brag about it like it's a good thing, I will NEVER ever feel sorry for them again... it's just gross the kind of profits these companies make, it's even sicker that people ( the loyal gaming community ) are brainwashed that $60 a game is a fair price...
Sony deserve these heavy losses after the horrors that are the PS3 and PSP. Sony have convinced me to never purchase another PlayStation branded product again, and this is coming from a long term PS fan.
@ snarl2 yeah i agree, ive actually just bought my first PS3 after only owning a 360 & a wii. And main reason is, is because of the exluisives like GOW3 and Killzone etc etc. And after i looked at my games libary i noticed nearly all my games i have i can get on the PS3. So yeah looking forward to playing it once it comes through the post.
Sony is not in dept. To us losing 440 million dollars is a HECK OF A LOT OF MONEY! But Sony is a billion dollar company who makes up for it. You have to spend money to make money. And there making more then what there spending on. Yes there losing money from the PS3, but its recovered from all the other stuff that they make! Some people(MS nerds) don't realize how huge Sony is.
@godzillavskong If they were reliable, Godzilla, they wouldn't be losing as much as they did, though some reliability can be claimed, I guess, by the reduction in losses. @brad12d3 Right on, man. That's how you do it.
I love Sony despite not currently owning a PS3. Their HDTVs are amongst the best (perhaps 2nd to only Samsung) and most of their other tech products including PS3 and digicams are pretty damn good. It has become kind of a routine for big companies to report losses when they've had so many divisions involving different products. Not every product has made a similar growth post-recession period in the world and perhaps that can be a possible reason attributing to the high losses. The fact that the rumoured loss is already less compared to the initial estimate is a sign that things are improving. And the 1 trillion dollar EU credit boost into Greece will help improve matters I guess.
Sad to see a great company lose money like that. I love my Sony Bravia tv, and I think Sony is one of the more reliable companies out there, so its a shame to see them get hit with losses like that. I believe they will rebound, especially since their PS3 already has, and get back the $$ they lost.
@ SithLordVenom I love them all, although I can't remember the last time my Wii was hooked up. I get tired of "non-general" fanboyism. I will defend the PS3 against stupid claims by Xbox fanboys just the same way I will defend the Xbox against PS3 fanboys. The both are due credit and it's stupid to think one is so far superior than the other. I play both about equally, but like I said before each one has it's own strengths and weaknesses. The point I was making that people missed is that when it comes to over all package... the PS3 is a little bit of a better value (partly because of blu ray) but the 360 is more consumer friendly as far as making more things optional and allowing people to get a system at a lower price point. But overall there isn't much difference. I don't discuss quality of games because that's subjective. Everyone has different taste.
@brad12d3 I am a fanboy too. But I like ps3, xbox360, PC, and my psp. I am a general fanboy, not like this specific fanboys. LOL!!!!!!
@brad12d3 Oh my God man, who cares? You wrote all of this up only for us to laugh at. They're simply consoles, stop wasting your time with frivolous details in a Console War argument. People are idiots. Do you all just skim posts and make assumptions? No wonder this country to going down the toilet, people don't even take the time to read. Go back two pages and when I first posted and read the whole conversation. From my first post "Neither the PS3 or Xbox is outdated or better than one another. They have different strengths and weaknesses. " Ugghh that is total fanboy talk isn't it? Actually the real fanboy talk is about to come when the fanboys still try to label me as one. The whole reason I wrote all that was to neutralize the talk that one console is better than the other, or was being overpriced. Guess what people... they ARE BOTH GREAT!!! OH my gosh!!! I have both and love both, I love some things about the one more than the other but I play them just as equally. So yes I must be a fanboy.
@ izmickey I am not trying to make the PS3 look bad. I love my PS3. How else would I play Heavy Rain, Demon's Souls, Uncharted. You obviously didn't read my posts very carefully. Earlier I said that neither console was really better than the other. However, the Xbox does give the consumer more options so if someone didn't have a lot to spend they could still find a way to get a new gen console like I did when the 360 first came out. I was called out that somehow what Microsoft charged for the separate accessory items to create the full package equal to the PS3 was outrageously overpriced compared to Sony. So I did a price break down to show that there really wasn't that much of a difference. And that included the Xbox person buying a separate Blu ray player to make it completely even. The total price of the Xbox side with the Blu ray player was $40 more than the PS3 side. So no I was trying OH SO HARD to make PS3 look bad. Just correcting a Sony fanboy like yourself.
Companies of this size will always face a few quaters/years of loss's as it comes out of a recession, especially when its products are luxeries. Sony will bounce back, its a household name which will be around for longer then any of us.
Some of you need to brush up on your reading comprehension skills. The gaming division still lost significant money; it's the cell phone and tv divisions that are covering up for the continued hemorraging in the gaming division. It's good that the losses have been reduced, but it's not so good when you consider that by this stage in the console cycle the company is supposed to be a few years into the profitable side of the lifecycle when they recoup the intial R&D (both MS & Nintendo's gaming divisions have been profitable for years).
chupamelpo what the hell are you talking about? Sony is a huge conglomerate, with different divisions. They have Sony Ericsson, they make phones and i know they make losses. Sony Entertaiment to make games. Sony Music, etc. It is remarkable that with this kind of losses they are still investing in games.
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