Network now...FEATURE
Cold Wind Bites Sony...and Even Nintendo Feels Chill
Sony and Nintendo posted their quarterly financials today, with the former, as expected, delivering a deathly drop in sales and profitability, while the latter, though in much ruder health, saw a profits drop as well as a downgrade in hardware projections.
Nintendo has reported total lifetime sales of 96 million DS consoles as well as 45 million Wii consoles, two records which have driven the company’s sales rise up 16.7 percent for the nine-month period ending December 2008.
Yet the company expects sales to take a turn for the worst in the remaining fiscal year. Though it has revised forecasts of DS sales up, expecting additional growth of 3 percent, Nintendo expects software for the handheld to drop 7 percent below previous expectations. Wii hardware too has seen a revision in sales projections, with Nintendo trimming its expectation both software and hardware figures down by 3 percent.
Unit turnover saw the company enjoy $17 billion in sales for the nine month period, with operating profit also climbing some 27 percent to $5.6 billion.
Yet the firm, citing the strong yen which has stung export trade, saw net profit drop sharply; falling 18% to $2.4 billion. Now the company expects its net income to shrink from previous projections, down from $3.8 billion to $2.55 billion; down a third on original expectations and falling over 10 percent year-on-year.
Sony's Troubles
Sony has posted an operating loss for the quarter ended December 08. The company says it sold 4.46 million units PlayStation 3 during the three months, down from 4.9 million units (down 9 percent ) a year earlier. PSP sales were down from 5.76 million units to 5.08 million units.
Profit for the October-December quarter fell to 10.4 billion yen ($114 million), down from 200 billion yen a year ago. The PlayStation manufacturer posted an operating loss of 18 billion yen, compared to an operating profit of 236 billion yen last year. Revenues were down from 2.86 trillion yen to 2.15 trillion yen. Sony says it expects to post a loss for the year. The games unit suffered a 97 percent drop in operating profit.
Earlier this month Sony boss Sir Howard Stringer said, "demand has decreased, currency exchange rates have become dislocated, consumer credit has been stifled and some of our biggest retailers have been liquidated." The firm has said that it plans to cut 10 percent of its workforce in an effort to save costs.
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Will this really affect Nintendo? aren’t they the only company that makes a profit on a sale of a console?
I think combining Nintendo and Sony in this article is fine, as it really emphasizes how much of a factor the value of the yen is to these Japanese companies in this environment.
Not to mention what a massive kick in the teeth it is for all concerned...
I don't want to come over all Naroz.
One thing I do hope over the coming months and years, as speculations grow about the world economy and our financial woes. I hope the Big Three (Microsoft, Nintendo and Sony) are going to be alright in this. We've already seen some big player being punished for overstretching themselves and a huge cull of the workforce in cost saving exercises.
It would be really disappoint if any of the current players fold. I hope many of you will share this sentiment.
This could just be my rampant paranoia; I think we're all secretly fearful of this, given all our posturing!
Wouldn't that be a travesty if any of the 3 players caved? I don't see it happening, and I hope it doesn't. As much as I have disliked Sony over the years, I think competition breeds quality titles and games ultimately would suffer if there were no Sony console around. (Just used Sony hypothetically as I think it'd be the same if any of the consoles ceased production).
How you guys can put Nintendo and Sony in this same type of article is beyond me.
Nintendo raked in billions for the quarter in pure PROFIT and sold more Wii/DS units than they did last year. The only negatives is that they made a few billion less because of strong yen and they cut Wii shipment forcasts by just 3%, IIRC.
Sony posted only a $4 million for the quarter in the game's division (seems a bit padded to me, so expect next quarter to show a montrous loss), sales were down for the entire Playstation family, and they're projected to lose billions for the whole fiscal year - which we'll see next quarter.
The EDGE barometer needs to be recalibrated, it seems! Those are two totally different situations... One company is extremely well off. The other... not so much.
Considering all this information was already released earlier today, individually, under the articles titled "Nintendo Cuts Wii Sales Forecasts" and "PS3 "Decreased Demand" Slams Sony," why this article was posted at all is beyond me. Isn't it just restating the same information?
Fair Comment.. I was wondering that..
In my humble opinion. I don't think any of the big three are going to be exempt from a sharp decline in sales given the circumstances. I think this article tries to illustrate that, although, would have been good to wait for Microsoft Quarterly results.
It's Not Edge's fault if there are glaring similarities between them all, their just reporting the news.
So that's Nintendo Sony and Microsoft that have all taken significant hits to sales. Doesn't really suprise me to be honest..
I guess some people will obviously see what they want to see, from these results and this article. I can already ready feel a "More Sales=Better Hardware" arguement brewing.
But what's this I see... Kim's already got his in early....
You don't see Nintendo firiing people or laying anyone off, do ya.
It really is a shame that Microsoft is closing down software studios who make great games such as Flight Simulator and Halo Wars.
Microsoft made over $4 billion in PROFIT in just one QUARTER...Why would they even consider firing people...Just to feel cool and give in to the peer pressure of other companies who are doing it??
If I was a competitor of Microsoft, I would go and hire up all the members of the team who created that awesome Flight Simulator game series, give them new jobs, and put them to work on a new Flight Simulation game, but with a different name. History has PROVEN that the Flight Simulator games produced by that group of people will make a profit.
Nintendo should simply turn the DS money printing machine and they should be alright.
Nintendo is in trouble? Wow, that really means that world economy has blown away. I'm starting to fear for my job...
Depends on what you consider "trouble." Personally, I wouldn't call slightly fewer billions of yen trouble, per say. They're still making a ludicrous amount of profit, just less ludicrous. I would consider posting a loss more of an indicator of being in trouble.
I have to agree with you there. Things may be slowing down for the big three. But they are by no means in financial dire straits yet.
dang.. if Nintendo are feeling the pinch then we're all in trouble
I second that.