Network now...NEWS
PS3 "Decreased Demand" Slams Sony
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.
Contact Us / About Us / Advertise With Us / BeltwayBlips / TechBlips / MassiveBlips / GamerBlips / FAQ
Subscribe To Edge Magazine / Corrections / Terms & Conditions / Privacy Policy
Copyright 2006 - 2009 Future Publishing Limited, Beauford Court 30 Monmouth Street Bath, UK BA1 2BW
England and Wales company registration number 2008885
Subscribe To Edge Magazine / Corrections / Terms & Conditions / Privacy Policy
Copyright 2006 - 2009 Future Publishing Limited, Beauford Court 30 Monmouth Street Bath, UK BA1 2BW
England and Wales company registration number 2008885
The accusations of bias have to stop. it's just a fact -- Sony isn't selling as well as its competitors. Get over it. I was a Sony fany last gen too, but it's time to come to terms with the FACTS. In a year when every major hardware players had increased sales, Sony was down! EVERYONE is reporting this, not just Edge. It isn't a bias -- it's just news.
Sorry Omega facts are facts 2008 hardware sales Microsoft 10.8 million Sony PS3 10.77 million Microsoft should be worried if a rival machine that costs double the price is able to match the 360s sales no biased here just facts this PS3 not selling argument is now Null and void by the way these are worldwide numbers. Oh and what a surpise Xbox doesnt have quite the lead they stated either 7million lead is more like it, I dont know about you but a million difference is alot to me.
@rydamgw - yes, facts are facts but you just stated opinion. According to Sony's and MS' own year end statements the 360 outsold PS3 by just over a million units globally last year. Sure, it doesn't sound too bad when you look at just last year, but the problem for Sony is that this further increased the previously existing 7 million unit gap. Suddenly, an 8 million install base gap globally starts making a difference when you're trying to secure increasing hard to get financing and justifying development for the only system with declining sales over the critical Holiday Season, the smallest install base and the worst software attach rate (that last one being most critical). I'll trust the financial statements of these publically owned companies over N4G or Gamezine.
Ryda,
Those are worldwide numbers and hopefully everyone knows that. The good news is if those numbers are accurate and I'll assume they are, is that both consoles are doing fine. The bad news is, if Sony doesn't turn those numbers around and start to really outsell the 360, they'll never make up those 7 million (or so) consoles. They need to outsell the 360 worldwide by more than 2 million annually or else they will not catch the 360 when the next generation proper starts. But I do think you point out something we all can recognize is that worldwide the PS3/360 are neck and neck. Unfortunately for Sony, they won't make up their deficit being just neck and neck with MS, and I'm sure they don't feel being outsold by the 360 by only 30k worldwide for 2008 is any kind of victory.
Thats not really my point though Nick my point is that these last few months all you here is Sonys doomed, sales need to pick up, the ship is sinking well my question is if the overall sales for 360 and PS3 are about the same then what the hell are all these ppl talking about and if Sonys "going under" then why isnt the same being said for the Xbox who sold the same number of units throughout the year and again on another note the PS3 is DOUBLE the price that right there is AMAZING in itself .
I hear ya. I think it's because people put so much emphasize on the US market (where the PS3 is being outsold 2:1 by the 360) that it appears as though Sony is doing so poorly. But since launch of both systems, the 360 and PS3 both average about 9 million consoles annually worldwide. The 360 just does a lot better in the US market. The PS3 does better in the other markets, but not by a lot, and not nearly enough to make up ground in the US market.
The PS3 isn't really double the price. You can argue that they are the same price, too (elite vs. 80gig PS3). You can even argue the PS3 is more than double the price if you're comparing the arcade unit to the 160gig PS3.
If you question US numbers overall US numbers are readily available on the internet if you want to look it up (if you're questioning my 360 over Sony 2:1 claim in US).
edit: C'mon Ryda, if you're implying MS is in trouble ("I don't think it's Sony who's in trouble" to paraphrase) I'd have to disagree. They've managed to countinue to outsell the PS3 and it's been out a year longer. Sales should be slowing down for the 360 and PS3 sales should have hit their stride already.
Source for your figures?
I told you gamezine and N4G and apparently they got it from both company reports if you look around and do some simple math youd see there fairly accurate, I honestly havent found any other sites that compare the 2 for overall sales but like I said its simple math. If you could prove me wrong with your own sites that say different feel free to do so but even if the calculations are off its not by much definitely less than 500,000 units the point is double the pricepoint same overall yearly sales some ones in trouble and I dont think its Sony.
Wow you guys are on the ball this morning good job : )
I'll have links please, to back up your claims. Otherwise, they are meaningless. Every website, including non-gaming ones, are reporting Sony are making losses. Can you not accept that?
One of the issues here is that most people are comparing this generation of systems to past generations. I don't believe these comparisons will hold up in the long run. Ultimately, this generation is so far removed from anything that we've seen before, it's difficult for ANYONE at Sony, MS or Nintendo to know exactly what to expect. The services we get, the distribution channels we use, the cost of game design, the popularity of retro gaming, a tanking world economy...all of these are coming into play in a different way we've never seen before.
I think you have to look at what Nintendo's done this generation - they essentially proved you do not need the most cutting-edge tech in order to sell systems. no doubt, this will affect how Sony and MS plan their next consoles. I can't see those two companies making extremely expensive machines anymore...at least not in the next generation. My guess is...the next systems will have marginal increases in graphics and processing power - with more focus shifted to AI and services.
This could actually help Sony in the long run in a few years, as they will have a very powerful system for a relatively small amount of money (relative if MS puts out a new pricier system). If the performance enhancement is only marginal, then people will probably stick with the Playstation 3...but since MS won't want to pound on their consumer's wallet, then they don't want to make the new system too costly either. so it's going to be a balancing act of sorts that we've never really seen.
Also, the services that these systems will be offering is going to be a huge deal. MS proved this with the Netflix deal. This was a deal-breaker for a lot of people I know. thousands of movies and TV shows instantly on my TV? Goodbye expensive cable movie packages. This is just the tip of iceberg i'm sure. MS, Sony and Nintendo are doing things and lining up services I can't even imagine right now. The advantage here I must say has to go to MS. They've been far and away at least one step ahead on services through their game systems. Sony's catching up in areas, but I worry about Stringer vs. Sony Japan management.
Ultimately, I don't think any fanboy has anything to worry about. All your systems and brands will be there for the next generation...but all the eggs will be in the next generation. That's when you're going to see these companies excel or fail.
Yeah Nice Post Dave.. I think you pretty much nailed it :D
Nice post Dave_Decades
Thanks! It's my first on here. Now I see the formatting I have to do next time....and WTF. I misspelled excel - should be accel.
"10.4 billion yen ($114 million), down from 200 billion yen a year ago."
People, that is an insane drop, there is no other way to cut it or spin it.
VGCHARTZ
Is the WORST and LEAST ACCURATE website for "sales."
The reason for this is because vgchartz using their own "proprietary" formula to determine sales. Here is the BIG problem with the "proprietary" sales formula used by vgchartz:
VGCHARTZ themselsves says that their proprietary sales formulas includes a factor known as "Information from the Manufacturer."
This is a fundamental problem that is HUGE in scope, especially when you consider that Sony (the company KNOWN for TELLING "information" filled with LIES) is one of the "manufacturers."
The bottom line is, Nintendo and Microsoft are "Manufacturers" who supply information to the public (including VGCHARTZ) on equal ground. Both of them base their "sales" figures on how many units have been "shipped" to retailers/wholesalers.
Sony used to do the same...but NOT anymore!
In 2007 Sony literally changed their corporate definition of what the word "sale," meant. Sony did this in order to avoid telling shareholders that the PS3 was "selling" poorly. Sony's definition of "sold" is based on the number of units that have been "Produced." This means even if a PS3 has not been purchased/shipped to a wholesaler/retailer, the unit will be consider "sold," the instant it comes off the assembly line and enters Sony's "Inventory" where it is collecting dust as an "unsold" and "unshipped" item.
A perfect example of this is when PS3 launched and Sony claimed they would "sell" 6 million PS3 systems by spring of 2007. In reality, only 1.4 Million PS3 systems had been "purchased" by consumers. Sony had only been able to "produce" 5.5 Million systems, yet they continuously said they had "sold" 5.5 Million systems. You can see proof of this here during an interview: http://www.youtube.com/watch?v=JFIDsTsWJHw
As a result of this type of polluted "manufacturer information" being used as a factor in what VGChartz uses to analyze sales, VGChartz cannot be trusted.
The only reliable sales source is NPD.
Oh please!!! Does the Anti Sony Rhetoric have to continue ?
Microsoft, Sony and Nintendo are all guilty of hyperbolic claims.. We know this.. obviously any company wants to paint it's product in the best light. That goes without saying.
What bearing does news of project sales for 2007 have on Sony's decline in demand for 2008?
SSump29 was just citing other information that he thought might be of interest to us.
Isn't funny how Kim's posts appear after four o'clock here in the UK.. I can only speculate what that means, but is anyone else getting that vibe?
Kim: Please tone down the Microsoft fanboyism that we see in all your posts. We're all entitled to an opinion, but your comments rarely lead to intelligent discussion.
Actually according to many sites Sonys gaming division actually made a profit this holiday season so I say good for Sony, This site is the only one saying the opposite. news.vgchartz.com
Well using vgchartz is exactly the best news site. And this isn't the only web-site reporting this. look here.
http://www.cnbc.com/id/28901492.
Yeah I real web-site that doesn't make up stuff since you seem to believe that is what is happening here. Quit being in denial, Sony is hurting right now.
Yeah thanks for that buddy good way to make yourself look stupid I was talking about the gaming division they had a 4 million profit, Sony as a whole lost money but the gaming division this holiday made money.
Point is who cares what division made a proit when the company as a whole is losing. Do you think that just because one division does good it means that division will not be affected when the company as a whole is losing? Yeah ok, if you believe that then GM has some golden stock for you hurry up and buy.
Looking at the financial reports, the game division made 0.4 billion yen operating income which is about 4.5 million for 3rd quarter. The Electronics and Financial sector of Sony are dragging the company down as they are reporting large losses not to mention the currency rate.
I bet that stings. I wonder how that will affect Sony in the longs run?
Lets hope that they can bolster the games unit somehow. Just shows how serious problems are with the global financial system, who would have thought that Sony would be hit so hard.
I wonder who else will be posting loses this quarter and how the Games industry as a whole will be affected as a whole of the coming years.
Big loses are certainly no good for long term games development, so maybe we'll that sector being cut back on.
I'm starting to question the conventional wisdom calling for a PS3 price cut in April. Considering nearly more consoles sell in Nov-Dec. than the rest of the year combined, wouldn't it make more sense for Sony to wait until around September to drop the price? This would give them a little more time to realize cost savings on components and generate momentum heading into the critical Holiday Season. It would also give MS less time to respond in kind before the Holiday Season, thus negating most of the benefit of a PS3 price cut.
@4thVariety - I'm not sure about the UK, but if it costs Sony $450 to make the PS3 they are losing $50 on each sale in NA, which accounts for nearly half their sales, making it really difficult to justify a further retail price drop right now. The software sales just aren't there to offset those losses.
@4thVariety - I'm not sure about the UK, but if it costs Sony $450 to make the PS3 they are losing $50 on each sale in NA, which accounts for nearly half their sales, making it really difficult to justify a further retail price drop right now. The software sales just aren't there to offset those losses............................Sony are losing more than that on each console, $450 was the estimated component cost that was claimed a couple of weeks ago .It did not include ANY other overhead eg manufacture , packaging , profit margin for retaile ? just thought you should know.
I'm guessing 4thVariety isn't in the UK, as we don't use Euros, still the £ here. 400Euros is a lot of cash though, as the value of the Euro has shot up recently.
They are nowhere near that expensive over here!
Just working it out roughly at the current exchange rate... Now I know this is not an exact science, but gives a rough idea.
From UK website
Killzone 2 pack (when it's released) - 80gb, Dualshock - £289.99 inc VAT & delivery
Thats $411.79 or 314.05 Euros.
So looks like UK is roughly the same as US, about $40 loss per console.
Wherever 4th Variety is, if they are 400 euros.
Thats £368 or $528!!
So they are MAKING nearly $80 per machine there!
Obviously this doesn't take into account other costs as mentioned, retailers, distribution costs etc, the fact that includes a game as well, but it's strange and interesting, it shows how much the massive changes in the exchange rate recently have affected pricing.
Actually they'd be loosing a lot more than $50 since on top of production costs there's shipping costs, the wholesalers have to take a slice then the retailers have to take their slice. I agree with what you said, its kind of hard to see (if that production cost figure is anything like accurate) how Sony can make a price cut without seriously hurting themselves, at least until they can drop their production costs further.
IF they dropped the price in or before April that would allow them to clear out the inventory of expensive to produce hardware and they can more easily bring cheaper to produce hardware out to the market. If they wait too long to introduce a price cut, they risk demand leveling off and possibly dropping by the holiday season and that could negatively effect holiday sales regardless of the drop in price.
well it doesnt bother me what the price it is, i have one lol. the truth is as long as the ps3 sells a fair amount as it does now then fine by me.
the only time my opinion will be changed is when the sales are so bad they are detrimental to the games that are made for it. 2009 looks alright with all the games coming out.... so happy days for now i guess.
Same here, i couldn't careless how many PS3's are sold. Gamers seem to think that the system has to sell 1m a month to be successful, which isn't the case.
As long as the system keeps hosting the type of games i want to play, then that's all that matters to me personally. The 2009 line-up looks excellent. Honestly though, i couldn't ask more from my PS3, Wii and DS as they're all providing top class entertainment.
You should care about how many systems are sold. While I agree that a system's success should not be determined solely by the number of units pushed each month, but that is really what matters. If publishers see demand dropping for a system with arguably the lowest number of gamers, they will be less likely to release the games you want to play for it.
You know why most don't care is because they are multi-console owners. I don't care if developers don't push out as much on the PS3 as long as I can still get the games on the 360 and vice versa. Other then that people who own more then just said console aren't really certained about how many units a company is selling each month unless they are a shareholder.
I acknowledge your point, but i didn't care about sales throughout the Nes, Snes, MD, PS1/2 and DC era and most importantly, i enjoyed the games on all those systems. The DC only sold a total of 10.6m (ww), but for me it produced some of the best games ever created.
Caring about console sales is like a vulture hanging over ones head. Just play the games, you'll be happier for it.
The cost of making games during the NES, Super NES, PS1/2, etc. Are way different than what it cost to make them now, practically some developers live or die by the each game they release, if its not successful the developers is either out of business or has massive layoffs.
You mention the Dreamcast produced some of the best games ever created, I agree, but how about the games you didn't get to play because it went belly up because of poor sales? You didn't get to many games that were canned. Same happened to the Saturn were people left the console because of poor sales which meant fewer games, it didn't matter how amazing the first games on the system were just because it didn't sold well developers went elsewhere, I bet you didn't played Panzer Dragoon Saga one of the best RPGs ever created and that happened cause it came out when the Saturn was out of business all because of poor sales.
You enjoy the games coming out in 2008 for the PS3? If sales continue like that you better enjoy the hell out of those games cause I can guarantee you that there wont be sequels (at least not in the PS3) or more high profile games in the future.
German,
I agree that if the PS3 software decreases in sales that publishers will just start releasing 360 versions only if the cost of developing the PS3 version is more than the money they're making on them. I don't see the PS3 at that point now. I think multi-system releases do sell better on the 360, but I don't think they're so bad on the PS3 yet that publishers will can major releases. Maybe smaller more niche games or non-triple A games. But when it comes to the major 3rd party releases I think the PS3 versions would have to do worse than they're doing now before publishers will consider stopping PS3 game development. The GameCube suffered that fait when the PS2 and Xbox 1 versions were stomping GameCube versions of multi-platform releases, but the GameCube versions were selling really, really poorly.
NickgamertagO1:
Good point, I agree with you on the 3rd party multiplatform releases, I too don't think the PS3 is at a Gamecube level, but I was mostly referring to games that are geared exclusively to a console, like for example Gears of War 2 or Metal Gears Solid 4, if the Xbox 360 wasn't selling well maybe Epic would have considered to make the sequel to Gears on another platform. In the case of Metal Gear had the game taken another year to come out instead of 2008 Konami would have probably considered to go the same way SquareEnix did and release the Metal Gear on both consoles or worse, only on the Xbox 360.
My main point is that developing companies like Media Molecule, 2D Boy and others independent developers will be less inclined to work on original games with the PS3 in mind if the poor sales continue.
Got it, that makes perfect sense. I almost feel bad when a game like LBP gets such high praise and seems to sell so fewer copies than it should.
I definitely see that as a trend that seems to have presented itself already with multiple titles either making the shift to multi-release from PS3 exclusivity or going 360 exclusive altogether. That has to be frustrating for PS3 owners (as well as multiplatform games having 360 exclusive DLC) losing titles or not having them released on the system at all (almost all RTS games, L4D, etc.).
True, but where is the successor of the Dreamcast? It doesn't exist. Where are the people who developed those great games for the Dreamcast? They are developing games for other systems.
So I guess if you do not care what system the games you like playing are on, that is fine. But if a system has low sales, the probability of you having to buy a new system to continue enjoying those games increases.
One could argue that it does exist but just not with a Sega stamp on it.. It's was called the Microsoft Xbox (1st Generation, Spacebrick). After Sega pulled out of the hardware race, Microsoft stepped in, having already collaborated with Sega for use of Window CE, I bet it was easy from then to decide to enter the console race, didn't MS even secure some of Sega's own chief executives to head up their gaming division?
To be fair the Dreamcast still enjoyed quite successful life cycle just not in the PAL territories. It was huge in Japan and the list of games speaks for itself.
The Dreamcast has still has games released for it up until quite recently, which owes a lot to the popularity of the Naomi arcade boards. Also If you look down the list you will also see a few title that were ported for other systems primarily PS2. I wouldn't say that Dreamcast was big success in its own right, but it was a huge influence on the generations that followed it.
That is true, but what if Microsoft had NOT stepped up and decided to go into the console business? That means one less console to entice developers to create games for us. One less platform to encourage people to think up new ideas for games. Imagine if the Dreamcast HAD survived and we had 4 viable consoles on the market right now? Who knows what new and different games we COULD have been playing right now, had the Dreamcast stuck around and have been lost as a result. Yes, as previously mentionned, there were plenty of good games to play on other consoles since, but there could have been even more for all we know, maybe even better? If one of the console makers drops out because of these tough economic conditions (not likely, but who knows how long long it'll last and if it'll get worse or not) how many companies out there are big enough and have the resources to jump in and take that spot?
The fact is, healthy console sales and the resulting healthy corporate profits ensures a healthy market, including software and software development. You need only look through the archives of recent articles on this site to see the cornucopia of studios and developers closing. Having fewer consoles sold doesn't exactly go about helping that situation any. They are pretty much related to each other. So that is why console sales, and corporate earnings, SHOULD be important to gamers. If these companies don't sell consoles and don't make money, and go out of business, who's left to make the games we want to play?
Dreamcast did survive maybe not in the western market, the Japanese market stayed relatively strong in light of Sega making their withdrawal from the hardware market. Even still we can't turn back time and speculate on what might have been!
What I don't understand is how playstation console sales are deemed unfavourable the generation. The PS3 has some stiff competition this generation. Although having said that, I'd say that 16million units worldwide is a pretty good base in year three to continue production and games development, even in light of the recession. The economic downturn is worrying for consumers, don't get me wrong. But the financial situation will most likely cost all hardware players not just Sony.
Let's say for sack of argument, that Sony went the way of Sega and pulled the plug on Playstation. Of course all of us who invested time and money in the hardware are going to be pretty disappointed. But it's certainly not going to stop us playing the games you have and getting enjoyment from them. Microsoft and Nintendo would take up the slack and the Sony refugees would find another console. If this happened we'll all have to make adjustments, but it's won't be the end of the world.
I think it would be the end of the world for a lot of people who have been loyal to the Playstation brand for over a decade, and the franchises they love that have been with the Playstation. Sure, some of them might make the jump to another console, but maybe not all of them....maybe not the ones YOU personally like.
I don't understand what you are trying to say? It was a hypothetical scenario. I'm not sure what you mean by "the ones YOU personally like" if I have not made it clear enough already.. I don't really have a preference.. it's the games that are the important part.. without games the console is but a paperweight.
What you have cited there are exactly the reason why the Playstation brand won't fold. They might be in a sticky situation now, as are the rest the hardware manufacturers. But Sony aren't going anywhere regardless of speculation to the contrary.
I didn't mean you personally, meaning you.......bad word choice i guess. I meant that in a game or franchise that is liked by a number of people (maybe not you personally) that might be lost due to teh folding of a console.. Not expressing myself very well today. Sorry about that.
I agree that Sony won't be going anywhere. It was all supposed to be to show the link between hardware sales/health and software developement/health, but seems to have gone away from that point.
No worries. :D
Yeah I'll second that,
Dreamcast is probably the best and most underated consoles of that generation. Great that Sega kept the Naomi boards going or we'd never have seen great games like Tigger Heart Excellica :D
Yeah but IMHO it's kind of hard to say the Dreamcast belonged to any generation. It was a bit of an anomoly. It sort of established it's own lifeline..or generation. I say this because it wasn't truly competing with anything at the time. Obviously it was WAY ahead of the N64, but it also wasn't engineered strong enough to compete with the PS2 coming down the line a year later. Also, the games seemed to be focused on arcade ports as opposed to deep 1-player experiences that were becoming more the norm. Hence the semi-death of split-screen multiplayer fun. Thanks god that's on it's way back.
But there were some fine games for it. My favs were Skies of Arcadia, Soul Calibur, the 2K sports series, Code Veronica (FYI - the cinematics director of CV has a Japanese superhero film coming out called "K-20: The Fiend with 20 Faces" or something like that...supposed to be awesome) Ikaruga....I'm sure I'm forgetting some.
[WAY WAY OFF TOPIC...!]
Dreamcast, what a machine!! Where as other consoles at the time were knock offs. The Dreamcast was the real deal, like the SNK machines before it; it really brought the arcade to your home... It was about a near as you get to blowing all those hard earned fifty peas in the arcade cabinets.
So many quality games (too many to mention), sadly many of the true greats never made the long journey or the translation from the land of the rising sun. But they're all out there if you still have your system ;)
It's funny how at the time Dreamcast was slated as one of the biggest gaming flops in the UK, but has now attained a kind of cult following. How wrong we were, a lot can happen in 10 years and I guess lessons could be learnt from the Dreamcast, certainly to never speculate the success or perceived success of any generation, if not over till the fat lady sings or the Laser unit gives out.