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Sony Forecasts $1.68b Loss
Sony expects to make an operating income loss of $1.68 billion for the fiscal year, marking the first annual loss for the company since 1995.
The fall is greater than previously expected, as many reports and analysts predicted Sony would forecast a loss of around $1.1 billion.
Sony’s game business, specifically, is expected to see its operating income decline by some $337m. Sony states that lower-than-expected sales are responsible for half of this loss, with the other half “due to the impact of the appreciation of the yen.” Revenue forecasts for both Sony electronics and Sony Pictures Entertainment have fallen as well.
The Yen stands at a 13-and-a-half-year high against the dollar, which has heavily restricted foreign earnings for a large number of Japanese businesses. Around 80% of Sony’s sales income comes from overseas.
Sony held the slowing global economy as responsible for a loss of ¥250 billion in operating profit, while the high Yen helped sink another ¥40 billion. Restructuring changes to the business will cost the company ¥30 billion.
For the fiscal year ended March 2008, Sony announced a profit of ¥369.4 billion.
Sony executives are expected to announce an emergency restructuring plan later today.
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Jb1: >
Ha... What a comment > you might want to look at this
http://www.gamesindustry.biz/articles/microsoft-confirms-5000-job-losses
Now... From the trend of your posts, and from the all previous posts u made it looks like you're pro SONY hater so....
Love your quote how you attempted to justify M$ price for their own HDD. Ha... 180 bucks for 120gb? Yeah Right... for 109 i can pick up a 500GB. So i dont know where you pulling that out of your rear... Anyhow, you should chill down with your ANTI SONY FUD BS.
However, you should realize that the whole world is affected by the economy, even M$, SONY, FORD, CHEVY.... and the list goes on. The PS3 is here to stay, you either can accept that or move on... Simple! @ 400 bones it still selling that is all you need to know.
If you read the article about the MS job cuts, you'd see that there net income (pure profit after expenses) this fiscal year was $4+ billion. The job cuts are pre-emptive measures in light of the economic climate, which you will see many profitable companies are or already have done.
Sony has a net loss of $1+ billion. The economic situation is far more problematic for Sony considering the loss and that their main business is in electronic consumer goods, where as the O/S licensing deals that catapulted MS to where it is today will be an income that's as rock solid as there can be.
Either way, at this point there is no threat to the PS or Xbox divisions. For each company there's more than games that's potentially at stake with their game console businesses.
Good point. Hey is your name pronounced as Pesich ( ic ).
Oadkle si?
P.S I totally agree with that anology and yes as a hardware company and yen being higher than a dollar, they are sure have more to worry about. IMO they need a price cut, and it better be 299 for the PS3 if they want to move more consoles, backed up by a a few great titles and it can get better.
If some of the members here read the Reuters article properly they'd realise Sony's gaming division has remained largely unscathed.
Talk about making mountains out of molehills.
http://www.reuters.com/article/ousiv/idUSTRE50J89M20090122?pageNumber=1&...
Looks like not many people wanted to get a second job in order to buy sony's rubbish console.
Some people are going way over the top here. Companies lose money, Microsoft has done for years, Apple were on their knee's before the success of the iPod, critics thought Nintendo were going the way of Sega before the success of the Wii/DS.
In other words, there's nothing much to read into here. Life will go on for Sony.
The irony in that was that the Gamecube was always profitable for Nintendo, even though it was in 3rd place. Nintendo didn't make as much money as they wanted to make, but they did turn a profit.
I think looking at the fact that the games division only lost a few hundred thousand for the year should be enough proof that the games division is not the cause of Sony's massive problems. They've had several battery recalls in the past year and their TV sales are now starting to get overtaken by Samsung and their cheap TVs/high profile marketing strategy. Toss in the fact that their MP3 players and Phones are no longer the talk of the town, and well... I think you can see how they managed to have over a billion dollars in losses.
I don't know what you read, but the article says 337 MILLION income decline for the games division, not 337k.
Not sure this is going to be enough. TV sales are almost as bad as auto sales right now (not just Sony, but every brand) and Sony's hardware and software numbers for PS3 in the last quarter were atrocious.
Gamasutra released the NPD top 20 yesterday and neither LBP or R2 showed up (both ended up around 600K for the entire year). These were the 2 high-profile, Sony published releases that are supposed to dominate the charts for them and they got outsold by MS' second tier exclusives (L4D - I mean "second tier" in terms of high profile, not quality). The console model is built around software making up for hardware losses and this is simply not happening for Sony.
This first quarter is going to be even more brutal. I doubt sony will be able to move more than 70K PS3's each of the next 3 months. KZ2 should provide a very short software blip because of the hard-core crowd, but won't move hardware and most likely won't have legs. Sony's in a very tight spot and will probably have to abandon entire divisions to survive - trimming is not going to do it.
NPD numbers are not everything. The U.S. market will neither make nor break Sony. They are earning licensing fees on every title sold, so the more the merrier, doesn't really matter who made the game. Published numbers in Germany suggest this week that Sony still amounts to roughly 41% of all console software sales, 51% are Nintendo software sales, the meager 9% rest is 360. While the PS3 on its own would only score 12.5% of sales, it shows that Sony is gaining ground on the 360 in Germany at least. In terms of sales, Microsoft stagnated in 2008. Sure, tehy sold 25% more units than last year, but that was the average growth of the entire market. With all the price cuts and aggressive messages, one would expect them to grow faster than the market does on average.
@4thVariety - actually NPD numbers are everything from a publishers perspective. The US accounts for 47% of global game sales (Germany does not even constitute 1%). You could make an argument concerning the UK which is now rivaling Japan, but Germany is as insignificant as Australia.
So true, and the one fact everyone is missing, SONY is not that far behind in Europe and other countries, in Japan PS3 overtook X360, the only place left is US. Then again why would it matter so much, as long there is great competition the consumers win. Great products, good prices, and lots of inovation.
I personally prefer the PS hardawre because that is where I can find the SONY games i grew up with. From Ratchet, to GT, to GOW and etc... So i think its all a matter of opinions. What we need to realize is that economy is hurting everyone so it should be no surprise that these companies are trying to save bucks.
Wait... Did you just discount the US and start citing German sales figures? How is Germany more of a statistical sample of world-wide sales while the US (one of the largest markets in the world) is not?
By citing just Germany instead of all of Europe is like me just citing New York rather than all the US.
So your argument still is valid because it quotes a portion of the market, while mine is invalid because it quotes a different portion of the market?
What I meant to convey was the fact that Sony is not acting on regional impulses, they are a global player. While MS is keen on emphasizing their local strengths, Sony has some local strengths of their own as well. For them it is not an issue of desperately trying to win a statistic. They are in the business of returning their investment and trying to secure funds for the next investment. In that regard, Microsoft has yet to really hurt them.
North America, the US in particular is the biggest market for video games. There is no disputing that. Potentially it could change in the future, but right now, this is the biggest market and that's as concrete as a fact as there ever can be.
The importance of the US as a consumer market in general, is even emphasized by statements by Sony in the article above, as they site the weak US dollar (compared to the Yen) as one of the major factors in Sony's financial woes.
Such arguments are shortsighted. It's like the "each PS3 sold costs Sony $50". Sony is selling more consoles in Europe than in the U.S: If the analysts are right, Sony makes $140 profit on each console sold in Europe, due to the strong Euro. If Sony releases a bundle in the U.S., then it's a big deal, what they don't tell you is that there is a bundle for every PS3 game Sony sells in Europe. Do you want the LBG bundle, the Killzone Bundle, the Singstar Abba bundle? They got new bundles every two weeks.
So even if the U.S. market is the largest, it is not a true indicator for where Sony is right now. Much of that has to do with the 360 not being real competition outside the U.S. really.
No, My argument is that you are discounting one of the largest game markets and replacing it with statistics from a considerably smaller market (I mean fractionally smaller).
I understand that Sony operates on a world wide basis, but until full world wide numbers are revealed, you have to base your arguments on the best statistical representation possible. Currently that is the US as they release consistent data every month.
Yep, that was weird! At least use the sales figures for the whole of Europe, otherwise what you're saying is largely meaningless. While Germany may have kept the ball rolling for David Hasselhoff's singing career i don't think they can save the day for Sony on their own.
The well is finally poisoned then. Microsoft threw money at the problem for seven years, but it took the financial crisis to finally stop Sony from making money. Microsoft might win the war against Sony not by outselling them, but by making the console market a business where Sony looses too much money and can't afford developing new systems. Microsoft might be bleeding too, but they got a lot more money to bleed before they are in Sony's position.
Sony can't blame the financial crisis for everything though. As far as console sales are regarded 2008 was a record year. This week, German sales numbers revealed the total sales were up 25% compared to last year. But the PS3 is not gaining ground at the speed the PS2 is loosing ground and sales. Nintendo is butchering them all in terms of software sales. 360 finished last place.