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NEWS

Sony Shares Lowest in 16 Years

Rob Crossley's picture

By Rob Crossley

October 29, 2008

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Following Sony’s alarming 57 percent cut of its own annual profit forecast for the fiscal year ending March 2009, the company has reported a 72 percent fall in profits for the second quarter.

Sony’s net income has fallen over ¥50b from the last quarter, dropping to ¥20.8b. The company’s share price, which has been tumbling for weeks, fell to a 16-year low ahead of the financial report.

The news, as gloomy as it is, will not come as a surprise for electronic entertainment giant. The rising Yen continues to cut into Japanese exporting businesses, and the entire nation is feeling the pang of an increasingly disinterested American market.

Sony joins a growing number of Asian export companies who have reported a decline in profits. Companies like Canon, Honda and Samsung have all slashed their annual earnings projections.

Sony’s current financial troubles, however, do not seem to be so intrinsically connected to the PS3’s sales performance. Sony said it sold 2.4 million PS3 units in the quarter, which would make that an 86 percent rise on the same quarter last year.

rydamgw's picture
On October 29th rydamgw said:

Im not really to worried about Sony, I beleive there going to bounce back hard ,Theyve got alot of great ps3 exclusives coming out actually today im buying LBP and ive been playing the R2 beta its by far the best online experience ive ever had ,I mean halo was great online but this is amazing 60 player battles w not
an ounce of lag. Ill admit sony is kinda in the whole but they definitely have the tools to dig themselves out and be back on top just give them a lil bit more time.

Limanima's picture
On October 29th Limanima said:

I think that those are global results and not just for the gaming division.
Not to mention that there is a global economic crysis that is affecting stock markets all over the world with share prices dropping like rocks for a large number of companies.

jacobpbarker's picture
On October 29th jacobpbarker said:

LittleBigPlanet can't come at a better time for Sony's accountant. Christmas AND one of the best games ever.

NickgamertagO1's picture
On October 29th NickgamertagO1 said:

Is Sony publishing LBP? I'm guessing LBP will push 2-3 million copies total with 1-1.5 million selling pretty quick but won't impact console sales too much as I think the PS3 will sell out this holiday regardless of LBP's presence.

Ozzman_79's picture
On October 29th Ozzman_79 said:

Would be interested to see if Nintendo is suffering the same issues, being in a similar market and also being from Japan, you would think they'd be in the same boat, the S.S. Stock-sinker.

NickgamertagO1's picture
On October 29th NickgamertagO1 said:

An 86% increase over terrible still isn't great. And Sony may have sold 2.4 million consoles over a 3 month span, but aren't they LOSING money on every PS3 they sell? So a high number of sold consoles isn't what they need, it’s a high number so software units sold that is what's going to help them (and that's what they're lacking the most). And the games division is probably the smallest of their profits no? And this isn't the first time Sony has been in the dumps. Maybe overpricing inferior electronics isn't the best business practice (I'm referring to non-game related products). Sony has been riding their name for too long. I think people are starting to catch on finally. I stopped buying Sony products about 7 years ago due to overpricing.

Limanima's picture
On October 29th Limanima said:

I'm not that sure that Sony is losing money for every console sold.
I think that is thing of the past. Probably they aren't winning much, but I doubt that they are losing.

Ozzman_79's picture
On October 29th Ozzman_79 said:

According to this article, the games division overall is still losing money, just a lot less then before. Since games and accessories are supposed to turn solid profit from day 1, if the division overall is still losing money overall, it would lead me to believe that they are still losing money on PS3 consoles. If they were making profit off of them, as well as games and accessories, wouldn't the division be profitable overall?

http://www.gamasutra.com/php-bin/news_index.php?story=20865

NickgamertagO1's picture
On October 29th NickgamertagO1 said:

Mathematically? Yes, that's correct. Accessories and software traditionally don't lose money, so if they're in the hole still; it has to be due to hardware. Typically hardware is a loss for the first few years or so of the console's lifecycle. PS3 isn't even at its 2 year mark yet. And I think the PS3 was sold at more of a loss than consoles usually are so they may have a longer time before their console isn't being sold at a loss.