[Carl B]

Sony reported their 1st quarter results today. For purposes of normalizing currency, use 106/yen to the dollar.

Net profit was down roughly 50% vs Q1 '07 to 34.7 billion yen for the quarter, stemming mainly from the large decrease in profitability over at affiliate Sony-Ericsson. Bravia sales are going well (seemingly), but Handycam and Cyber-Shot cameras are facing greater competition.

Gaming was profitable with 5.4 billion yen in operating income, vs a 29.2 billion yen loss in Q1 last year.

Although hardware sales increased, overall software sales decreased due to PS2.* Here's some hardware sales figures:

PS2 sold 1.51 million units, vs 2.66 in Q1 07.

PSP sold 3.72 million units, vs 2.13 in Q1 07.

PS3 sold 1.56 million units, vs 0.70 in Q1 07.

* Although the statement says software sales decreased overall, the numbers given seem to show an increase, so who knows where the error is.

Here are software sales:

PS2 sold 19.3 million units, vs 31.1 in Q1 07.

PSP sold 11.8 million units, vs 9.8 in Q1 07.

PS3 sold 22.8 million units, vs 4.7 in Q1 07.


For the fiscal year, Sony has revised full year group profit estimates downwards from 290 billion yen to 240 billion yen.


http://www.sony.net/SonyInfo/IR/fina.../08q1_sony.pdf

[Arwin]

Gaming was profitable with 5.4 billion yen in operating income, vs a 29.2 billion yen loss in Q1 last year.

That's good news for Sony. Looks like PS3 will be contributing positively from this year onwards.

[Carl B]

Originally Posted by Arwin

That's good news for Sony. Looks like PS3 will be contributing positively from this year onwards.

Well, gaming at least... I don't know about PS3 specifically just yet.

[Shifty Geezer]

The most noteworthy point is the software sales increase. After a very slow start PS3 is finally moving software which must be a welcome relief for developers!

[Arwin]

Originally Posted by Carl B

Well, gaming at least... I don't know about PS3 specifically just yet.

Obviously. Hardware is never the big money maker in console land. *glances towards Nintendo* Or at least, not the biggest.

[Carl B]

I just meant that PS3 is probably still a money-losing operation overall; I think PS2 and PSP are still the profit drivers, it's just PS3 loses less (and that's inclusive of software). I'm going to listen to their conference call in a little; hopefully something will be clarified in terms of the software units shipped, because either the numbers given or the statement that they are lower overall... one of those is off.

[eastmen]

we also haven't hit the holidays yet. Moving a few million units over a quarter in each territory could be alot diffrent in terms of finanices than moving 1.6m, that is if they are still taking large losses on hardware.

But its a very good sign for the ps3 over all

[Carl B]

Originally Posted by eastmen

we also haven't hit the holidays yet. Moving a few million units over a quarter in each territory could be alot diffrent in terms of finanices than moving 1.6m, that is if they are still taking large losses on hardware.

Selling a lot of units is definitely better than not... to say nothing of the software sales that accompany. Remember, the charges are booked on making the things, not on selling them. To that end also, it's worth noting that on-hand hardware inventory is much lower at the end of Q108 than it was Q107, so it seems Sony has found a comfortable groove in terms of production/shipment.

[eastmen]

yes but sony stil has to make those systems and ship them out when the holiday comes is what i'm saying. if they need to produce 5m consoles and loose say 10 bucks on each that is 50m losses . on 1.6m that is only 16m . So they would have to make another 34m by selling games or other things to make up that money.

So if they are still loosing money on each system making more of htem is going to cost them more and will take more to recoup.

So its interesting to see what it will look like later in the year .

[Nesh]

Originally Posted by eastmen

yes but sony stil has to make those systems and ship them out when the holiday comes is what i'm saying. if they need to produce 5m consoles and loose say 10 bucks on each that is 50m losses . on 1.6m that is only 16m . So they would have to make another 34m by selling games or other things to make up that money.

So if they are still loosing money on each system making more of htem is going to cost them more and will take more to recoup.

So its interesting to see what it will look like later in the year .

Ever heard of long term targets?

[Carl B]

Lose, not loose. I will flip out on that, believe me!

Yes though, you're right that production should ramp ahead of the holidays, and that will be a greater loss-generator on the hardware front, assuming a commensurate rise in component sourcing. I think the holidays though are exactly the kind of time when increased hardware sales have a chance to be rewarded with increased software sales. Anyway... two quarters away before we know the answer for this year, but point taken.

[liolio]

For this holydays could also the ps2 sales (soft & hard) collpase for good?
And thus cutting some revenues from Sony?

[Carl B]

Originally Posted by liolio

For this holydays could also the ps2 sales (soft & hard) collpase for good?
And thus cutting some revenues from Sony?

Revenues probably will be readily offset by PS3, but profits, potentially. I don't think PS2 will 'collapse' though, just because Sony is increasingly pushing it in developing markets. Also, they've already gone on record as indicating they'll drop the price to $99 vs $129 before it sees twilight, so I think there's a good couple of years left for the system.

[Shifty Geezer]

Not if they are successful in establishing PS2 in emergent markets. There was a reason for another PS2 revision, which wouldn't make sense if the platform was on the out.

[Rangers]

Q end 6/30/08 cumulative WW shipments:

PS3=14.41 m
360=20.3 m

Q ended 6/30/08 quarterly WW shipments

PS3=1.56 m
360= 1.3 m

I pay close attention to these because they're the closest thing we have to reliable WW sales. Also, all companies now use "sold to retail" as shipped, so they're much closer to real sales than they used to be. There are still a lot of vagaries involved with ship vs sold however, and of course a good deal of lag time.

Previous Q PS3 gained nearly 1m units WW on 360 (2.24 vs 1.3) so I'm not sure why the relative decline. Either PS3 is performing weaker in Europe or PS3 had excess stock from prior.

[betan]

Originally Posted by Rangers

Q end 6/30/08 cumulative WW shipments:

PS3=14.41 m
360=20.3 m

Q ended 6/30/08 quarterly WW shipments

PS3=1.56 m
360= 1.3 m

Any software sales for 360?

[eastmen]

Originally Posted by Carl B

Lose, not loose. I will flip out on that, believe me!

Yes though, you're right that production should ramp ahead of the holidays, and that will be a greater loss-generator on the hardware front, assuming a commensurate rise in component sourcing. I think the holidays though are exactly the kind of time when increased hardware sales have a chance to be rewarded with increased software sales. Anyway... two quarters away before we know the answer for this year, but point taken.

yes the software should increase even more which is why its interesting ot me if they make or loose (:twisted) money this holiday season. It will show us how expensive the ps3 really is .

[deepbrown]

Originally Posted by Rangers

Q end 6/30/08 cumulative WW shipments:

PS3=14.41 m
360=20.3 m

Q ended 6/30/08 quarterly WW shipments

PS3=1.56 m
360= 1.3 m

I pay close attention to these because they're the closest thing we have to reliable WW sales. Also, all companies now use "sold to retail" as shipped, so they're much closer to real sales than they used to be. There are still a lot of vagaries involved with ship vs sold however, and of course a good deal of lag time.

Previous Q PS3 gained nearly 1m units WW on 360 (2.24 vs 1.3) so I'm not sure why the relative decline. Either PS3 is performing weaker in Europe or PS3 had excess stock from prior.

uh.where are your 360 numbers from? I don't believe both companies are counting the same. I was under the impression 360 numbers were under 1m.

[Nesh]

Originally Posted by Rangers

Previous Q PS3 gained nearly 1m units WW on 360 (2.24 vs 1.3) so I'm not sure why the relative decline. Either PS3 is performing weaker in Europe or PS3 had excess stock from prior.

I thinks thats what they always meant with shipped .

[Rangers]

http://www.microsoft.com/msft/earnin...rel_q4_08.mspx

[Rangers]

Originally Posted by Nesh

I thinks thats what they always meant with shipped .

Nah, Sony used to count rolling off the assembly line as shipped. This caused some wild inconsistencies in the past.

These numbers are still not directly connected to WW sales..for example there was quarters last year where 360 only shipped 500-700K despite sales being a lot better than that. Due to them overstocking to hit 10 m the prior year.

Overall that stuff equalizes out in the long run though. And the reason I like these numbers so much is they really cant be fudged, and account for the whole world, including places you could never get reliable sales figures for.

[Archgamer]

Originally Posted by Rangers

Previous Q PS3 gained nearly 1m units WW on 360 (2.24 vs 1.3) so I'm not sure why the relative decline. Either PS3 is performing weaker in Europe or PS3 had excess stock from prior.

It probably has mostly to do with the fact that Sony is clearly out the stock of the 40 gig PS3 to bring the entry of the new 80 gig modal coming out the end of next month.

[Carl B]

Originally Posted by Archgamer

It probably has mostly to do with the fact that Sony is clearly out the stock of the 40 gig PS3 to bring the entry of the new 80 gig modal coming out the end of next month.

I hardly think they were out of stock at the end of June - afterall, they had plenty of consoles to sell in July, right? PS3 sales were over twice what they were a year ago... I don't think we need to be fishing for any reasons why they weren't higher honestly.

[betan]

I don't remember hearing about any supply issues before July.
Another interesting question is why revenues of 3rd party publishers like EA and Ubisoft do not reflect 360/PS3 userbase properly.
from EA's Q1 report:

                         Q1      Q2      Q3      Q4      Q1     YOY %
                        FY08     FY08    FY08    FY08    FY09  Change
                       ------- ------- ------- ------- ------- -------


PLATFORM NET REVENUE
 MIX

 PLAYSTATION 3              13      17     102     152     139    969%
 Xbox 360                   47     218     196     128      81     72%
 PlayStation 2              61      73     301     166      79     30%
 Wii                        29      59     139      75      57     97%
 Xbox                        3      12       3       1       -  (100%)
 Nintendo GameCube           1       3       1       -       -  (100%)
  Total Consoles           154     382     742     522     356    131%

 PC                         89      79     148     114      86    (3%)

http://investor.ea.com/phoenix.zhtml...cle&ID=1180823

[eastmen]

wonder what the release lists were like in q4 08 and q1 09 that the ps3 pulled ahead in terms of software sales for ea.

i wonder if this has to do with the weaker competition on the ps3 . But its good to see the ps3 numbers in crease so much