Sony financial report Q2 2008

Taken from Gaf:

Code: 
Game
(Billions of yen, millions of U.S. dollars)
Second quarter ended September 30

2007 2008 Change in yen 2008
Sales and operating revenue ¥243.4 ¥268.5 +10.3% $2,582
Operating income (loss) (96.7) (39.5) - (379)

Unless otherwise specified, all amounts are on a U.S. GAAP basis.

Sales increased 10.3% year-on-year (a 15% increase on a local currency basis) to ¥268.5 billion ($2,582
million).

Hardware: Overall hardware sales increased as a result of an increase in sales of PS3 and PSP. Sales of PlayStation®2 (“PS2”) decreased year-on-year.

Software: Despite an increase in PS3 and PSP software sales, overall software sales decreased as a result of a decrease in PS2 software sales.

An operating loss of ¥39.5 billion ($379 million) was reported, an improvement of ¥57.2 billion year-on-year.

The decrease in operating loss in the current quarter was primarily due to PS3 hardware cost reductions and increased sales of PS3 software, as well as strong sales of PSP hardware.

Worldwide hardware unit sales (increase/decrease year-on-year):
→ PS2: 2.50 million units (a decrease of 0.78 million units)
→ PSP: 3.18 million units (an increase of 0.60 million units)
→ PS3: 2.43 million units (an increase of 1.12 million units)

Worldwide software unit sales (increase/decrease year-on-year):
→ PS2: 23.1 million units (a decrease of 14.9 million units)
→ PSP: 11.8 million units (a decrease of 0.8 million units)
→ PS3: 21.1 million units (an increase of 10.7 million units)


Inventory, as of September 30, 2008, was ¥243.2 billion ($2,338 million), which represents a ¥4.6 billion
decrease compared with the level as of September 30, 2007. Inventory increased by ¥83.7 billion, or 52.5%,
compared with the level as of June 30, 2008, due to increased inventory of PS3 and PSP hardware for the
holiday sales season.

A $379 million loss for the quarter. Looks like they're still bleeding due to the PS3 even with the PS2 and PSP bringing in good money.
 
They lost 379 m in gaming.

PS3 shipped 2.43 milllion

LTD PS3=16.84m

360 for comparison: Last Q=2.2 m LTD=22.5 m
 
RobertR1 said:
A $379 million loss for the quarter. Looks like they're still bleeding due to the PS3 even with the PS2 and PSP bringing in good money.
Click to expand...

PS2 sales are down 23% (hardware) and 39% (software) year-on-year.

Given that, the operating loss improved from ~$927m.
 
catisfit said:
PS2 sales are down 23% (hardware) and 39% (software) year-on-year.

Given that, the operating loss improved from ~$927m.
Click to expand...

yeah, the point being that the PS2 sales being down, they can't cover as well for the PS3. As the PS2 sales drop, the PS3 losses are more exposed. Couple that with the yen value increasing, the PS3 doing poorly in Japan, in comparison to PS1/PS2, thus having to rely for export sales mainly, it leads to bigger losses.
 
As long they keep reducing the cost of manufacturing and roll out good games, they should be fine (65nm RSX and 45nm Cell). The losses have decreased by more than 50% (assuming $927). The new games and movie rental/sales will help too. I expect them to branch out to more business avenues (e.g., in-game ads and promotion, merchandizing of LBP, KZ2, Resistance; movie, books, comics, garments, ...).

Based on their target, PS3 unit sales is on-track anyway (actually over-delivered this quarter). If the business fundamentals are there, companies as large as Sony will forge along. They may need to downsize in some areas though.

Observing from the outside, there seems to be some wastage.
 
Rangers said:
Makes me wonder if there is a chance we only see a $50 cut on PS3 next fall, instead of $100.
Click to expand...

a one hundred dollar price reduction does sound rather aggressive. i suppose if software sales increase dramatically over the next two quarters the chance of a >$50 cut in Q1 2010 (i.e., November 2009) will be more likely.
 
Rangers said:
Makes me wonder if there is a chance we only see a $50 cut on PS3 next fall, instead of $100.
Click to expand...

You bet they will have a $299 SKU next fall.

Going through two consecutive holiday seasons with a $399/€400 SKU will pretty much saturate that customer segment. Next fall we will see more casual titles like Eye-pet and to tap in to the casual segement they need to get to more of a mass market price.

Even $299 may seem high to some, but factoring in that you get a blu-ray player with your console may motivate some to squeeze it in within their budget. The fact that the PS3 outsold the 360 last quarter at a considerable higher price seems to point in that direction.
 
Rangers said:
They lost 379 m in gaming.

PS3 shipped 2.43 milllion

LTD PS3=16.84m

360 for comparison: Last Q=2.2 m LTD=22.5 m
Click to expand...

I noticed that the PS3 numbers are listed under the heading "Worldwide hardware unit sales", whereas the Microsoft release states "We shipped 2.2 million Xbox 360 consoles".

Are the Sony figures "shipped" too, or actual sales?
 
catisfit said:
I noticed that the PS3 numbers are listed under the heading "Worldwide hardware unit sales", whereas the Microsoft release states "We shipped 2.2 million Xbox 360 consoles".

Are the Sony figures "shipped" too, or actual sales?
Click to expand...

AFAIK all parties now shipped="sold to retail"

A welcome tighter definition than in the past.
 
Rangers said:
LTD PS3=16.84m
Click to expand...

Just looking back through previous years, I must be reading it wrong somewhere :?:

FY 2006-7 (April 1, 2006 to March 31, 2007): 5.50 million units
FY 2007-8 (April 1, 2007 to March 31, 2008): 9.24 million units
Q1 2008 (April 1, 2008 to June 30, 2008): 1.56 million units
Q2 2008 (July 1, 2008 to September 30, 2008): 2.43 million units

Total: 18.73 million units :???:
 
Last edited by a moderator:
Crossbar said:
You bet they will have a $299 SKU next fall.

Going through two consecutive holiday seasons with a $399/€400 SKU will pretty much saturate that customer segment. Next fall we will see more casual titles like Eye-pet and to tap in to the casual segement they need to get to more of a mass market price.

Even $299 may seem high to some, but factoring in that you get a blu-ray player with your console may motivate some to squeeze it in within their budget. The fact that the PS3 outsold the 360 last quarter at a considerable higher price seems to point in that direction.
Click to expand...

Depends on what happens to bluray prices over the next year i'd wager. We may see bluray players as low as $100 next holiday which would only be a drop of a $150 from the current lowest price.
 
Research firm DFC Intelligence has said that the PlayStation 3 is unlikely to break even during its lifetime on sale.

Speaking at the Game On Finance event in the US, senior technology analyst Wanda Meloni argued that "Sony has the most to lose with this current generation," according to a report by Gamasutra.

DFC expects that the PlayStation 3 will only maintain between 40 and 50 per cent of the games market by the end of the current generation, compared to 67 per cent during the height of the PS2 era.

Yesterday, Sony's financial results revealed that its Games division is managing to cut its losses. For the three months to the end of September 2008, losses were at JPY 39.5 billion (USD 405 million), compared to a loss of JPY 96.7 billion (USD 992 million) for the same period the previous year.

PlayStation 3 hardware sales are growing, with 2.43 million units sold for the same three months, compared to 1.12 million the previous year. Unit sales of PS3 software are also up from 10.7 million to 21.1 million, although a decline in PSP and PS2 games has left the company with a drop in software sales overall.
Click to expand...

http://www.gamesindustry.biz/articles/playstation-3-unlikely-to-break-even-says-dfc-intelligence

I have no clue how they are going to get 40-50% of the market though. They are way behind ms who is way behind nintendo.
 
eastmen said:
http://www.gamesindustry.biz/articles/playstation-3-unlikely-to-break-even-says-dfc-intelligence

I have no clue how they are going to get 40-50% of the market though. They are way behind ms who is way behind nintendo.
Click to expand...

Is true they are behind microsoft and nintendo but that is at a much higher pricepoint. There is no way of telling but it is entirely feasible that when it drops to a pricepoint more inline with the others that it will take off (personally i think its doing unbelievebly well considering you can pick up a 360 for £100!), coupled with a potentially very long lifespan and its entirely possible that they end up with 50%

To put a positive spin on it you could say that sony has much more chance of driving demand through pricecuts whereas to some extent the 360 has exhausted this, i simply dont see the 360 dropping much below £100 ever. With regards to the Wii i have no idea but i get the feeling pricecuts may not actually effect demand a great deal (at least not to the same extent), from what ive seen price doesnt seem so be such a barrier as it is. It is relatively cheap already anyhow so a £50 reduction is probably the most i would expect from the wii over its lifetime.
 
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