Sony Q3-08 Financials Thread

Code: 
[B]Shipped Oct-Dec[/B]
PS2:  2.52m
PSP:  5.08m
PS3:  4.46m
Wii: 10.42m
NDS: 11.89m
360:  6.0m

[B]Shipped 2008[/B]
PS2:  8.88m
PSP: 15.39m
PS3: 10.77m
Wii: 24.84m
NDS: 31.43m
360: 10.8m

[B]Shipped LTD[/B]
PS2: 138.15m    36Q    3.83mpq
PSP:  51.26m    17Q    3.01mpq
PS3:  21.35m     9Q    2.37mpq
Wii:  44.97m     9Q    4.99mpq
NDS:  96.22m    17Q    5.66mpq
360:  28.45m    13Q    2.18mpq
 
catisfit said:
Code: 
[B]Shipped Oct-Dec[/B]
PS2:  2.52m
PSP:  5.08m
PS3:  4.46m
Wii: 10.42m
NDS: 11.89m
360:  6.0m

[B]Shipped 2008[/B]
PS2:  8.88m
PSP: 15.39m
PS3: 10.77m
Wii: 24.84m
NDS: 31.43m
360: 10.8m

[B]Shipped LTD[/B]
PS2: 138.15m    36Q    3.83mpq
PSP:  51.26m    17Q    3.01mpq
PS3:  21.35m     9Q    2.37mpq
Wii:  44.97m     9Q    4.99mpq
NDS:  96.22m    17Q    5.66mpq
360:  28.45m    13Q    2.18mpq
Click to expand...

PS3 and 360 equal in 2008? source?

what's this stuff? "13Q 2.18mpq"
 
deepbrown said:
PS3 and 360 equal in 2008? source?
Click to expand...

Seems about right. Dec quarter was 6.0 Xbox ~4.5 PS3. But I recall PS3 shipping around a million more in a previous Q.

Looks like the MPQ stuff is million per quarter. And how many quarters=13Q.

Only thing is I have the Xbox at exactly 28.5 to date, and PS3 at exactly 21.3. 16.84 end September +4.46 End December=exactly 21.3. So I wonder where these two decimal precision figures such as 21.35 PS3 are coming from.

Typically I've seen only MS give figures to one place (aka 6.0 million) and Sony to two (4.46). Not sure where people would be getting more exact or differing (in the Sony case) figures than I have..

As to Sony's game profit, it was much better than I expected, but it is down 97% to 3Q 07 and GAF seems to think it's pretty bad (and that the next Q will be awful). Not sure how to read it. Not sure what it means to a potential price decrease either.

I guess falling PS3 hardware costs are being offset by lower PSP and PS2 sales. And the Yen is the real killer.. The Yen means Sony already had nearly a $100 price decrease, just consumers never saw it. Anyway, heres a nice slide about it.

11_image.jpg
 
Last edited by a moderator:
Rangers said:
Seems about right. Dec quarter was 6.0 Xbox ~4.5 PS3. But I recall PS3 shipping around a million more in a previous Q.

Looks like the MPQ stuff is million per quarter. And how many quarters=13Q.
Click to expand...

Didn't Sony change the way they recorded numbers in 2007 from shipped to sold?

"Beginning with the quarter ended June 30,2007,the method of reporting hardware and software unit sales has been changed from production shipments to recorded sales."
 
deepbrown said:
source?
Click to expand...

This is probably my most hated word on the internet.

Sony

08q3_sony.pdf, page 5, table 1, row 3:
"PS3: 4.46 million units"
08q2_sony.pdf, page 4, table 3, row 3:
"PS3: 2.43 million units"
08q1_sony.pdf, page 4, table 2, row 3:
"PS3: 1.56 million units"
07q4_sony.pdf, page 5, table 1, row 3:
"PS3: 9.24 million units"

The final figure is for YE March 31, so removing the previous three quarters gives the Jan-Mar figure.
9.24-(4.9+1.31+0.71) = 2.32 million units.

So 2.32 + 1.56 + 2.43 + 4.46 = 10.77 million units.

Microsoft

Q2-09_10Q.doc, page 26, paragraph 5:
"We shipped 6.0 million Xbox 360 consoles during the second quarter of fiscal year 2009"
Q1-09_10Q.doc, page 22, paragraph 1:
"We shipped 2.2 million Xbox 360 consoles during the first quarter of fiscal year 2009"
Q4-08_10Q.doc, page 14, paragraph 3:
"We shipped 1.3 million Xbox 360 consoles during the fourth quarter of fiscal year 2008"
Q3-08_10Q.doc, page 21, paragraph 2:
"We shipped 1.3 million Xbox 360 consoles in the third quarter ... of fiscal year 2008"

6.0 + 2.2 + 1.3 + 1.3 = 10.8 million units.

deepbrown said:
what's this stuff? "13Q 2.18mpq"
Click to expand...

How many quarters each unit has been on sale for; millions of units sold per quarter, taking a direct (and hence unseasonal) average.

Rangers said:
Only thing is I have the Xbox at exactly 28.5 to date, and PS3 at exactly 21.3. 16.84 end September +4.46 End December=exactly 21.3. So I wonder where these two decimal precision figures such as 21.35 PS3 are coming from.

Typically I've seen only MS give figures to one place (aka 6.0 million) and Sony to two (4.46). Not sure where people would be getting more exact or differing (in the Sony case) figures than I have..
Click to expand...

360 Q2 (Jan-Mar 06) was reported to two decimal places (1.75m), hence the additional 0.5 which you must not have. PS3 was 16.89m end Sep, perhaps their erroneous reporting of FY to March 07 is the difference, you may have used a slightly different calculation there. The one I used tallies with the Nintendo shipped comparisons, which has every other quarter for PS3 spot on.
 
catisfit said:
This is probably my most hated word on the internet.

Sony

08q3_sony.pdf, page 5, table 1, row 3:
"PS3: 4.46 million units"
08q2_sony.pdf, page 4, table 3, row 3:
"PS3: 2.43 million units"
08q1_sony.pdf, page 4, table 2, row 3:
"PS3: 1.56 million units"
07q4_sony.pdf, page 5, table 1, row 3:
"PS3: 9.24 million units"

The final figure is for YE March 31, so removing the previous three quarters gives the Jan-Mar figure.
9.24-(4.9+1.31+0.71) = 2.32 million units.

So 2.32 + 1.56 + 2.43 + 4.46 = 10.77 million units.

Microsoft

Q2-09_10Q.doc, page 26, paragraph 5:
"We shipped 6.0 million Xbox 360 consoles during the second quarter of fiscal year 2009"
Q1-09_10Q.doc, page 22, paragraph 1:
"We shipped 2.2 million Xbox 360 consoles during the first quarter of fiscal year 2009"
Q4-08_10Q.doc, page 14, paragraph 3:
"We shipped 1.3 million Xbox 360 consoles during the fourth quarter of fiscal year 2008"
Q3-08_10Q.doc, page 21, paragraph 2:
"We shipped 1.3 million Xbox 360 consoles in the third quarter ... of fiscal year 2008"

6.0 + 2.2 + 1.3 + 1.3 = 10.8 million units.



How many quarters each unit has been on sale for; millions of units sold per quarter, taking a direct (and hence unseasonal) average.



360 Q2 (Jan-Mar 06) was reported to two decimal places (1.75m), hence the additional 0.5 which you must not have. PS3 was 16.89m end Sep, perhaps their erroneous reporting of FY to March 07 is the difference, you may have used a slightly different calculation there. The one I used tallies with the Nintendo shipped comparisons, which has every other quarter for PS3 spot on.
Click to expand...

Well it's best just to put source at the bottom :)

Is Sony shipped or sold...?
 
I split this off from the other thread since it's better if distinct things be dealt with in specific threads.

Anyway I've listened now to both conference calls, and while I'm debating writing up a formal article, here are the major takeaways as I see them from what I heard on the call. Incidentally, if anyone else plans to listen to the conference call themselves, I recommend the Japanese call w/English translation vs the actual US call, as the former is an order of magnitude more insightful.

Here's the major points of interest I gleaned from the call (beyond the financials themselves):

1) LCD televisions are the biggest single-sector drag on the company right now, and a lot of what happened to one-two punch Sony in this regard was the constrained panel supply picture over a year ago. Due to the perception of ever-increasing demand, Sony contracted their panel supplies well in advance - think of it like how some airlines and shipping companies hedge against fuel costs. When the demand/supply picture blew up last year, the downward spiral of panel prices led to massive TV set price deterioration in the market, but Sony was stuck with a legacy cost structure essentially for that years sets. Which made competition in that space against players that were putting present-priced panels into market all the more costly.

2) The Euro-zone, from an exchange rate perspective, is the bleakest for Sony right now. With the US in terms of a lot of their electronics, manufacturing in China provides a buffer as the Chinese yuan and the US dollar are loosely tied. Thus, currency can be kept within that manufacturing/sales loop and repatriated to yen when convenient/needed. Europe doesn't enjoy that at all, and thus Sony is more directly exposed to the direct volatility of the currencies. Setting up European manufacturing operations is not a viable option in this environment, and as such we have the pre-reported answer of potential price hikes on Euro-zone electronics when/where needed.

3) The new Spring line of electronics is already 'committed,' and we'll be seeing it shortly. For Fall, the plan is not yet set in stone, and Sony will be reacting based on what the year starts to shape up like. Inventories at preset are higher than they'd like, but with manufacturing reductions they hope that their upcoming lines will hit the right supply target.

4) Not selling as many cameras as they'd like, but still a profit source, and system LSI is also profitable at the moment. Digital cameras are already double-digit precentage produced in China by the way, though the extent was not clarified. Also remember that when we're saying 'produced,' silicon (in this case CMOS sensors) is still largely from Sony's own plants/fabs.

5) Sony Ericsson is a drag right now having swung to serious losses, but they are restructuring and Sony expects them to be profitable again in 2010. They were asked essentially if it was worth staying in that joint venture by an analyst, and Sony feels that there are very important synergies gleaned tying into their electronics division. Oneida seemed genuinely positive/supportive of the whole thing.

6) The Sharp joint venture on Sharp's 10G LCD plant has been postponed, and we'll know more by end of June. Sony still feels there's an advantageous relationship to be had there, but the sense conveyed is that the capex amount/terms are being renegotiated. And of course, it's not 100% certain to happen. But they are still sounding inclined at least.

7) One thing I did glean from the US call in fact, is that Sony Pictures plans roughly 21 movies this year, and that funding for them was secured in advance. Indeed Sony feels confident they have adequate pre-existing funding for movies for beyond this year. I didn't realize it myself (because I hadn't thought of it before), but apparently there's a complete freeze on the acquisition of funding for new films in Hollywood right now, which is the reason the question was asked, and the answer given.

8) Back to the Japanese call, of course the PS3. The hardware itself is expected to continue to lose money through until the later half of the year. Now, it was unclear what kind of year they were talking about, and even the clarification (of which there was) didn't actually clarify, but the impression is by March of '10. That is assuming the present forex situation; improvement or deterioration will effect it as one would expect. 45nm Cell chips are in production at present, and will be making their way into retail by the later half of the year - whatever that means, but it's of course tied into the break-even/profitability on hardware. I would assume simply that the quicker the present inventory of 65nm chips is run down, the sooner we'll see that 45nm revision come into the channel.
 
Carl B said:
7) One thing I did glean from the US call in fact, is that Sony Pictures plans roughly 21 movies this year, and that funding for them was secured in advance. Indeed Sony feels confident they have adequate pre-existing funding for movies for beyond this year. I didn't realize it myself (because I hadn't thought of it before), but apparently there's a complete freeze on the acquisition of funding for new films in Hollywood right now, which is the reason the question was asked, and the answer given.
Click to expand...
As I understand it, there is not a complete freeze on acquisition for funding in Hollywood (this is obviously a studio-by-studio call), but in general getting funding is hard to come by in all businesses right now due to the credit crunch. I'd imagine that's why it was asked.
 
Asher said:
As I understand it, there is not a complete freeze on acquisition for funding in Hollywood (this is obviously a studio-by-studio call), but in general getting funding is hard to come by in all businesses right now due to the credit crunch. I'd imagine that's why it was asked.
Click to expand...

Well yeah, that's of course why it was asked. But the funding they're talking about is external to the studios themselves. Clearly any purely internal funding call can still be made at the discretion of the studio in question, but it would come out of cash in that instance. So essentially, back to square one to begin with, since that would be an extremely rare occurrence today.
 
It's just what Oneida said, so there's no insight into whether that's with a price cut or not. They mentioned how 2008 was previously stated to be a year of fleshing out the PS3 network/platform, and that 2009 will be a year for pushing the hardware/software... but I don't think such esoteric vagaries actually mean anything in terms of a strategy beyond the norm. For myself I would assume it's without a price cut all things being equal, but at the same time if the yen devalues it would allow for: a) hardware profitability sooner, and/or b) a price cut while maintaining the same profitability time frame. Saying the hardware will be profitable along its present course by the 'later half' of the year though doesn't in my mind preempt or prevent a price cut though; it's simply up to Sony to determine which course is the best one for them as the year progresses. No doubt the post Killzone environment will be one of assessment/reflection, and we'll probably hear something more concise (though never outright overt) in the year end call in ~three months.

As a personal aside, I was actually shocked at SCE turning in a profit this quarter. We all know (or should know by now) the effects of the yen appreciation on the cost to Sony of the PS3, but what we haven't really mentioned before that plays into the division profitability is the effect on PS2/PSP. Those units have had their profitability hurt just as directly, so Sony is in a position where the PS3 costs them more relative to a weaker yen environment, and the PS2/PSP earn them much less. A ~20% move is a margin destroyer for sure. So whether it be the increased PS3 software sales or true back-breaking efforts at cost reduction, I'm honestly surprised they kept it in the black last quarter.
 
Rangers said:
So you think PS3 hardware not profitable until March 010?
Click to expand...

They said "until the latter half of the year". If they were talking FY ending March 2010, then the latter half of the year would mean at some point between October 2009 and March 2010. As Carl B said, a swing in FX could affect it quite a bit either way, which is probably why they've not been any more precise than a six month window.

I would expect their prediction is based on market estimates of how FX rates will move in that time, coupled with their plans for price cuts and schedule for bringing hardware cost reductions through. It doesn't make much sense to make estimates like that without taking as many contributing factors into account as possible.
 
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