Sony Third Quarter Earnings Call

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Sony Third Quarter Earnings Call

Consolidated sales increased by 10% year-on-year to 2.859 trillion yen. Other income and expenses improved 98.2 billion yen. This was mainly due to the recording of a gain of 81 billion yen from the global IPO of Sony Financials Holdings. Sony Ericsson posted an 18% year-on-year increase in unit sales to 30.8 million units. Picture segment sales decreased by 25% year-on-year primarily due to lower revenues from films released in the theatrical and television markets.

In the Game segment, sales increased 31%.

Approximately three quarters of sales came from hardware and accessories and the rest from software. Overall, hardware sales increased due to the contribution from PS3.

PS2 has reached its eighth year-end selling season, and although unit sales decreased year-on-year, PS2 sale continued to exceed the previous year in Eastern Europe, Middle East, and Asia, and the company expects the console to continue to contribute to business. As a result of the strength in the PS2 business, the company is revising unit forecast upward for the second time this year, and expects to sell 13 million units during the current fiscal year. This compares with initial forecast of 10 million units and more recent forecast of 12 million units.

PSP hardware unit sales increased year-on-year. The console gained popularity among a wide user base after the introduction of the new model, expansion of the software offering, and an enhancement of the mobile entertainment experience through the addition of features such as TV viewing. Having reached a record for year-end selling season sales, the company will further expand the software offering and features and services associated with the device accelerating expansion of the platform. As a result of the strength in the PSP business, the company is revising PSP unit forecast upward for the second time this year, and expects to sell 13 million units during the current fiscal year. This compares with initial forecast of 9 million units and more recent forecast of 10 million units.

- After the introduction of a new model and the reduction in sales price last fall, the expansion of the PS3 platform reached a new level as sales increased significantly. The world of PS3 entertainment is expanding as the cumulative number of disc based software titles released for PS3 at the end of December exceeded 250, and as a wide variety of downloadable titles has also been distributed. The company has revised downward fiscal year unit sales forecast from 11 million units to 9.5 million units.

- Although PS2 and PS3 software sales declined due to a decrease in units, overall software sales for the segment increased due to contributions from PS3.

Operating results for the Game segment improved by 67.1 billion yen year-on-year to a profit of 12.9 billion yen, posting the first quarterly profit in two years. Although PS2 profit decreased year-on-year, both hardware and software for that platform contributed to the profit of the segment. Strong sales of the new PSP model contributed to an increase in profit from that platform, and as a result of hardware cost reductions and software sales, losses in the PS3 business decreased.
 
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