Sony has warned investors that due to the PlayStation Network data breach, the Japanese earthquake and tsunami and deferred tax write-offs, the company is looking to lose ¥260bn ($3.1bn) in the 2011 fiscal year, according to a report by GI.biz (reg required). This is a dramatic shift from their estimated profit of ¥70bn ($855m) that they had in prior projections.
Though most of the loss could be chalked up to deferred write-offs, two unforeseen events hampered the bottom line. The first was the break-in of the PlayStation Network in April, which Sony estimates will ultimately cost the company ¥14bn ($171m) by the end of FY12. Also hurting Sony was the earthquake and resulting tsunami from March, which has cost Sony ¥17bn ($207.5m) in FY11, and is looking to cost Sony around ¥150bn ($1.8bn) by the end of FY12.
Despite these figures, Sony is projecting a return to profitability in FY12 overall.
Analysis: Bear in mind that unless stated, these figures are for the company itself. However, the cost of the PSN breach is significant, both in the size of the numbers, and the knowledge that despite projections for those numbers, Sony *STILL* expects to make a profit. That’s the good news.
The bad news is that the company has a massive problem in terms of overall share, and overall perception, as a blistering special report by Reuters shows. It’s a damning indictment of Howard “Is My Week Not Good Enough” Stringer. Furthermore, I think the games division is in some serious trouble. Companies aren’t going to have much faith in Sony after data thefts and outages of this magnitude, but the problem is deeper than that. Sony is finding a risky niche with its hardware: power gamers. As a power gamer myself, I love Sony’s systems; I prefer the PS3 and PSP to their counterparts, warts and all. But I’m not the driver of the market anymore. The casual gamer is, and really always has been. That casual gamer is now playing on Facebook, and buying $1 games on their cell phones. I think the Nintendo 3DS will do well eventually because the games will come out for it that people want, but does Sony have that advantage? Do they have a system seller that is a “must have” for a kid, or even more importantly, that kid’s mother? Their attempts to break into the mainstream have been pathetic (Move). It’s not in their DNA, and they don’t have the corporate flexibility to be able to get past that.
As for the PSN not coming back up, there could be many reasons for it. They are irrelevant; that was a publisher’s memo that got leaked, and that means Sony just basically pulled the rug out from their publishers again. Either the system is legitimately not ready (the PSN is going through maintenance as I speak), or they literally held it back to screw with the press, a tactic Nintendo’s perfected. If it’s the former, it’s possibly so that they can get Japan on board with the PSN coming back up. If it’s the latter, then simply put, to hell with Sony.