Sony Game Segment Operates at a $45 Million Loss in Q1

For the first fiscal quarter ending June 30, 2012, Sony posted revenues of ¥1.5 trillion ($19.18 billion USD) for the quarter, up 1.4% year over year whilst the company also made a net loss of ¥24.6 trillion ($314.41 billion), an increase from the loss of ¥15.5 billion ($198.11 million) seen last quarter. In the game segment, Sony’s Game division posted an operating loss of $45 million, caused by the decrease in sales of the PlayStation 3 and PSP. The PS Vita partially offset this decrease after its release in December.

A combined number of 2.8 million PlayStation 3 and PlayStation 2 units were sold, down 400,000 units year over year. The PSP and Vita sold a combined 3.2 million units, down from 1.8 million, a drastic decrease as the Vita hadn’t been released yet. Software sales also took a hit, with 20.1 million units sold across the PS3 and PS2, down from 27.6 million from the same period last year and 5.8 million units sold between the Vita and PSP, down from 6.6 million.

Although the decline in business is made more predominant because of the strength of the Japanese yen, over all sales were still down by 10% on a constant currency basis. Sony has re-evaluated their full-year forecasts and lowered it by 8.1% to ¥6.8 trillion ($86.91 billion) for the fiscal year ending March 31, 2013. In a statement, the company said:

“Primarily due to the lowering of the annual unit sales forecast for portable hardware, sales are expected to be significantly lower [for the Game segment] than the May forecast, sales are expected to be essentially flat and operating income is expected to decrease significantly year-on-year.”

Sony’s Q1 financial results are embedded at the bottom of this article.

Analysis: Things aren’t looking pretty grim for Sony at the moment. However, it’s important to bear in mind that most companies tend to have poor performances in the first quarter as most people spend their earnings on hobbies and the like later on in the year. This is exacerbated by the releases of highly anticipated titles being moved to the end of the year or the start of 2013, leaving a relatively empty schedule at this time of the year.

Nevertheless, after seeing these reports, one can see why Sony is looking into announcing the new rumoured model in the PS3 line-up that is said to come in 16 GB, 250 GB, and 500 GB versions whilst being the slimmest console yet. The rumours also state that the 16 GB model will be using flash memory, producing the cheapest PS3 yet.

If it were to come to fruition, this new console would serve as a great way for latecomers to get a Blu-ray player that also happens to play a game at what would be an attractive price.

With the handheld market, PSP sales are going to continue to fall after the arrival of the Vita but all that Sony has to do to get the numbers that they are used to in both hardware and software sales is simply to get more quality titles out the door in a consistent basis. A number of friends of mine love the device and I’ve been impressed with it in the limited amount of time I’ve had hands on time with it, but at this point people are just looking for an excuse to turn the console on lately amidst this dry period for game releases.

Sony’s Q1 Financial Results

Nathan Wood

About Nathan Wood

When he picked up a controller on that fateful day at the age of 6, Nathan had no idea how quickly it would captivate him. Enjoying a wide range of games, he is up for anything as long as it is of good quality, interesting or laughably bad. When not playing or writing about video games, he enjoys music, film, basketball and art. He is currently completing his last year of his IB diploma before mastering the great land known only as: University.