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Sony Enters Black As Game Division Suffers
Sony Enters Black As Game Division Suffers
July 27, 2006 | By David Jenkins

July 27, 2006 | By David Jenkins
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Officials from Sony Corp. have released better than expected results for the company’s first quarter ended June 30th. However, despite the good news for the company in general the games division saw increased losses.

Aided by a weaker yen, the company saw robust sales of its Bravia line of LCD television and Cybershot digital cameras, and gains in its mobile phone joint venture with Ericsson, with the company’s life insurance and games division highlighted as being responsible for the most significant losses.

The company as a whole reported an operating profit of ¥ 27.05 billion ($232.5m), ahead of forecasts of ¥18 billion ($153m), and significantly more than the ¥6.58 billion ($55.9m) loss at the same time last year.

Net profit was put at ¥32.29 billion ($274.4m), increased from a ¥7.26 billion ($62.8m) loss in 2005. The company’s electronics division, which accounts for around 70 percent of total revenues, saw a $47.4 billion ($402.9m) profit – it’s first in two years.

The release of The Da Vinci Code film saw sales in the company’s movie division rise by 42 percent, although marketing expenses for Monster House ultimately led to losses for the quarter of ¥1.2 billion ($10.4m), compared to a profits of ¥4.2 billion ($36.4m) the previous year.

As a result of manufacturing and research and development costs prior to the launch of the PlayStation 3, the company’s flagship games division saw a 29.1 percent drop in sales and operating revenue from ¥172.8 billion ($1.50bn) to ¥122.5 billion ($1.06bn). Combined profits from the PlayStation 2 and PSP businesses, though, was described as “relatively unchanged”. The operating loss for the division increased from ¥5.9 billion ($51.1m) to ¥26.8 billion ($232.3m).

In terms of hardware sales, the company saw demand for the PSP and PlayStation 2 fall across the board, except for a sales increase for the PlayStation 2 in Europe. Software saw a general decrease, with PlayStation 2 sales dipping worldwide - despite an increase in sales for PSP software.

Worldwide hardware production shipments, a quite separate figure from sales, was put at 2.54 million for the PlayStation 2 (a decrease of 0.99 million) and 2.02 million for the PSP (a decrease of 0.07 million). Worldwide software shipments for the PlayStation 2 were 33 million units (a decrease of 2 million) and 9.1 million for the PSP (an increase of 4.2 million).

In response to the generally positive results, the company revised its overall full year forecast upwards, with operating profit expectations rising by 30 percent to ¥130 billion ($1.1bn) but net profit predictions remaining unchanged at ¥130 billion ($1.1bn).

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