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PlayStation sales down as Sony posts record full year losses
PlayStation sales down as Sony posts record full year losses
May 10, 2012 | By Mike Rose

May 10, 2012 | By Mike Rose
More: Console/PC, Business/Marketing

Sony today posted record losses for the last fiscal year, due in part to its declining video game business, although the company estimates that it will swing to profits during the current fiscal year.

The company put its losses primarily down to the impact of foreign exchange rates and the disruption caused by the Great East Japan Earthquake and the floods in Thailand -- however, it also noted that market conditions in developed countries have deteriorated.

Its Consumer Products and Services division, which houses its PlayStation and TV businesses, amongst others, saw notable losses compared to the previous year, as sales of both PlayStation hardware and TVs were down.

The PlayStation business in particular saw decreased revenue from the PlayStation 3 hardware, due to the strategic price reduction during the year, and sales of both its PSP and PlayStation 2 consoles also fell.

During the 2011 fiscal year, Sony sold 13.9 million PlayStation 3 units worldwide, compared to 14.3 million sold year-over-year. The PlayStation 2 sold 4.1 million units, down from 6.4 million year-over-year, and the PSP sold 6.8 million, down from 8.0 year-over-year.

In terms of software, the PlayStation 3 saw 156.6 million units sold worldwide, up from 147.9 million in the previous year, while 7.9 million PlayStation 2 software units were sold, down from 16.4 million year-over-year, and 32.2 million PSP software units sold, down from 46.6 million year-over-year.

Although hardware and software sales figures for the newly released PS Vita were not provided as part of the financial results, CEO Kaz Hirai revealed during the company's earnings call that the handheld had sold 1.8 million units by the end of March.

For the fiscal year ended March 31, 2012, the company's Consumer Products and Services division posted revenue of 3.2 trillion yen ($39.3 billion), down 18.5 percent year-over-year from 3.8 trillion yen ($48.3 billion), and losses of 229.8 billion yen ($2.9 billion) compared to profits of 10.8 billion yen ($135.5 million) in the previous fiscal year.

Overall, Sony posted revenues of 6.5 trillion yen ($81.5 billion), down 9.6 percent from 7.2 trillion yen ($90.1 billion) year-over-year, and losses of 456.7 billion yen ($5.7 billion), compared to losses of 259.6 billion yen ($3.3 billion) year-over-year.

Looking to the current fiscal year, Sony expects to swing back to profits, as it currently forecasts revenues of 7.4 trillion yen ($92.9 billion), an increase of 14.0 percent year-over-year, and profits of 30 billion yen ($376.5 million).

The company estimates that, for the current fiscal year, it will sell around 16.0 million PlayStation 3 and PlayStation 2 hardware units combined, and 16.0 million PS Vita and PSP hardware units combined, while the company estimates software sales figures for each console will be approximately the same as the year just gone.

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Alex Nichiporchik
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Sony needs to admit it's console business hit a wall.

Ask anyone who tried iPhone gaming if they'd be willing to put $20, $30, $50 for a mobile game? And pay $200 for a dedicated gaming console?

I played with the Vita. It's a fantastic device, honestly. I just don't see the reason to switch from a cheaper iPod touch or (my single daily device) an iPhone that gives me all of content at a fraction of the price.

If you've tried Airplay gaming, you're not going back. When (not if) Apple starts to push Airplay Gaming -- using your iPad/iPhone as a controller for a game on your Apple TV, Sony's console business is in trouble as well.

What they need to do -- and very fast -- is reevaluate their pricing strategy, open up to developers and leverage their ecosystem of the Vita and the PS3.

There are many game developers who'd jump the opportunity to easily publish a game on Sony's platform, with the right revshare. But they are not going through the closed platform procedure, with lots of contracts, devkits, etc.

Sony - open up, embrace the micro-pricing model. I love your products, but for the first time ever didn't feel the need to buy one (the Vita). Something's wrong with that.

Alex Nichiporchik
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@Anthony -- we both are more hardcore gamers (I assume you are), and I'm also not dropping the couch experience.

But looking at the majority of the market, and where the growth is, I strongly believe the traditional/core/console companies need to do a mindshift. Look at the whole motion sensor non-sense. The Kinect is doing OK-ish, while the Move is a disaster.

The Move is an honest stab at casual gamers, and it failed. Which is why Sony needs to seriously reevaluate their distribution model and, as I said, OPEN UP.

Andy Lunique
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I agree, Sony needs to get into the game early when it comes to the cloud and tablet advantages of gaming. They even have the potential to beat out the Wii-U's device and start working out as a remote control. The power for the system is there, the resources are there, the software is there so what's stopping them? I've had the chance to use Airplay and I love it, but I own a vita and I use remote play when I can, and I would love to see more that being worked into the system. I can't agree with you more when it comes to your opinion on Micro-pricing, it's a fantastic and effective system for today's market.

Mike Motschy
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I agree with what you say, except for the Airplay gaming. Maybe it's just me, but using an iPhone/iPad for a controller for a game on your TV does not sound fun. Touch is easy now, because I can look to see where I am touching and the game is right in front of me. But for gaming on a TV you don't look at your controller, and if each game has it's own controller scheme it will be very hard to memorize the locations of those keys.

Andrew Chen
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The airplay point is a good one, but I would take it a step further and postulate that Apple is preparing a full on blitz of the gaming market (big companies gonna seek growth right?). They have been building that team of seasoned game industry executives presumably for this purpose and not because the Apple board admires their golf game.
I figure all they really need to do is release that oft-rumored controller/control device that allows traditional style games to be played wiith their mobile devices. Airplay beams the image to the TV, you control with a nice cushy familiar gamepad. With the full might of Apple marketing and control over the whole distribution chain such a device would see support from every game app developer - it would be as demanded a feature as retina graphics. They can even offer it in multiple form factors (seperate vs enclosure) and colors for a little bit of that extra Apple profit juice.For instance, a wireless dual stick controller (presumably shiny And with metal parts) that works on your phone, your tablet, your iTV and perhaps your would further galvanize their ecosystem of products and perhaps even convert some hard-spending holdouts.

Alex Nichiporchik
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@Andrew -- they will never dive into the "hardcore" couch experience with a physical controller

They already have the most natural controller ever -- the touch interface

And they have content that anyone can understand

(I will eat my hat if they do and actually make it work)

Now, what they could do is what the Wii U will try to do. I can imagine games that expand to the big screen in a smart way.

If airplay=yes; turn iPhone into controller with only couple of buttons on the touch screen + tilt/accelerometer controls

Or same if airplay=yes; the touch interface is used for virtually appearing joysticks on the main (TV) screen

Remember, the gameplay on most successful iOS games is restricted to only several inputs, the games are deep but simplified -- which is one of the factors of it's success.

In either way, seeing how I'm using the AppleTV daily (more than the PS3/Xbox, and not the Wii for 2 years now), Apple has the unique opportunity to capture and revive a market

Chris Huston
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"...the most natural controller ever -- the touch interface."

Without getting into a semantical analysis about whether this is true or not (which I don't think it is), I would disagree with this in the contextual terms that the touch interface is a better controller than a physical one. Particularly for action games like FPSs and racing games, I'd be shocked if gamers find the touch/tilt interface gives them a greater sense of control than a physical controller or keyboard and mouse.

Even on simpler fare, touch interface controls, at least in my experience, are less reliable than a physical controller. Sometimes, for example, points on the screen I'm told to tap I may not hit exactly where the screen will read it as a touch, compared with pressing a physical button or trigger where there's no question about whether it's being pressed or not.

I'm not at all convinced that the touch/tilt interface is either the most natural or, more to the point, better than a physical controller. In fact, every time I pick up my iPod Touch to play one of those games, I've wished, in every case, that I could hook up a gamepad instead of using the device (screen/tilt). Of course, that's just in terms of playability, since that would defeat the purpose of the form factor's portability. The point is, that the touch/tilt interface *sacrifices* playability/control.

Andrew Chen
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@Chris: I find my opinion of touch controls falls above yours. Having had my iPod Touch replace my beloved red DS was no small revelation, and as Chris points out the portability and convenience of the platform was a big part. Nevertheless, without good games that controlled well, it wouldn't matter if all the games were free. I have had a number of terrific unique game experiences, but noticeably those games were created with direct-touch-input at their core.

I agree that touch controls are terribly unsatisfying for a seasoned gamer when they try to ape certain schemes (particularly when trying to navigate an on-screen avatar) and are hard for me to tolerate for shooters, action/platform and many racing types. However, other game types (simulation, puzzle, adventure, board, rpg and strategy types) just fly for me and I would venture to say in many cases are better than traditional controller/mouse&keyboard schemes.

@Alex: But the challenge remains that touch controls have not proven suitable for many of the popular traditional game types. To bridge that gap, and leverage all these other wonderful things your mobile can do with the large core gamer market, Apple needs a method or specific product to remove this barrier of adoption. Time well tell if an in-house controller is part of their strategy but I firmly believe that if they don't do it they are leaving a large part of the market for a competitor (and maybe MS will thank them)...and I can't see them neglecting to capture all of this market value that is ripe for their taking.

Marcus Miller
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It should be noted that Microsoft's Xbox division is losing a lot money too. So this is not just a Sony problem. I wonder if we are seeing the twilight of console gaming system.

Matthew Mouras
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Can you link to some research to support this? Just curious - I haven't seen that.

Camilo R
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I believe the MS entertainment division was posting profit from 2008 all the way until last quarter in which it posted a relatively small loss, so I'd be interested in some research on this as well.

Andrew Chen
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...progress? ...
I understand they went into this market knowing they would likely be absorbing considerable losses but I had thought at least this gen had broken near even for them. Thanks for laying out the numbers.
It's nice to be so awash in cash-flow I guess. Curious to see how they handle this next transition what with their mobile presence currently being so weak but the company so obviously readying to make a gargantuan push into unifying the consumer computing markets. I feel sure the XBox and Live brands are slotted to play a significant role but I can't help but wonder if MS just took too long.

Jon Dowsett
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Xbox is doing quite well - those minimal profits lately have many products dragging down xbox in the entertainment division.

Chris Huston
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Marcus may be referring to sales, even though his word choice is actually about profit. I haven't been able to dig up the links, but I'm sure I've seen it reported that Xbox sales are down from last year, even though they are doing better than everyone else.

Also, MS's entertainment division -- specifically, called "entertainment and devices" -- also entails Windows Phone and Mediaroom, and they don't break out numbers for each. So it's hard to tell just how much of the negative or positive can be attributed to Xbox.

Whatever the case, I would bet they are profitable, but sales are down (as they are for pretty much everybody) compared to last year.

k s
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This makes it much harder to believe they will release a playstation 4, the playstation division losing 2.8 billion is not something to scoff at. To the best of my knowledge they've never really actually made profit on the ps3 (over the total life of the system) and this loss only sends the platform further into the red.

Terry Matthes
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It doesn't help that when you compare online games between Xbox and Playstaion the Xbox live network almost always has better latency. Street Fighter, Call of Duty, you name it.

Kyle Bue
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See, this is the reason why I don't get why people complain so much about paying $60 a year for XBL. In this case, you really do get what you pay for.

Jeremie Sinic
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I'd love Sony to make their legacy PSOne and PS2 catalogue more accessible to non-Sony hardware owners. There's very small chance I ever get a Vita, but I would be glad to download some games at cheap price on my PC (a la Steam).

Wylie Garvin
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Shadow of the Colossus (along with its predecessor, ICO) has been ported to the PS3 and released as a bundle. So for that specific case you can already have a smooth HD experience. :)

But I agree with the general point, that there's a lot of really excellent PS2 games, that no one except PS2-owners really gets a chance to play. For me personally: Okami, Katamari Damacy, Psychonauts and R&C: Up Your Arsenal are four games, each of which would easily justify the purchase of a PS2 to play it, even today.

k s
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@Wylie Garvin only Rachet and Clank is a playstation exclusive so those examples don't really support your point.
BTW I have Okami for my Wii and Psychonuats for my Xbox both of which are great games.

Nou Phabmixay
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You probably still can't play PSOne games on the Vita. I would actually love to play games from the PSOne to the PSP on the Vita. There's probably a better chance on waiting for the games to be remade.

I still enjoy games and non-games on my Vita. I just still need my PSP.