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Sony's first profit in five years, no thanks to PlayStation
Sony's first profit in five years, no thanks to PlayStation
May 9, 2013 | By Mike Rose

May 9, 2013 | By Mike Rose
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    17 comments
More: Console/PC, Business/Marketing



Although Sony recorded a swing to profits during the last fiscal year -- its first profit in five years -- the company's PlayStation business wasn't so healthy, with a significant drop in operating income.

A notable decrease in the number of PSP and PlayStation 3 units being sold was to blame, said Sony, as well as the poor sales and subsequent price reduction on the PS Vita.

It was the reduction in LCD television losses that really helped Sony turn the tide, as well as the consolidation of Sony Mobile as a wholly-owned subsidiary, and favorable foreign exchange rates.

Sony sold 16.5 million PS3 and PS2 units during the last fiscal year, down compared to the 18 million it sold year-over-year. Meanwhile, 7.0 million PS Vita and PSP hardware units were sold, essentially flat compared to the 6.8 million sold year-over-year.

The company clearly doesn't believe the near-future is very bright for hardware sales either -- it's predicting sales of 10 million for PS3 and PS2 during this fiscal year, and 5 million for Vita and PSP.

Unfortunately, Sony does not break this latter figure down separately into Vita and PSP sales, and there's no mention of how many Vita hardware sales in particular Sony predicts it will make.

As for software, 153.9 million PS3 and PS2 units were sold during last fiscal year, down year-over-year compared to 164.5 million, while 28.8 million Vita and PSP software units were sold, down year-over-year compared to 32.2 million.

For the fiscal year ended March 31, 2013, Sony's PlayStation business saw revenues of 707.1 billion yen ($7.2 billion), down 12.2 percent year-over-year, and operating income of 1.7 billion yen ($17.2 million), down by a significant 94.1 percent year-over-year.

Overall, Sony posted revenues of 6.8 trillion yen ($72.3 billion), up 4.7 percent year-over-year, and profits of 43.0 billion yen ($435.7 million), compared to losses of 456.7 billion yen ($4.6 billion) year-over-year.

Looking to the current fiscal year, Sony estimates that it will continue to increase its profits, but barely -- it's forecasting profits of 50 billion yen ($506.1 million), up 16.2 percent compared to last year.

While the company is predicting a significant sales increase for its PlayStation business, thanks to the launch of the PlayStation 4, it says profits will be "essentially flat" year-over-year, primarily due to PS4 research, development and marketing expenses.


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Comments


Aaron Brande
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This is no surprise really. Mobile gaming is dominated by smart phones now, only Nintendo the long time champs of handheld gaming are able to stay afloat in that market vs. phones. Consoles? The current gen is OLD of course PS3 sales are down, everyone who wanted one probably has it already. Those somehow still on the fence about purchasing one after all these years are likely waiting for the upcoming PS4 launch instead. It will be more telling to the future long term profitability of Sony's gaming arm as we see how the next-gen console wars unfold in 2014.

Mark dogg
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There are still millions of consumers who will go for PS3. There are so many games on it, including GT6 which is supposed to announced on 15th March. With PS4 they definitely have a good chance to make strong begining this time unlike the PS3.

John Flush
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I'm one of those still on the fence for a PS3. I'm really hoping the PS4 can let me do both. Even then PS3's still run $250 - $300 that is way to much cash for something that dies at the end of the year. It also scares me to know what the PS4 will be priced around $400... why wouldn't I wait if the price difference is only $100 and the next gen will last another 6 years?

Eric Geer
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"Even then PS3's still run $250 - $300 that is way to much cash for something that dies at the end of the year"

PS3 is likely not going to "die" at the end of the year, my guess is that the PS3 is going to have a long running well after the release of PS4.

matt landi
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@John. Makes sense to wait. I'm not sure if they have announced the lack/inclusion of backwards compatibility for PS4. If there is none I would still suggest you find a way to play Journey and the Uncharted Series.

John Gordon
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I would not be surprised to see the PS3 to sell steadily for several more years. It's currently in it's seventh year and it still hasn't dropped below $200. It seems like a priced drop is well overdue, especially with the economy being so bad for the past few years.

On the other hand I expect the PS4 to sell terribly. I don't think the market is anxious for an expensive new console.

Ian Uniacke
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I don't see why it would continue selling. The PS2 didn't continue selling to the hardcore crowd, it was all Singstar and the like. Also the PS2 was a mass market device where the PS3 is more niche/hardcore. It's a completely different product and we can't draw any conclusion based on the PS2.

Kujel s
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It really should be mentioned that sony sold two buildings for $1 billion+ each this fiscal year and that is the real reason they turned a profit. I expect next fiscal year they will be back in the red and continue to sink deeper and deeeper into debt as the generation continues.

Ian Uniacke
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Do you have links to back this up? I'm genuinely curious. I would have thought sale of an asset wouldn't be lodged on the profit/loss accounting, since it's just liquidating assets.

Kujel s
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I read about the sales here and else where but I don't have the time to go hunt the articles down as I can never seem to find news articles in under an hour unless I bookmarked them and I just switched to using Linux for my web surfing yesterday so I haven't got any of my old book marks.

Jeferson Soler
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@ Ian Uniacke - Actually, I can help out with the request.

- http://www.ibtimes.com/sony-sells-tokyo-office-building-12-billio
n-seeking-cut-costs-consolidate-its-core-businesses

- http://www.reuters.com/article/2013/01/18/sony-building-idUSL4N0A
N1NL20130118

Also, I may be wrong about this, but I think that even Gamasutra talked about one of those sales. Whether I'm right or wrong about that assumption, it doesn't matter as there are couple links from other sites that do talk about Sony selling the building(s).

Anthony Buggs
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Honestly, the lack of good titles to the Sony line up is whats killing sales. Nintendo to Capcom's Monster hunter and sold millions of 3ds' and Wii and Wii U consonles. Sony's fault was not entirely on the marketing end its made terrible decisions on not picking up titles to sell a systems also. PS4 will suffer just like the PS vita. I bought the Vita on launch and to this date there are still NO good games for the system, minus the HD remakes of games we've all played to exhaustion back when they released on PS2.

John Flush
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@Eric - to me it dies. If I can do everything a PS3 can do, plus a PS4, for a marginal cost increase I see no reason to think the PS3 still exists. This is the reason Backwards Compatibility should be very important to the hardware makers. Sure it is a convenience for those that are already customers, but to those that aren't it is a very compelling reason to switch (such is my case).

Until they reveal more I'm already assuming the PS3 is dead... just like it has been all generation.

At $250 I don't see it being a 'oh, we might as well get one of these now' type items like consoles in the past.

A W
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As far as we know up to this point PS4 will not do physical back compatibility with PS3 games, network, or disc.

Jarod Smiley
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@John Flush If you think PS3 is dead, Then you aren't a gamer...

There's a great amount of exclusive software for PS3 now and will continue in the future. PS4 is changing architecture and b/c would be too expensive. If you don't see the value in PS3 with all the exclusives, PS+, and Sony's strong commitment to supporting platforms for upwards of 10 years, then the device clearly just isn't for you.

PS3 will continue to do fine along side of PS4, it will likely be a better value for years to come.

And this is great news, Sony's Playstation division has left a permanent mark on the gaming world, no one wants to see them go away...

Kujel s
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@Jarod in my opinion anyone who likes ps3 is not a gamer, their exclusives are more story focused and less gameplay focused and gameplay is the core of video games. If I want to be told a story I'll watch a movie or read a book.

You claim no one wants sony to go away but I can tell you at least one person does, me, I'm not happy with their drive for more movie like games. I want more gameplay and less cutscenes which is the exact opposite of what sony has been pushing. I want a dedicated gaming system first and a bluray player never. I bought a 360 and a Wii this gen and do a little PC gaming too but not one sony exclusive has ever interested me. In fact sony is the only platform manurfacturer (aside from apple (who has no interest in the gaming space)) I outright hate.

This is all my opinion and you are welcome to disagree but don't try and convince me to change my view cause it's not going to happen. Now don't think I'm trying to convince you to take my side cause based on your comments I doubt I would succeed, I'm just informing you that your view is by far not the only one and like wise neither is mine.

Jorge Ramos
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I'm actually surprised... oh wait, no I am not.

First red flag was how quickly Sony was dropping PS2 support on PS3's with their revision fetish. The previously smooth transition from PS1 to PS2 (that no doubt helped the PS2 become their single most successful generation) was now fragmented, and core players were having their BC units dropping left and right as a result of the Yellow Light of Death.

Then came the release of the PSP Go, which its inability to support the existing UMD library, coupled with the fact that download titles for it were still going for original MSRP while the same game on UMD could be had for no more than half that helped it to become a failure to anyone that didn't hack theirs, or that simply wanted a good handheld emulator platform.

Follow that up with the Vita, a handheld that Sony seems to want us to get, but will never "get" with anyone that isn't a complete die hard for Sony to begin with. So far the only positive with regard to their PS Plus subscription is the fact that it's made it easy to have an 'instant game library' for both PS3 and PSVita, which at least isn't completely horrible when compared to the obscenity-inducing memory card prices Sony wants to charge.

Now we have the PS4, which has NO backward compatibility with anything from the previous generations of PlayStation, screwing over anyone that was hoping to migrate their existing libraries (digital and disc) to the new system. It replaces Start and Select with Options and a "Share every stupid little thing you do to [insert social networks here]" button, which no gamer ever wanted from their console.

It's amusing that the division that ended up carrying them for so long (especially during the PS2 era) is now the area of the company that its executives seem to so actively vilify.


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