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Sony posts big losses -- and expects losses this year too
Sony posts big losses -- and expects losses this year too
May 14, 2014 | By Mike Rose

May 14, 2014 | By Mike Rose
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    10 comments
More: Console/PC, Business/Marketing



As expected, Sony posted significant losses for the last fiscal year today -- and the company admitted that it projects losses for the current fiscal year too.

Sony recorded a 6.2 billion yen ($60.7 million) write-off of PC game software sales from Sony Online Entertainment, leading to overall losses for its games business.

But Sony's PlayStation business also took a hit, due to increased costs related to the launch of the PlayStation 4, and poorer-than-expected PS Vita sales.

The PS4 and PS3 sold 14.6 million units during the last fiscal year, down from the original forecast of 15 million, while the PS Vita, PSP and PS Vita TV only sold 4.1 million units, down from the original forecast of 5 million.

Notably, Sony told Gamasutra last year that this 5 million forecast was a worst-case scenario, suggesting that the Vita has sold far worse than the company was anticipating -- and the company only expects Vita and PSP sales to total 3.5 million during the current year, so it's clear no resurgence is on the way.

But for the current year, Sony believes a swing back to profits for its game business is in order, thanks to increased PS4 sales, and a decrease in costs related to the PS4. The company believes it will sell 17 million PS4s and PS3s combined this fiscal year.

There's some good news: Overall software sales are up from 266 million units in the previous fiscal year, to 374 million units last year. And Sony forecasts this figure will jump slightly to 390 million in the year ahead.

Elsewhere in the company, it was Sony's Devices department that really did a number on the company's earnings, due to impairment charges.

For the fiscal year ended March 31, 2014, Sony's Game business saw revenues of 979.2 billion yen ($9.6 billion), up 38.5 percent year-over-year, and operating losses of 8.1 billion ($79.3 million), compared to operating income of 1.7 billion yen ($16.6 million) year-over-year.

Overall, Sony recorded revenue of 7.8 trillion yen ($76.4 billion), up 14.3 percent year-over-year, and losses of 128.4 billion yen ($1.3 billion), compared to profits of 41.5 billion yen ($406.3 million) year-over-year.

For the current fiscal year, Sony is forecasting revenues of 7.8 trillion yen ($$76.4 billion), up 0.4 percent year-over-year, and losses of 50 billion yen ($489.5 million).


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Comments


Jay N
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So it's not just Nintendo that's missing its sales forecasts, is it.

That must be a comfort to at least some people.

Russel Aronchick
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I'm fairly certain Nintendo still has it worse off, since they ONLY exist in the games and console market space, right?

Benjy Davo
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But have billions of dollars so much that they cannot go out of business Russel. Unlike Sony who are in whopping amounts of debt and some think will be in administration in a few years. (I own a PS4 not a fanboy)

Jay N
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@Russel: Yeah, 'cause the rest of Sony is in great shape, right? ;-)

Come to think of it, how's Microsoft doing nowadays? Windows 8 ain't exactly taking the world by storm, is it? And the announcement that they're dropping mandatory Kinect from Xbox One must be because of the cost. Or else they'd simply lower the price to meet Sony.

Nintendo's cash reserves are pretty decent, yes.

E Zachary Knight
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Jay,

Yeah, I do believe that the XBone announcement was due to cost. They are already selling the XBones at a loss with the kinect and that loss would have become insurmountable had they simply chopped $100 off the price. The only way to retain viability as a loss leader, they had to strip the Kinect.

Brian M
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Microsoft is doing really well actually, they recently posted a company record 80 billion net profit and their stock is on a 15 year high.

http://www.extremetech.com/computing/175350-microsoft-delivers-re
cord-revenue-profits-due-to-strong-xbox-windows-phone-and-commerc
ial-sales

Ian Uniacke
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Er I think you mean "8" billion. If they were making 80 billion profit every other share on the planet would have become junk by now as everyone tries to dump their money into Microsoft. ;)

Brian M
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Apologies, I mixed the revenue ($77 billion) with the net income (which was 26.7 billion), nearly 8 billion just in Q4.

http://www.microsoft.com/investor/EarningsAndFinancials/Earnings/
PressReleaseAndWebcast/FY13/Q4/default.aspx

Merc Hoffner
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At the end of the day Nintendo is intrinsically lean: with only ~7000 employees, it's pretty hard for them to get into scary trouble for real - they could literally cease all operations tomorrow and keep all their employees on payroll for 20-30 years before they're in real operational trouble. With ~140,000 employees Sony is in a much more precarious and sensitive situation - with those kinds of 'overheads' any change in their revenue is much more high stakes for them. That's more workers than Microsoft!

Eric Harris
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No more Sony TVs and VIAO computers. Sony is in trouble, but everyone is mad at Nintendo although they have enough stability to do just fine. Really, the economy or industry is changing. I think the people who were part of the video games market might have been priced out of it as the systems are significantly more expensive than they used to be. In addition, the games market is wider with so much more than console games to choose from.


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