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PS3 Price Drop Leads To Sony Q2 Losses
PS3 Price Drop Leads To Sony Q2 Losses
November 2, 2011 | By Mike Rose

November 2, 2011 | By Mike Rose
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    6 comments
More: Console/PC, Business/Marketing



Sony has posted financial results for the second quarter of the current fiscal year, noting a significant loss in profits for its Consumer Products & Services, which houses its PlayStation products.

The company explained that the loss was down to a number of factors, including the deterioration in the cost of sales ratio as a result of the price reduction on the PlayStation 3 earlier this year.

It also noted that a decline in sales of the video games business, as well as a decline in sales of LCD televisions and unfavorable foreign exchange rates, had led to the losses.

However, during the quarter a total of 3.7 million PlayStation 3 units were sold, compared to 3.5 million for the same quarter in the previous fiscal year.

The PSP also saw an increase in sales, up to 1.7 million units sold compared to 1.5 million year-on-year. PlayStation 2 sales unsurprisingly declined from 1.5 million to 1.2 million.

In terms of software, PS3 sales were up to 37.4 million for the quarter, from 35.3 year-over-year. The PSP dropped down to 8.1 million from 11.0 million, and the PS2 declined from 2.8 million software sales to 5.6 million.

For the quarter ended September 30, the Consumer Products & Services sector posted revenue of 779.7 billion ($10.1 billion), down 12.3 percent compared to 889.0 billion ($11.4 billion), and an operating loss of 34.6 billion ($449 million), compared to last year's 1.0 billion ($12.8 million) profit.

Overall, the company recorded a decline in revenue for the quarter of 9.1 percent, down to 1.56 trillion ($20.5 billion) from 1.73 trillion ($22.2 billion) year-over year. Net loss was 27.0 billion ($350 million), compared to profits of 31.1 billion ($398.3 million) year-over-year.

Sony also lowered guidance for annual losses to 90 billion ($1.6 billion) for the current fiscal year, compared to its original forecast of 60 billion ($768.5 million) profit from earlier this year.


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Comments


kevin Koos
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Maybe people will finally stop declaring "winners and losers" of generations based on sales vs what really matters, profits. MSFT or Nintendo could pump up their sales numbers too with a price drop but step 1 underpants then step 2 then MAKE PROFITS...

Mark dogg
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Profit and loss for a corporation is not an issue for a gamer. MS makes money from XBL where as PSN is free to play. But the gap between PS3 and 360 is now 1.3 million even though it was released a year later and launched at 599

Fiore Iantosca
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Who cares what the gap is.



XBL is better and returning a profit to Microsoft.



Sony has some work to do

Lyon Medina
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@ Christian Keichel



I agree completely, but this is Anthony. You hit him with facts and just well...yeah he throws back alot info. Where it leads I till have no idea



@Anthony



Anthony here is some help, PS3 has a tendency to want gamers with a high disposable income (as they should). Their marketing toward young adults and having their kids be the force as to why they should be buying these products. If anyone is a parent you understand exactly what I mean. I want this!" becomes the only reason why you spend your hard earned cash for something you don't buy normally; I personally think this is how the Wii got so popular at first. What holds back Sony is the company personality and their persona of being for a certain kind of people. They created a white PSP which does great because it makes the game feel more approachable with a lighter color that attracts attention. The gap that Sony is closing in on is very good for them because no matter how much they lose on hardware they can remake on software which cuts profits from it's other competitors when a consumer choose their platform first. They really need to revamp their online pull in the consumer to buy multiplayer games on their platform. If they do that the platform will be the best out there.

Eric Kwan
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I wonder how much money they made from Blu-ray and licensing, though.

Marcus Miller
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Hard to say, considering that Sony only owns a portion of the licensing. DVD sales are also in decline due to streaming movies. I have never heard how much of a cash cow blu-ray has turned out for Sony.


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