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Sony Reports 32 Percent Sales Drop, Declining Hardware

Sony Reports 32 Percent Sales Drop, Declining Hardware

January 29, 2009 | By Eric Caoili

January 29, 2009 | By Eric Caoili
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Sony's game division saw a year-on-year sales decrease of 32.2 percent for the quarter ending December 31st, down from ¥581.2 billion ($6.43bn) in 2007 to ¥393.8 billion ($4.36bn), due to the strong yen and a decline in all of its video game unit sales.

Though the company primarily blamed its year-on-year 97 percent drop in operating income to ¥400 million (4.42 million) on unfavorable exchange rates against the U.S. dollar and Euro -- a similar challenge also snagged Nintendo -- it also acknowledged a decrease in worldwide hardware unit sales.

PlayStation 3 sales fell 440,000 units to 4.46 million systems sold during the quarter. The company's PlayStation Portable moved 680,000 fewer units year-over-year, and only sold 5.08 million during the October-December period. PlayStation 2 likewise saw its hardware numbers decrease by over 53 percent year-on-year, dropping by 2.88 million to only 2.52 million units sold.

Though worldwide software unit sales were up for the PlayStation 3 by 14.8 million units to 40.8 million sold during the quarter, negative numbers for the other two platforms brought overall software unit sales down.

The PlayStation 2 saw its software unit sales dramatically decreasing 51 percent compared to the same three-month period in the previous year, down by 31.2 million units to 29.7 million. The PlayStation Portable also suffered a decrease of 2.8 million units to 15.5 million.

Following losses in Sony's Game division and a planned restructuring for the overall company that will see 16,000 employees laid off in an effort to save $2.9 billion, it remains unclear whether the company will cut its PlayStation staff -- though widespread reports have suggested significant reductions there are unlikely.

"As long as we plan prudently, I think we will be fine," said SCE Europe president David Reeves in December. "We have a good business model. People will continue to buy the hardware, continue to buy the software. I'm convinced of it."


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