Sony game unit's Q2 losses double
group.owner
Though company is back in black overall, SCEI posts $841 million
operating loss thanks to aggressive PS3 hardware pricing, declining
PS2 sales.
By Tor Thorsen, GameSpot
Posted Oct 25, 2007 11:03 am PT
It was the best of times and the worst of times for Sony during its
second fiscal quarter. The three months ending September 30 saw the
electronic giant back in the black with an operating profit of ¥90.5
billion ($787 million), up from a ¥20.8 billion ($180 million)
operating loss the year before and over analysts' expectations.
Overall Q2 revenue increased from ¥1.85 trillion ($1.6 billion) to
¥2.08 trillion ($1.8 billion), courtesy of surging sales of Bravia
HDTVs, VAIO PCs, and digital cameras. Profits were also up slightly at
Sony Pictures Entertainment, the company's film and television
division.
The story was much different over at Sony Computer Entertainment Inc.,
even though its revenue increased 42.9 percent to ¥243.4 ($2.1
billion). The company's game unit saw operating losses more than
double, going from ¥43.5 billion ($378 million) to ¥96.7 billion ($841
million). In Sony's own words, the shortfall was "due to the loss
arising from the strategic pricing of PS3 at points lower than its
production costs and PS3-related inventory write-downs." As of
September 30, Sony's worldwide game inventory had increased 31.7
percent to 247.8 billion ($2.15 billion) "due to the buildup of
finished goods following the introduction of the PS3 platform."
Hardware sales-wise, the three months ending September 30 saw Sony
sell--not ship--1.31 million PS3s worldwide. The company also sold
3.28 million PlayStation 2s (a decrease of 0.31 million from Q2 2006)
and 2.58 million PlayStation Portables (an increase of 0.56 million).
The company did not break down said sales by region.
When it came to software, Sony sold 10.3 million PS3 games
internationally during its second quarter. PS2 games decreased by 9.2
million units to 38 million, with PSP games dipping 600,000 units to
12.6 million units worldwide. No specific games were called out as
being best sellers.