PS3 News: Sony Shrinks Loss Expectations, Profitability Near - PS3 News

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Sony Shrinks Loss Expectations, Profitability Near

Although the annual report isn't due out until Thursday, Sony revised its earnings estimate for their fiscal year ending March 31, 2010.

According to GameSpot, Sony still expects to post a loss of 41 billion yen ($440 million) but that's a good deal less than the previously anticipated 70 billion yen ($752 million). The reason for this significant revision is due to Sony's Networked Products & Services Division, which includes Sony Computer Entertainment; this division will surpass earlier estimates by about 10 billion yen ($107 million). This enhanced dollar amount is "due to improved performance within the game business" and further helped by VAIO computer manufacturing. Furthermore, the reduced cost of producing LCD TVs lowered the loss estimate and for the full year, Sony expects slightly lower revenues of 7.214 trillion yen ($77.46 billion) and an operating profit of 32 billion yen ($343 million). The latter is a drastic turnaround compared to the operating loss of 30 billion yen ($321 million) it had expected back in February and furthermore, a survey of analysts has predicted that the company will return to profitability this coming fiscal year.

The better performance of the gaming division isn't exactly a surprise, based on the success of the Slim and PS3 exclusives but all in all, it's good to see Sony rebounding.

5/10/2010 9:38:52 PM John Shepard

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Comments (43 posts)

sunspider13
Monday, May 10, 2010 @ 9:56:03 PM
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It's good to know that Sony will start turning a profit soon. They deserve it.

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MartyRules
Monday, May 10, 2010 @ 10:01:43 PM

Ya I really feel this is Sony's year to retake contoll.I'm guessing Sony will have one the console war 3x in a row.I think thats a record!

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Scarecrow
Monday, May 10, 2010 @ 9:58:56 PM
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Gran Turismo 5 will be their biggest game this fiscal year. They'll do pretty well.

Great to see that quality is still rewarded in the long run.

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Milonakis
Monday, May 10, 2010 @ 10:12:48 PM
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Sony is the only major electronic manufacturer that doesn't piss me off. Glad there making their nut.

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BTNwarrior
Monday, May 10, 2010 @ 10:16:31 PM
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Its good to see some momentum, hopefully sony will keep it up cause it would appear that every year just gets better than the last and I would like it to stay that way

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Dancemachine55
Monday, May 10, 2010 @ 10:18:27 PM
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From a business standing point, Sony made a lot of expensive mistakes in the design and launch of the PS3 way back in 2005/2006.

The SCE division was a giant black hole in the Sony Corporation. No wonder they couldn't afford to keep all those exclusives they once had.

But the times they are a-changin'. SCE is profiting from games, accessories and the PSN, even if the console still sells at a loss. Sony once again have a strong foothold in the Console Wars, and are willing to change and adapt to this ever changing industry while still having the guts to take financial risks.

The PS3 console alone was a massive risk in itself. I guess they were right when they said the arrogance is gone. They are no longer riding on the PS2 popularity bandwagon, but are pushing the PS3 into popularity against 360 and Wii.

The big competition between all 3 consoles has created the biggest advancements in gaming this generation. Anyone agree?

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tes37
Monday, May 10, 2010 @ 11:34:21 PM

Great post Dancemachine55

"The big competition between all 3 consoles has created the biggest advancements in gaming this generation. Anyone agree?"

I agree with you, but Sony seems to be the only one who's not content with sitting idle and continues to innovate.

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Dancemachine55
Tuesday, May 11, 2010 @ 2:27:33 AM

@TES37

Agree with your there about Sony leading the way. But let's not forget Nintendo. They literally changed how we view and interact with mainstream video games, and created the mainstream casual gamer.

The only company sitting idle right now is Microsoft. All thy seem to be doing is playing copy-cat. More Halo, more Gears, more Fable, and an Eyetoy rip-off.

I really wouldn't be surprised if MS announce a whole new console next year just to combat the Wii and PS3, and jump the gun for the next-gen console war with another rush-job.

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kraygen
Tuesday, May 11, 2010 @ 3:02:54 AM

"From a business standing point, Sony made a lot of expensive mistakes in the design and launch of the PS3 way back in 2005/2006. "

I agree with all you said except for maybe this. How else could they have handled the launch. To make the console cheaper it would have either had to user cheaper more defective parts or have less features and really be a completely different ps3.

The ps3 was literally ahead of its time, but sony planned for the long haul with their system. At first they did lose a lot of money, but look at the end result. 360 is so completely outdated now, but it's too early for them to realistically make a new console.

Now sony is making money and they are the console of choice. The ps3 is looking as tho it could easily surpass the ten year mark with new additions being added all the time.

I just think that if sony had not been willing to lose money early on, we would not have had the ps3 we know and love. I for one am grateful.

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Shams
Tuesday, May 11, 2010 @ 5:03:36 AM

Yup, I agree it's too early for the next-gen. But, even with Natal, and Move on the horizon, I'm sure MS has their next-box in development. Only problem is Bungie's with Activision, so MS doesn't have a Halo or system-seller for launch as they had this gen. I'm sure they're already in talks with studios like Respawn, but we're not gonna hear anything until Gears3 and Mass Effect 3 are released (and maybe Crackdown 2 might be worth mentioning, but all three of these titles still don't have the marketing glitter that Halo and MW had). So Halo Reach has been aptly named, because they're really going out on a limb with that one.

Sony on the other hand has got Modnation Racers, KZ3, R3, inFamous 2, Shadow of The Colossus sequel, GT5, LBP2, FFxiii Versus, MotorStorm 3, Demons Souls 2, and let's not forget Uncharted 3. I'm sure now more than ever that although total sales most likely will still be a close call, I invested in the right console this gen for my gaming needs. MS's shoddy business practices of buying timed exclusives hasn't left them with a whole lot, while Sony's investing in 1st/2nd party studios will carry them well through this and the next generation. And that's precisely why I opted with Sony in the first place!

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Dancemachine55
Tuesday, May 11, 2010 @ 8:02:27 AM

@ kraygen

Very good point. I guess Sony knew what they were doing. They were in it for the long haul. The only problem at the time was its advertising. That has been very well resolved lately.

I see the one problem Sony had in 2006 was that the console was almost TOO different from the competition, and it scared a lot of people. Once development kits got out, and Sony reps showed developers the ropes, people started realising what the PS3 could do.

I guess in retrospect, MS and Nintendo were only looking 2-3 years ahead of themselves, while Sony was looking 10 years ahead.

Thank goodness Sony has all those other divisions though, cos if they were simply a gaming company, they woulda gone bankrupt and lost everything within the first 2 years of the PS3 being out.

Reminds me of the Neo Geo, the Sega Saturn and all those other consoles that failed cos they were expensive and different. But Sony has something they didn't... big games.

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kraygen
Tuesday, May 11, 2010 @ 12:58:31 PM

@ Dancemachine55

I agree the marketing for the ps3 was nonexistent and was definitely a mistake on their part.

@ Shams

I kinda doubt they will be looking to respawn simply due to the fact that respawn is under contract to publish thru EA and EA doesn't do console exclusives. Most likely the contract would also keep respawn from using any other publishers, so M$ will have to look elsewhere.

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Shams
Tuesday, May 11, 2010 @ 3:11:23 PM

Yeah, I hear ya, Kraygen. I didn't mean to imply Respawn would be considered for putting out an MS exclusive. I just meant MS might be talking to them already, because MW was a system seller, particularly for 360's, even though it wasn't an exclusive.

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kraygen
Tuesday, May 11, 2010 @ 5:43:19 PM

@ shams

Oh, very true, I understand now. I'm hoping tho that respawn goes an entirely new route. Away from fps so as to show us what other talents they may have.

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maxpontiac
Monday, May 10, 2010 @ 10:19:32 PM
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440 million is a ton of money to be losing. But it is good to hear that Sony is due to become a profitable company this upcoming year.

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tes37
Monday, May 10, 2010 @ 10:57:16 PM

"Sony expects slightly lower revenues of 7.214 trillion yen ($77.46 billion) and an operating profit of 32 billion yen ($343 million)".

They lost 440 million from one division in Sony. As a whole they made 77 billion. When other divisions within the company does well, they help sustain the losses. Sony made money, just 440 million less than they should have.


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mike rlz
Monday, May 10, 2010 @ 10:25:22 PM
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oh to be a corporation. we only lost 440 MILLION... not bad.

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eLLeJuss
Monday, May 10, 2010 @ 10:38:44 PM
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Make ffVII remake and make it exclusive to the ps3. You'll make 41211029309213.981 kazillion profit.

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Dancemachine55
Tuesday, May 11, 2010 @ 2:30:02 AM

LOL

I would line up at midnight and demand the store be open for an FF VII remake launch on the PS3.

Hear us Square Enix and EB Games/Gamestop!!! I midnight launch and we will be there!!!

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Vitron
Tuesday, May 11, 2010 @ 7:03:24 AM

Well, let's hope so...

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shadowscorpio
Tuesday, May 11, 2010 @ 1:22:23 PM

Yeah. 3 million copies would be gone in less than a week. BACK TO THE PRESS Sony and Square Enix!

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BikerSaint
Monday, May 10, 2010 @ 10:42:41 PM
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440 Million???

Hell, if the wind were to only blow one $20 bill out of my hand, I'd have a freaking heart attack!!!

Last edited by BikerSaint on 5/10/2010 10:43:10 PM

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OtisFeelgood
Monday, May 10, 2010 @ 11:34:54 PM

lmao

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Highlander
Monday, May 10, 2010 @ 10:42:45 PM
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Recessions always hit makers of premium goods hard.

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Snaaaake
Monday, May 10, 2010 @ 10:45:43 PM
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Maybe UC2, FFXIII and GOWIII played a huge part in reducing Sony's loss.

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booze925
Monday, May 10, 2010 @ 11:39:44 PM
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hell, even ur guys' nemesis activision said sony could dominate 2010...
good sign.... i think.

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Qubex
Tuesday, May 11, 2010 @ 12:15:55 AM
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Sony dropped the ball with the PS3, promising too much too soon. Nevertheless their exclusive studios have helped them pull through... in the end it is down to the software after all...

Q!

"never.too.late"

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Highlander
Tuesday, May 11, 2010 @ 1:50:51 AM

To be fair, Sony and the PS3 had to endure three straight years (2005/2006/2007, and some of 2008) of unremittingly and aggressive negative press, spin and propaganda by the Microsoft friendly game/tech media.Even today, this lingers. Without that campaign of Fear Uncertainty and Doubt, the PS3 might have accelerated more quickly, and not suffered so badly from things like 'bad port' syndrome.

Did they make mistakes? Surely. But they didn't drop the ball. They certainly bobbled the ball a bit though.

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Dancemachine55
Tuesday, May 11, 2010 @ 2:39:09 AM

Agree with you there Highlander.

Sony did make a bit of a mess with the PS3's hardware, and it was SO different that very few developers were willing to put the effort into developing for it.

I gotta hand it to Insomniac with Resistence: Fall of Man. They had to emulate the PS3 hardware over several computers cos the development kit had not been released by SCE yet. Now THAT'S dedication!!!

Yes the PS3 had a rocky start and bad press, but Sony didn't just twiddle their thumbs and be arrogant about it. They DID something about it.

1. Focus on top-notch AAA titles.

2. Put faith into the blu-ray medium, which was their crutch at first, but is now the prized possession in the PS3.

3. Focus on quality, tiny fail-rate.

4. MGS4, Resistence, Killzone 2, Littlebig Planet, Infamous, God of War III, Gran Turismo 5, and they plan on releasing a tonne of more exclusives.

5. Kevin Butler began advertising the PS3. Greatest Sony marketing campaign ever!!!

6. The price was dropped and a slim model was released with a smaller, cooler chip. The final hurdle had been crossed for Sony.

I don't think there is one person here who doesn't love Kevin Butler. Even a few Xbots can't deny his charm.

Last edited by Dancemachine55 on 5/11/2010 2:41:03 AM

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Vitron
Tuesday, May 11, 2010 @ 7:05:48 AM

Uncharted dude, Uncharted...

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Dancemachine55
Tuesday, May 11, 2010 @ 8:05:18 AM

Wow!!! How could I forget to list Uncharted in that. Love that game.

Thanks for the heads up. PS3 finally has a flagship hero. Nathan Drake.

Followed by Ratchet, and Old Snake.

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shadowscorpio
Tuesday, May 11, 2010 @ 1:26:20 PM

@ Dancemachine55

Kratos doesn't make the list?

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Dancemachine55
Wednesday, May 12, 2010 @ 12:29:47 AM

@ Shadowscorpio

I did include God of War 3 in the list of great exclusives.

... but missed Kratos when thinking of a console icon. Woops.

Okay, Sony really needs to push for a console icon for the PS3. Nintendo STILL has Mario, MS has Master Chief for Xbox, and Sony has either Kratos, Nathan Drake, Ratchet or Cole from Infamous... wait, WAIT...

Ladies and Gentlemen, introducing the PS3 character icon to lead the console....

SACKBOY from LITTLEBIG PLANET!!! :)

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FullmetalX10
Tuesday, May 11, 2010 @ 2:21:07 AM
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Let's hope next year they don't lose anything, and only profit from the gaming industry.

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Dancemachine55
Tuesday, May 11, 2010 @ 2:43:51 AM

Are you saying they don't profit from their other film and tech industries? Cos they do, very much.

The gaming division of Sony is the only black hole for them cos of the PS3's high tech and high price to make.

I consider it a Godsend that Sony sell the PS3 for less than what it costs to make. They have the consumer in mind, particularly the ignorant consumer who knows nothing of tech and video games but only notices price.

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___________
Tuesday, May 11, 2010 @ 2:32:43 AM
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if they cant make a profit with all the games there releasing now than sh*t i guess they should just quit.
one thing i dont understand though, they have been bitching that there extremley low on supply of ps3s, there saying stores are completley sold out.
but than they have a promo on now that if you buy a bravia TV you get a free ps3.
yeah, thats a great way to solve shortage problems.
instead of sending them to the stores, send them to people who probably dont want them!

im puzzled by sonys logic at times, thats if you can call it that!

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Dancemachine55
Tuesday, May 11, 2010 @ 2:51:57 AM

NOOOO!!!!

If Sony quits, then only the family-friendly Nintendo is left to innovate!!! We all know MS doesn't do a damn thing to innovate the industry!!

Sony only thought TOO far ahead of the times. The PS3 had too much potential in 2006, and only NOW its potential is being realised!!!

The PS3 hasn't even been maxed out yet!!! Even God of War 3 didn't max it out, nor Final Fantasy XIII!!! The 360 was maxed out with Gear 2, so it struggles to do any better.

I can see why you don't like Sony's decision to send consoles to TV buyers instead of games shops, but think of it this way...

these people who don't know a lot about consoles are being introduced to the PS3 and what it can do. The people waiting to get one already have their heart set on it, so it doesn't matter if they have to wait, it's still a definite sale.

Giving away PS3's with Bravia TV's is what saved the PS3 AND generated sales of their Bravia TV's which make a HUGE profit compared to the PS3.

From a business standing point, it makes a lot of sense.

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Vitron
Tuesday, May 11, 2010 @ 7:51:51 AM

Business, is not easy as it seems...

but then again, its good idea

Last edited by Vitron on 5/11/2010 7:54:03 AM

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___________
Tuesday, May 11, 2010 @ 7:57:47 AM

lol, i was not serious.
id be kicking and screaming if sony gave up and left the video game business, they release too many games i like.
i was being sarcastic, as in if what there doing now is not enough to push out their consoles than they might as well give up because theres not much more they could be doing.

as for the ps3s with their TVs, no its not a set sale.
some people go to the shops looking for a console and will buy whats available.
if they go in and have no idea what they want and the guy behind the desk says you can walk out with a 360 now, or i will call you when we get our stock of ps3s in probably 2 weeks time.
which one do you think their going to choose?

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kraygen
Tuesday, May 11, 2010 @ 3:13:08 AM
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I really hope they not only start profiting, but profit a lot, that way we won't have to worry about anyone at sony saying, maybe we should stop making consoles, they cost us money. Shudder to think.

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shadowscorpio
Tuesday, May 11, 2010 @ 1:31:44 PM
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Well Sony profitting is a great thing. They have an awesome collection of 1st party exclusives though I do miss them being able to keep those 3rd party's like they used to.

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RebelJD
Wednesday, May 12, 2010 @ 2:06:27 AM
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I'm rooting for Sony. When they start earning profit and no longer losing money I'll be happy for them. This company seems to stick behind their products for the long run and I think that's great.

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PaiNT_kinG
Thursday, May 13, 2010 @ 10:33:40 PM
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doesn't surprise me one bit ;)

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