PSP News: Sony's 3Q Report Could Show 50% Drop - PSP News

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Sony's 3Q Report Could Show 50% Drop

We expect to see Sony's official report on their fiscal third-quarter financial earnings tomorrow, but in the meantime, Bloomberg predicts a drastic fall in the year-over-year earnings.

After surveying five analysts and their expectations, the median estimate turned out to be a very low 84.1 billion yen (about $680 million), which is far below last year's third-quarter take of 168.9 billion yen (approx. $1.38 billion). The report made mention of Nintendo's refreshed charge into the game world, stating that Sony has "failed to fend off Nintendo." Worldwide, Nintendo's Wii has outsold Sony's PS3 by nearly a two-to-one ratio, although that can easily be attributed to the massive PS3 shortage (especially in Japan) during the tail end of 2006.

Thanks to the huge amount of cost due to the PS3 endeavor, they expect Sony to lose a record 191.9 billion yen (about $1.57 billion) from video games once the fiscal year is over. This would be in massive contrast to last year, when Sony actually made a significant game profit of 8.7 billion yen ($71 million). Sony has taken the high cost of the PS3 production into account, as they dropped their profit prediction for the fiscal year to 80 billion yen ($656 million) last October.

Even so, shares in Sony jumped 6% earlier this month, their biggest increase in over a year. The only question now is, can those shares maintain that increase once these third-quarter results are posted...?

1/29/2007 Ben Dutka

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