Sony Financial Report Indicates $8 Million Loss in Gaming Division

The company has lowered its net profit forecast by 40 percent.

Posted By | On 31st, Oct. 2013

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Sony has released its latest quarterly financial report for the three month period ending on September 31st 2013, and has revealed that its game division suffered a ¥0.8 billion ($8 million) operating loss, significantly less compared to the ¥2.4 billion profit from last year’s quarter.

“The decrease in sales on a constant currency basis was primarily due to a decrease in unit sales of PlayStation 2, PlayStation 3 and PSP hardware, partially offset by increased PS3 software unit sales compared to the same quarter of the previous fiscal year.

While year-on-year sales were up by 5.1 percent ¥155.7 billion, the decreasing value of the Yen as a currency puts this at a 14 percent decrease instead. “This year-on-year decline was primarily due to the impact of of a strategic price reduction for the PlayStation Vita and the unfavourable impact of foreign exchange rates, partially off-set by the above mentioned increase in software unit sales.”

There has been a significant impact on Sony’s income thanks to the PlayStation 4′s costs, which include R&D, marketing and production, thought Sony didn’t mention any figures. “In the Game segment, operating loss significantly increased year-on-year primarily due to an increase in research and development expenses related to the upcoming introduction of the PlayStation 4 and the impact of a strategic price reduction for the PS Vita.”

Game division sales are up 2.8 percent at ¥273.6 billion and Sony is looking to reduce its net profit forecast through a reduction in operations across other divisions including Sony Pictures. This projected profit, which used to be ¥50 billion, has gone down by 40 percent to ¥30 billion.

Given that Sony has had to revamp the PlayStation Network, market several next-gen exclusives, tie up with developers for exclusive content and just outright sell the PlayStation 4, it’s understandable that there would be losses. What will the figures look like after the PS4 launches on November 15th in North America and November 29th in Europe? We’ll find out in the coming months.


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