News Article

Sony Slips Out of Profitability, Adjusts Annual Profits Forecast

Posted by Sammy Barker

Holding out for a Hirai

Sony’s brief period of profitability came to a cruel conclusion with its second quarter financial report earlier today, as it posted a net loss of ¥19.3 billion ($197 million) for the period spanning July to September. The company had previously recorded profits of ¥3.5 billion ($35 million) in the first quarter of 2013, but now it's right back in the red that new gaffer Kaz Hirai has fought tirelessly to pull the firm out of.

It was the organisation’s movie division that was largely to blame, with Sony Pictures recording a whopping ¥17.8 billion ($181 million) loss during the window, compared to a ¥7.9 billion ($80 million) profit the year prior. The loss was attributed to the disastrous performance of White House Down, which flopped terribly compared to sure-bet The Amazing Spider-Man in 2012. We’ve got to be honest, we’ve never even heard of the former flick.

Nevertheless, the PlayStation division didn’t exactly help matters. The gaming group lost a comparatively slender ¥800 million ($8 million), compared to a ¥2.3 billion profit ($23 million) the year prior. The company attributed the loss to the PlayStation Vita’s price cut, as well as the ongoing development costs of the PlayStation 4. The corporation sold two million PlayStation 3 and PlayStation 2 consoles during the quarter, compared to 3.5 million year-over-year. Disastrously, portable sales halved from 1.6 million to 0.8 million.

The overall loss forced the electronics giant to slash its annual profits forecast for the fiscal year by 40 per cent, with the firm now predicting that it will pull in ¥30 billion ($305 million) by the end of March 2014. It cited decreased expectations in the sales of “certain electronic products” as the reason for that, but there’s no sign that its impending next generation console will factor into that statement, as it still anticipates that the PS4 and PS3 will move 15 million units this fiscal year.

At the Tokyo Game Show, group president Andrew House revealed that the platform holder hopes to shift five million units of its soon-to-be-released system before the close of the important business calendar, and it looks like it’s sticking to that prediction. Still, with the overall firm back in the red, the pressure is on the PlayStation business to once again bring in the goods for Sony as a whole. Good thing the platform’s been pre-ordering pretty well, huh?

[via sony.net, joystiq.com, eurogamer.net, computerandvideogames.com]

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User Comments (7)

charlesnarles

#1

charlesnarles said:

Sony always sells consoles at a loss. And yeah, I assume that's not including all the profits from preordered ps4s and cameras and games and PSplus. And then regular sales can begin! They'll be okay, so many people are gonna get ps4s dude

get2sammybAdmin

#2

get2sammyb said:

@charlesnarles It's saying that PS4 will be sold at a loss, but will be profitable alongside the sale of a game and PS Plus membership. Looking at the numbers, Sony Pictures shoulders the blame for the bulk of this result. Still, not good. Bet they're glad they've got Spider-Man 2 next year.

Munkyknuts

#3

Munkyknuts said:

I feel I should have pre ordered a PS4 to do my part in saving the poor fellows. Although not financing a turgid steaming pile of donkey turd like 'white house down' would have helped....or at the very least not at the same time as the slightly better and almost identical 'Olympus has fallen' came out in direct competition to it. I'll go and buy Metro: Last Light from the PS store right now and do what I can to help. I had to edit this, I got the two film titles switched around...they really are interchangeable :p

longshot28

#4

longshot28 said:

Picking up a copy of KZ day one and a year sub to PSN , best way to help sony out in this situation.

belmont

#5

belmont said:

Why they show sales combined? I was somewhat curious to see how much Vita and PSP sold on their own.

Carl-G

#6

Carl-G said:

I try my best to help SONY each year:D Last week i got a PSVita + a Xperia Z1. BOTH are AMAZING products:P & next...oh it's the 1st today!...so later THIS MONTH!?!?! I will be getting my PS4 to ;) (UK for me) Hope that helps SONY;)

Slapshot

#7

Slapshot said:

The amount of capital it's spending to manufacture, ship, market and advertise its PlayStation 4 console could easily run into the tens of millions (USD) and if you factor in the R&D cost associated with the console, I'd image that could put it well over a $100 million. I couldn't image that investors were expecting a great report this go around. I actually expected it to be back in the red pre-launch.

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