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PlayStation division posts loss of $841 million in Q2


Sony has announced its Q2 earnings, which ended on September 30th. The PlayStation business has doubled its losses from the previous quarter. Operating losses were reported at 96.7 billion yen ($841 million). Sales, however, climbed almost 43 percent to 243.4 billion yen ($2.12 billion).

Why such significant losses in spite of terrific sales? Pricing of the PS3 hardware: "strategic pricing of PS3 at points lower than its production cost and the increase in PS3-related inventory write-downs recorded during the current quarter compared to the same quarter of the previous year." Sony sells each PS3 system at a loss, and they sold 1.31 million PS3 systems during this quarter. That has undeniably bled Sony's bank. 10.3 million units of PS3 software were also sold this quarter.

Analysts are not very optimistic about the future of PlayStation. "There are still no bright signs for the game business," Seiichiro Iwamoto, a fund manager at Mizuho Asset Management in Tokyo told Bloomberg. "PS3's price is still too high to help Sony regain market share."

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(Page 1)

1. Ouch. They've still gotta be losing money on every console, I wonder how much? It took 360 a little over a year to cut it's costs down until it started making a small profit.

Posted at 11:31AM on Oct 25th 2007 by Frank

2. Remember the Xbox360 has not yet made a profit.

Posted at 11:48AM on Oct 25th 2007 by Zim

3. Why not buy a 360? Oh, I dunno..paid online, horrible track record with quality, no high-def movie playback without an expensive addon, super loud fan noise, disc-scratching mayhem. Should I go on?

The PS3 is maturing. Sheesh. Give it time and give developers time to get their quality anywhere near Resistance or R&C: Future. Nobody can whine about a $400 console that does what the PS3 can do. BC gone? Oh well. It's not like there are any new blockbusters on the horizon for the PS2 anyway.

Posted at 11:51AM on Oct 25th 2007 by Popfrogs

4. Actually Zim I believe they are making a small profit now, 40-60 dollars I think I read. Sorry to be off topic!

Posted at 11:53AM on Oct 25th 2007 by Frank

5. @ #2 yeah, i was thinking the same thing.

no Backwards compatibility kinda kills it for me.

If i have to keep my PS2 around then maybe i'll just get a 360 instead to play FIFA 08.

oh and yeah i have a ps2 and psp.
was looking forward to the psp / ps3 inter-active games that were hyped too.

Posted at 11:56AM on Oct 25th 2007 by debaser

6. @alis77777:

Wow, there is so much fabot bullsh1t in that post that I can smell it from here!

How is the 80gig BC a joke? It works for over 90% of PS2 games. I doubt you will miss the EE since all of the PS2's popular games seem to work flawlessly. And I don't know where you live, but in my neighborhood games store I have bought 8 PS3 games that I really liked plus over a dozen over the PSN (Warhawk anyone?!)

Oh and by the way, the 360 doesn't play PS2 games either. Just thought you should know.

Posted at 11:56AM on Oct 25th 2007 by Akamaru

7. Pop-

In all fairness...Live is better then PSN at this time, and it should be, it's a pay service. You're correct with the horrible track record on the hardware, although I've not had any of the RR0D, never wanted an HD movie play back add on for my gaming console, won't use my PS3 to watch Blue Ray either, it's to play games, besides I have a very nice HD-DVD stand alone player, fan noise was louder on the first 360's, really don't notice it except on a few games on my elite, and never had a disc scratched by any of my consoles from the PS1 forward.

Posted at 11:58AM on Oct 25th 2007 by Knight Marquise

8. Well, I am getting my PS3 next week so I hope it helps :)

Posted at 12:00PM on Oct 25th 2007 by Anghel

9. I think this explains the sale of the CELL to Toshiba.

Posted at 12:02PM on Oct 25th 2007 by Gavin

10. Take this with a grain of salt.

First off, this is the Summer quarter where people traditionally don't spend time buying and playing video games.

In reality the Blu-Ray player is what's causing a larger loss that the PS3 would have without it.

Still, Sony has the cash, and taking a large loss now to establish Blu-Ray is well worth it for them.

How long did Sony take a massive loss with the PS2 before it broke even??

If Sony is not selling hardware after the November price reduction and the Christmas rush, and after all the good games coming out between now and February 28th, then we might have a issue. Otherwise, no sweat.

Oh, and I have a PS2 and a PSP - and I got my PS3. No 360 for me, thank you very much...

Posted at 12:02PM on Oct 25th 2007 by russ99

11. Sony probably figures that people who are buying the PS3 now (having solved money issues) probably already have a PS2. Besides, how many people actually play Xbox games on their 360? And I don't remember, but wasn't MS taking a loss for every unit sold since the original Xbox only to finally make some profit over the last year? Now that profit's being used for fixing the broken RROD boxes. I hope my 360 breaks down again before warranty is up so I can send it in and hopefully get the new rumored "quiet" 360s.

Posted at 12:05PM on Oct 25th 2007 by leiwei

12. @4

I held off on a 360 for those same reasons, but what with this fall and the games coming out I couldn't resist getting an Elite. I only paid 40 bucks for 13 months of Live too. I don't regret my purchases whatsoever.

With that said, I am looking forward to the day I can purchase the PS3 with great games and exclusive experiences for it. I am talking about experiences the PS3 can only give me.

Posted at 12:06PM on Oct 25th 2007 by ryano

13. MS is now making a profit on all Xbox 360 consoles sold. Thanks mostly to the 500,000 consoles sold in September, along with the 3+ million copies of Halo 3 already sold.

With that being said, I don't see how Sony and its investors can be anything but distraught by this news. Not a good year for Sony and with them trailing very far behind Nintendo and MS, I don't see it getting much better for them. But hey, I guess it can only get better from here... though that's not saying much.

I own all 3 consoles BTW, but honestly wish I hadn't wasted $600 on a console that I haven't played since early summer. I don't give 2 sh*ts about any games coming out this year and that includes R&C and Uncharted. All of the GOOD/GREAT games are on the 360 and that's all I need.

Posted at 12:14PM on Oct 25th 2007 by Ian

14. For me it is all about the games... 360 still has 1-2 games i want to play but not worth shelling the money for. Wii no games so far and PS3 a few but PS3 has the most promising upcoming lineup to me at least. If FF13, MGS4 ,whiteknight etc. all go to 360 then i would follow...

Posted at 12:15PM on Oct 25th 2007 by shase

15. I love the PS3, but I'll be surprised if either it or the 360 really make much profit with the Wii around, getting so much attention. I noticed the BAFTA awards gave quite a few to Wii sports- that's because it really is innovative, whilst the heavy duty consoles just have more of the same (only better). Whatever anyone says, the critics (including Metacritic) have the last word as far as artistic achievements go and there lies deserved success (rather than skillful, organised hype).

Of course, I'll enjoy my PS3 and the big games still to come. But in terms of their software lineup, PS3 and 360 don't yet deserve to be big hits. Really, they need to take a few more risks with revolutionary gaming, methinks- not easy with their massive development budgets.

Posted at 12:38PM on Oct 25th 2007 by Starfire

16. Sorry just to clarify, MS is not making a profit per console sold, just that the amount of software sold is staring to make the division profitable. But realize that overall MS has lost billions on the Xbox360, so one good month isn't going to turn that around anytime soon. Xboxes are still failing out there and I think MS is simply falsifying reports on profitability.

Again too is the fact that the Xbox has been out 2 years, PS3 11 months. PS3 finally has decent software being released. Anyone thinking that the PS3 isn't going to turn a profit next year shouldn't be on this fansite.
If you haven't touched your PS3 since summer and don't like ANY new games coming out this Fall for it, WTF, are you dead? Go to XboxFanboy.com, your on the wrong website.

Posted at 12:39PM on Oct 25th 2007 by chris.westermann

17. @17 Ahmen

but Seriously i have a 60GB and i am buying a 40gb and who knows how many games my freind is getting a 40gb since BC isn't important to him and you never know optimstic about having BC later on in a Firmwire download is possible since 80 is Software emulation. but yeah so many people complaining about BC obviously arn't paying attention to the up and coming PS3 games for this and next year.

Posted at 12:44PM on Oct 25th 2007 by RazielDune

18. So you people's next generation console purchases are based on ability to be BC? WOW. And I thought next-gen actually meant next-gen.

I'm sure a year from now you'll all be still playing your last-gen games on your next-gen console. Thank god for multiple input on my TV and multiple wall sockets in my room. Bah, not really. Last gen games look like sh*t on any HDTV anyway.

Posted at 12:47PM on Oct 25th 2007 by Bryant

19. @15, not going to happen, especially White Knight as it's being published by Sony.

@2, the BC on the 80GB is at 90% or so efficiency right now and it increases with every firmware upgrade. I know someone who has one and has never had an issue with any of his PS2 games playing. 60GBs are still in a good amount of stock anyway and probably will be until the end of the year.

@14, most of those games are on PS3 as well. PS3 technically has more exclusives if you've seen any of the various lists on the Internet anyway.

Really though, I'm not worried at all about this. PS3's doing fine for what its price is. Also, you can't forget that the PS2 sold at a massive lost for a long time before it became profitable. In time, the PS3 will do the exact same.

Posted at 1:22PM on Oct 25th 2007 by Cagalli

20. RazielDune,

BC is not likely possible on the 40GB, if you pay attention you will know.

the 60GB is the emotion engine(CPU of the PS2) and the Graphic Synthesizer(GPU of the PS2) no problem there.

The 80GB doesn't have the emotion engine, but it DOES have a Graphic Syntheizer, that is why it is not full software emulation, because you need a Graphic Syntheizer to produce the PS2 graphic.

now the 40GB doesn't have both emotion engine and Graphic Syntheizer, so they don't have the hardware to produce the PS2 graphic, therefore, no BC. is it possible to have a fully software emulation? Sure, but if you think about it, if they can do it, they probably did it on the 80GB already. and they will probably say something that the 40GB will have BC later by doing a firmware update, but they are flatout saying they don't have BC.

Just imagine this, how funny will this be, like few months later, Sony come out and say the next model will bring back BC. People will be freaking piss off if they got the 40GB one. because the way I look at it, they have so many diff model that I am starting to get confuse.

20GB, 40GB, 60GB, 80GB, the sad thing is all of them are diff, just think about a person going to buy a ps3, they ask you which one you want, and all of them are diff not just in size, some have wifi, some have more usb port, some have BC, it is getting crazy. you can say that 360 has alot of model too, which is true, but at least, one thing stay the same is the console,except if you get a new one, you get HDMI port, but other than that, 360 is a 360. you know what you get, they just package diff and you get diff things from it. but the console stay the same.

Posted at 1:31PM on Oct 25th 2007 by Plat

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