Are things finally looking up for the Japanese electronics giant? Sony, plagued by a slowing US economy and weakening US dollar, has struggled to meet its financial targets. However, things aren't all gloom and doom. A report by the Nikkei (via Reuters) shows that Sony's video game division is starting to turn around. The fiscal year, ending in March 2007, was a disastrous affair for the company, with an operating loss of 232 billion yen. The high cost of PS3 production and development bled money from the department.However, due to improving sales and smaller manufacturing costs, Sony's game division will see its operating loss shrink by 100 billion yen in its March 2008 fiscal year. While that means it will still have lost 132 billion yen, it's certainly a turnaround from the previous year. Overall profitability of Sony has improved thanks to the game division's smaller losses.
PlayStation, once the leading brand of video games, has been struggling since the launch of the PS3. In the latest console generation, Nintendo has been posting incredible profits (much to the happiness of investors). Microsoft's game division has historically posted loss after loss, but has finally started to become profitable in recent months.
Reader Comments (Page 1 of 1)
5-02-2008 @ 10:15AM
wonway01 said...
The weak US $ is killing them here. If you dont understand why just think about it. 40 gig retails for $399 which = whatever yen. As the $ weakens the same $399 = less and less yen. So what they get for each sale gets lower and lower even though the price here stays the same. This is why price cuts in the US arn't happenning as much as people think they would. To break even with what was being made 3 months ago they price would have to incerease.
The US economy just bites!
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5-02-2008 @ 10:25AM
Devin said...
Hmm....I heard just the opposite: that because the economy is weak they will almost be forced to price-cut since people are being hampered by high gas prices, food prices, etc....but of course that's what anyone would want......
5-02-2008 @ 10:15AM
Matt B said...
You can never tell if MS gaming division is really making a profit since it is included in the entertainment devices division which includes Zune and other things.
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5-02-2008 @ 10:38AM
frankym said...
At least they are in the black now and making money.
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5-02-2008 @ 10:41AM
Popfrogs said...
They never said that, they're just shrinking their losses. Sony has always been a smart gambler, playing the long game. When they say a 10 year plan for something, it's true. They have plenty of divisions to feed the gaming division until it starts turning a buck.
I fully expect Sony's game division to be profitable in 2 to 3 years (i.e. not posting losses).
5-02-2008 @ 10:58AM
mushmouth said...
What is 132 billion yen in dollars?
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5-02-2008 @ 11:21AM
Popfrogs said...
To convert yen to dollars, just drop the last 2 digits. 400 yen = $4, 230 billion = 2.3 billion. Give or take.
5-02-2008 @ 11:03AM
chester said...
1.2 billion give or take
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