Sony Shows Profit Drop, Despite Game Improvement

Author: by David Jenkins, Simon Carless

Officials from electronics giant and PlayStation creator Sony Corp. have published the company’s second quarter results for the three months ended September 30th. During this period, the company reported a net profit of 28.5 billion yen ($246 million), down 46 percent from a year ago. With notable losses for Sony's movie division due to disappointing theatrical revenues for movies such as Stealth, game division Sony Computer Entertainment (SCE) emerged as one of the company’s bright spots for the quarter, despite the enormous sums being spent on research & development for the PlayStation 3. The company has reported sales for SCE overall as increasing by 79.1 percent from the previous year. An operating income of ¥8.2 billion ($71.3m) compares well to a small operating loss in 2004. Strong sales of the PSP in particular were cited, with the company increasing its worldwide shipment target for the handheld for this current business year from 13 million to 14 million. PlayStation 2 console shipment forecasts were also increased marginally, from 13 million to 14 million, though no comment was made on a possible release date or price for Sony's next-gen console, the PlayStation 3. The company also updated total lifetime shipments (not sales) for the PlayStation 2, which now stands at 96 million (Japan: 21.70 million, North America: 38.78 million, Europe: 35.53 million). Neither Microsoft nor Nintendo have released new worldwide hardware figures for some time, but the installed user base for the Xbox is thought to be around 22 to 23 million, and the GameCube around 19 million. Sales and operating revenue over the entire company remained almost unchanged from 2004 at ¥1.703 trillion ($14.8bn), down 1 percent due to the establishment of Sony BMG Music Entertainment. The company has kept its full year estimate of an operating loss of ¥20 billion ($174.0m), which includes ¥140 billion ($1.22bn) in restructuring charges. In comments made after the results, CFO Nobuyuki Oneda has suggested losses in the company’s CRT television business, a key and still struggling part of Sony's overall make-up, have been offset to some degree by the successful launch of the new line of Bravia LCD televisions. "The numbers are still negative, but the loss is a lot less than we had originally thought," Oneda said. "Bravia and camcorders are doing very well but we are cautious about conditions ahead."