Sony reports $1 billion annual loss
The global recession has hit Sony hard--the company on Thursday reported its first annual loss in 14 years.
Sony lost 165 billion yen ($1.72 billion) in the quarter that ended March 31, the fourth quarter of its fiscal year, compared with net income of 29 billion yen in the year-ago period. Revenue for the three-month period was 1.5 trillion yen ($15.5 billion), a drop of 22 percent from a year earlier.
Adding that to the previous three quarters of fiscal 2008, the company saw an annual loss of 98.9 billion yen ($1 billion). The loss was a dramatic reversal from the preceding fiscal year, when Sony earned 369.4 billion yen. The company blamed the decline on lower sales, increased competition, the stronger value of the yen, and the sluggish Japanese stock market. Annual revenue dropped 13 percent to 7.73 trillion yen ($78.8 billion).
The downturn is forcing Sony to cut costs and staff. The company plans to shut down three manufacturing plants in Japan, reducing the number of worldwide plants from 57 to 49. Sony says it is on track to eliminate 8,000 jobs by year's end, mostly through forced retirement. The company now hopes to reduce costs by 300 billion yen for the year ahead
Despite these steps, Sony said it doesn't expect a recovery anytime soon and is projecting a 120 billion yen ($1.2 billion) loss for the fiscal year through March 2010.
Since taking over as Sony CEO, Howard Stringer has been on the move to cut costs, reorganize, and shake up the company's status quo.
Sony's business segments each saw a sales drop. In the gaming arena, revenue from the various PlayStation game consoles sunk 18 percent in the face of competition from the Nintendo Wii and DS and Microsoft's Xbox 360.
Revenue in the electronics business declined 17 percent. Sales were actually up for Sony's Bravia HDTVs, but down for camcorders, digital cameras, and PCs.
On the entertainment side, sales dropped 16.4 percent. Motion picture and TV revenues grew but were offset by a slide in the home video market.
Lance Whitney wears a few different technology hats--journalist, Web developer, and software trainer. He's a contributing editor for Microsoft TechNet Magazine and writes for other computer publications and Web sites. You can follow Lance on Twitter at @lancewhit. Lance is a member of the CNET Blog Network, and he is not an employee of CNET. 
Let me see how Sony could turn themselves around...
Cut prices to PS3, Blu-Ray DVD's, and TV's!
But maybe they are counting on the PS3 too much, they need to sell more of their other electronics products too.
How do you figure? I bought my PS3 BECAUSE of the awesome games for it. Warhawk, for example, is probably the best game I've ever played on any platform in my 25+ years of gaming. There is Killzone2, GranTurismo, LittleBigPlanet, Burnout Paradise, the Uncharted series.... and that's just scratching the surface. Anyone who says PS3 doesn't have good games either hasn't played or is just blindly going by some stats (ie: PS3 has 5000 titles, my console has 7000). Pick the platform with the best games, not the most.
Second, use google. Did you know that each month Sony game division has more hardware sales than Microsoft? Yep the PS2 is still selling something like 130k units a month, plus PSP sales and PS3 sales. Microsoft is in LAST place each month. There were STUPID to kill off the first Xbox, especially considering all of the problems that the 360 has had. From NPD....
February, 2009
Wii - 753,000
360 - 391,000
PS3 - 276,000
PS2 - 131,000
NDS - 588,000
PSP - 199,000
So I am seeing 606,000 devices for Sony, 391,000 for Microsoft. Its hard math I know.
Sonly looses 1 billion annual loss for the year. Ok so what did MS report? A loss as well. MS wrote off 1billion just for 360 problems and counting now with the new E74 problem. Microsofts entertainment division (xbox, zune) has NEVER made a profit.
PS3 has no content??? Sersiously ***? Every major 3rd party title is on the PS3 and probably PS2. Call of Duty was the sales king in 2008 and it was on the PS3. The PS3 has exclusives just like the 360 and wii, MSG4, warhawk, killzone, god of war, little big planet Socom3d, Drake Uncharted....etc.
Xbox fangirls need to keep hugging their RROD conles and wait for the day the PS3 has a price drop so they can start gaming on a real console and not a rickety leaf blower.
Incidently, Call of Duty is multi platform, not a PS3 exclusive. Games like MSG4, warhawk, killzone, etc. may be exclusive to the PS3 but they are certainly not compelling enough to affect Sony?s profits let alone convince more people to buy a PS3. (Halo 3 alone outsold all those PS3 exclusives) In the video game market most profits are made in software, not hardware. The fact that Sony is $1 Billion in the hole proves that.
On the other hand, The Microsoft Entertainment Division which you conveniently lied about and said was not profitable, has in fact been profitable since last year. (And those facts are easy to find if you'd bother to remove your head from your butt)
So do you have a link that shows that the Xbox or MS entertainment division is in the black, after year of burning money?
A quick search gave me this, which while better is still a loss.
http://www.edge-online.com/news/ms-financials-show-xbox-div-profit
Profit to me is taking in more money than you have spent so far. So if they spent 10 billion on the development, manufacturing and support of the xbox and Zune but only have made 9 billion in sales they are still in the red.
http://www.joystiq.com/2009/04/23/microsoft-q309-xbox-division-loses-31-million-360-sales-up-30/ lost 31mil in Q3 09.
And I found the April 2009 numbers posted just today. Everyone took a beating last month.
DS: 1.04M477K (+85%)
Wii: 340K261K (-43%)
Xbox 360: 175K155K (-47%)
PS2: 172K60K (+87%)
PS3: 127K91K (-42%)
PSP: 116K52K (-31%)
Sony 415,000 units, Microsoft 175,000 units. Oh that is right Sony does not count that PS2 money for some reason, according to you.
waiting for your links.....
As for the PS3, it is a fine piece of hardware but the game selection just isn't what mainstream US gamers want. We want lots of quality shooters and the occasional WRPG. That is why the 360 is killing the Wii and PS3 in software sales in the USA.
As for console war, It is an interesting reversal for Sony, beta video tape in the 80's was superioir to VHS but lost due to lack of contents, this time it''s sony's tunr, The PS3 might be a great hardware, but no content for it....
Umm... Killzone2 anyone? No, the problem is simply one of perception because too many journalists just like to advertise some platforms have more games, not better ones.... and the average person reading the articles has no clue, so we get stories of PS3 having no good games. Anyone who has actually played on a PS3 knows better. The other problem is kiddies with too much of mommie and daddie's cash itching to buy the latest lamo game port some company cranked out by putting new graphics on the same tired game engine... and then just marketing the heck out of it. They play it for a week, then go on to the next. With the economy going downhill... my guess is the days are numbered for such studios. I hope they all go under so we can get rid of a number of big name, cr*p titles that are out there. Then some of the smaller creative studios can make some great new games.
whats a root kit? lol
im sorry that you use a crap operating system that enable malware, spyware and rootkits been installed without user confirmation so easy.
i and all linux users never get infected with the CDs, neither my friends with apples macs.
you can blame the criminal for breaking in your home, but if you let the door open and all the WINDOWS open, you are mostly welcome the criminals.
"That is why the 360 is killing the Wii and PS3 in software sales in the USA."
http://www.shacknews.com/onearticle.x/58524
http://news.teamxbox.com/xbox/19462/Xbox-360-Sales-Up-30-Percent-in-March-Quarter/
"Software sales for both systems were up from the previous year, with the Wii selling 204 million software units and the DS reaching sales figures of 197 million."
Meanwhile the Xbox360 has sold 250 million games *Lifetime* vs 204 million for the Wii in 2008 alone. It is difficult to imagine how they are outselling the Wii as of March (things have shifted sharply in Microsoft's direction since then, however) so they are definitely not "killing" the Wii. Personally I think both consoles are excellent. I am in college and I always have a game that fits any kind of boredom.
The Playstation3 is shiny and nice, but I built a PC that totally annihilates the PS3 and cost LESS than the PS3. All I had to do was use Newegg and skimp on the "bruuray".
Sorry, no you didn't. Post a parts list and we'll tell you why you are delusional.
It's funny you mention that... Could you now mention how many games have been brought back for fixing because of technical difficulties the 360 has?
Compare that to the playstion...
Motherboard: Abit P35-E $40 (newegg liquidation sale)
Case and 450W power unit: $50 (probably skimped here)
Graphics Card: MSI 9800 GT OC 512MB $110 AR
Memory: 2GB (x2 1GB) Corsair $20
Optical Media: MadDog DVD-R $20
HDD: Samsung Spinpoint F 500GB 16mb cache $60
OS: XP, upgraded to Windows 7 RC (freebie) $0
TOTAL PRICE after 3 rebates & all applicable shipping & ZERO TAX Aug 2008
$450 (current price ~80%)
PLAYSTATION 3 PRICE at time of purchase Aug 2008
$499 + tax and/or shipping. Currently down to $399
If you want to sit there and tell me that these specs with Windows 7 don't absolutely shred the PS3, you need to go back to your Sony altar. Oh, and to add insult to the PS3 owners' injury, my PC can play 90% of PS2 and PS1 games at full speed thanks to PCSX2. Sony decided that feature was "unnecessary" for their adoring customers.
We also have a Wii and love that format. I did borrow an xbox360 but gave that back as it was only good for photos in my world. If your whole life is in games that'll be different but is of little interest to me. I love Sony, and many others. Quality does cost extra, as everyone knows.
Yes, windows can stream media. I believe the W7 RC comes with media center, but VLC is free and cross-platform for PCs, and plays a load more formats that a PS3. Besides, with a HDD on your PC, you don't even need to stream to listen to music. Just plug it in directly to a speaker set or sound system. In terms of photo quality, a PC can view your pictures at much higher resolution on a decent monitor than a PS3 can on any television that only goes up to 1080 scan lines. If you bought a PS3 for its media rather than its games, you completely missed the point of a general-purpose PC, which can be far cheaper than a gaming rig (which, as zacharychaos pointed out, can also be cheaper than a PS3 if you don't mind spending more than 15 minutes looking for what to buy).
Furthermore, you can get a decent entry-level gaming laptop for $900-$1500. Not only does it have the power of a $500 desktop, but it can be moved around easily and includes a monitor.
"So your box will stream my hi-def video, play all my audio library streamed via flac/dts/mp3, stream my photo collection, play quality games that don't involve mega buck graphic cards, and function as a home entertainment hub will it? DREAM ON...."
I must be dreaming after all, this sounds exactly like a PC fanboy's argument against consoles. I didn't realize a $110 Nvidia 9800GT was a "Mega Buck" graphics card. Now, granted, if you are too lazy and/or dense and you WANT to shell out a +$600 markup to Dell for a gaming PC, they would be more than happy to rip you off.
Thought so... OK, a few problems. First, you must be the worlds best shopper. I can't prove you didn't get some special deals on those parts at that time or that rebates didn't exist... but the current prices certainly are not 80% of what you paid. Since you can't build a system like this at today's prices, it seems hard to believe you did it going on a year ago. Second, the OS isn't free... so you might want to add that in... It is included with a PS3. Third, you can buy (and could at that time) a PS3 for $399 (or sometimes less if you want to talk sales) and could at that time as well. Fourth, I paid $499 for a PS3 with PS2 compatibility... and I have hardly used it, if you're having fun playing those titles.. good for you.
And lastly... and I'm going to say this in caps so it sinks in.... YOUR SYSTEM IS NOT FASTER THAN A PS3. Your system is more in line with an Xbox 360 in processing power... but you're missing a few cores there to match a PS3. Your video on paper is also close to PS3, but because of the way the PS3 is integrated, it probably isn't a real-world match either.
So, if your cheapie system doesn't break (you'd have had to spend more on the order of $600-$800 to build it with descent parts... even from newegg)... it doesn't match the PS3. I think you are the one who needs to keep dreaming.
More likely though is that the US will continue to be blasted and pilloried as it is to "blame" for the global economic crisis.
Just a thought--the US indeed brought the world economy down through profligate credit expansion vis-a-vis mortgage lending. However, it is China that is the US's enabler as the Chinese sovereign wealth fund has (or used to have) more than a trillion dollars in US currency to invest in American enterprise. Too bad the Chinese people don't get a share of that because if they were able to spend at the personal level, their consumption would go up and everyone would do better owing to increased consumer goods demand.
"Sony says it is on track to eliminate 8,000 jobs by year's end, mostly through forced retirement."
No worries, the Salarymen will keep coming to work even if they no longer have a job.
They all need to up and change their business models before they find out that the billion $ losses become a pattern not an exception.
blu-ray will die a quick death, and this time next year we will be talking about Solid State Drives and memory sticks to watch movies.
im happy all linux users, me included, dont have to worry about that.
Linux would have had a much better chance if people like you kept your mouths shut.
The reference to BluRay being DOA isn't 100% accurate. Although it's true the modern end user is more computer saavy than ever before and has quickly adopted direct downloads to HDD, there is still a very large market for clients who still prefer an off the shelf, grab and go solution. That said, the price is a HUGE issue. I own a Philips Gen.2 BluRay and it's fantastic ... for the 4 movies I own. I have not bought any new DVDs but am holding off on BluRay (due to cost) for only premium content, such as the God Father series, Underworld Trilogy (wife) and maybe a couple more 3D movies for the nieces / nephews to enjoy.
If the BluRay prices were in the $19.99 range for new releases, I'd be snatching them up - but I can't justify spending any more than that - especially for already existing DVD titles with virtually the SAME content. Heck, even on DVD we were promised alternate camera angles and such ... never happened. I have an upconverter Philips DVD player and my existing DVDs look great. Ironically, if BluRay discs were in the $9.99 to $14.99 range then they'd probably be flying off the shelf ... considering the fact it's a slightly thicker plastic and the mini-booklets are a thing of the past ... what's the problem? Better to sell 100 BluRays at $10 each - versus - 10 or 20 at $30 each.
Besides the same studios are hurting themselves by often bundling a DIGITAL DOWNLOAD with the DVD, instead give me a $25 bundle: BluRay, DVD, DIGITAL DOWNLOAD. Sadly these bundles are often the Disney / Pixar films and you can't really judge the superior video off of an animation.
Another post pointed out the incredulous reaction to XBOX 360 sales - versus - Nintendo Wii. Keep in mind that the 'software' sales totals for the Wii includes the bundled games. True, XBOX has a few bundled options too but not nearly the same volume as Nintendo. I never bought another game for my Wii and at least three friends bought Wii Fitness and nothing else. A fourth friend bought Tiger Woods and played it 3 times. In nearly all of our cases, the Wii gathers dust and in my case, I re-gifted the Wii on 'LOAN' to my nieces - they do use it with friends but their allotted gaming time is split between the Wii, 360, PC (frickin Sims and Spore), and hand-held.
Sony, Philips, GE, Microsoft, Nintendo, all the big consumer electronic and entertainment product divisions need to understand that we want bang for our buck. This economic downturn has woken up most of the public into realizing they need to watch their large and small expenses. A great deal of us are facing permanently reduced income, possible layoff, or worse ... if you want what's left of our disposable income ... cut us a deal and sell us on the 'family entertainment package (extra controllers, 2 or 3 titles, 1 movie).' In fact, I'd put together mega-bundles - AND - offer either direct or indirect financing. Everyone winces at a price tag in the hundreds but turn that into a monthly payment of $15 or $20 for 2 years and suddenly that system looks very affordable.
Just my two cents ...
With time (say, five years) blu ray will be inexpensive, and they will have probably another five years to sell disks until the majority of the market has moved to direct downloads.
I'm not disputing the notion that Blu-Ray isn't going anywhere, but I contend that it's "speed" is relative. It's going alright, just not as fast as some of the raw statistics might make it seem.
and the Company since the 1960's, when US Service people returned from Vietnam with their
reel to reel tape recorders and other products. Sony was absolutely driven, at the time, to outstanding
quality and innovation.
While they still are capable of innovation & quality at times, they've gotten fat & complacent. Also, I
feel they're become a fast buck operator. I've had a couple of Sony products fail prematurely, and they
basically told me to "get lost" when I called them. A company can do that for awhile, but that attitude
(plus an unexpected world wide financial crises) will come back to bite you. The ol' "what goes around comes around" syndrome, or karma. GM had 60% of the car market when I was a kid.........
Et tu, Sony? Hasta la vista, Sony.
On market-share, you are right to some extent... but the PS3 is no where near being low enough in market-share to be hurt by it. Heck, even Apple at roughly 10% market share has plenty to have good software developed for it. Sony is behind (in market share), but not nearly to that extent. There is PLENTY of great games for it, and they are coming out at an ever increasing pace. I think the economic downturn will actually HELP sony in this regard. Kids aren't going to have as much cash to buy the latest game to play for a week (by the big studios who rely on kiddies and marketing) and then dump. They will have to think about their purchases and buy good games... which means independent studios, and probably exclusive titles. In that arena, PS3, IMO, easily wins!
Where are these cool tiny audio players now?
Sony refuses to act like SONY in the USA and keeps all the cool technology in Japan.
Meanwhile Apple has quarterly Record PROFIT, NO DEBT & 24 BILLION in the bank.
who knew?
Even worse, they came up with proprietary designs like their SD cards. That is a no no and I advise anyone to keep away from proprietary crap and go for open designs and standards.
Now that they are 1 billion down maybe Sony understands the meaning of standards because customers want stuff that is compatible.
Any company that mocks standards will in turn be mocked.
Yea, the rootkit thing was pretty dumb... but I'm not sure what that has to do with video gaming.... AND if you compare that to all the illegal things M$ has done over the years, it makes Sony look angelic.
Second: adding old consoles to compare market share is just lame. It is not realistic nor sustainable. They kept selling the PS2 precisely because the PS3 is not selling well, not the other way around.
Maybe Sony got to comfortable being the king of the mountain for so many years.
Please provide links that the Xbox has made money since it was born. As in more money made vs spent on the Xbox brand.
- by crusadex May 14, 2009 9:17 PM PDT
- Meh,It's the price.The PS3 is a fine console but the 360 gives you the most back for the buck.
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- by SteveW928 May 18, 2009 11:15 AM PDT
- I'm not so sure I agree. First, if the Xbox doesn't have the games you want... then the lower price really isn't much of a deal (same for Wii). Second, when you add up all the things you need to add to the xbox to make it similar to a PS3, the prices aren't so much different any longer. Third, the Xbox is EXTREMELY proprietary with any kind of device add-ons... most things just work when plugged into PS3 (hard drives, headsets, cameras, etc.). Fourth, does it really matter if M$ sells 10 or 20% more consoles? As long as Sony sells enough to have a compelling market and has great games, the numbers are fairly irrelevant. Sure, it would be nice if they could drop the price, but at this point, they probably can't. People who do their research will find the PS3 to be worth it (though I'd gladly buy another if the price came down... just to use as a server to host games or run folding@home on).
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Showing 1 of 2 pages (63 Comments)And beats the Wii hands down for actual games worth playing let alone buying.
Sure sony will probably come out on top at some point.But i suspect that when Sony takes the lead MS will release a new console and yet again put Sony in the posistion of playing catchup.
If Sony stops blaming and belittleing it's cometition and starts dropping prices they will win.I do not see them doing this though.At least in time anyway.