Tokyo (Japan) – The Playstation 3 pulled down Sony’s profits during the company’s fiscal year 2007, ended March 31, 2007. The game console accumulated a loss of nearly $2 billion, while the core businesses of Sony showed solid performances and prevented a decline in net profits.
On the surface, Sony’s fiscal 2007 appears to have been a rather uneventful year: Overall sales were up 10% to $64.1 billion and net earnings improved by 2.2% to $1.1 billion. However, on a closer look, the individual business segments showed either sharp increases in sales and profitability – or dramatic declines.
On the upside, accelerating sales of the Bravia TV line boosted the profit of the firm’s electronics business by more than 2100% to $1.3 billion; Sony’s movies, which included titles such as the DaVinci Code and Spider-Man 3, increased the segments operating income by 55.7% to $362 million; other ventures, including the music business in Japan gained 57.9% and came in at a profit of $275 million.
Next to financial services, which recorded a 55.3% drop in profitability to $713 million, it was the Playstation 3 that weighed on Sony’s fiscal 2007 results. Sony’s game unit turned in revenues of $8.6 billion and a loss of $1.97 billion, mainly due to the high production costs of the Playstation 3. According to Sony, the “deterioration” of profits was “primarily the result of the loss arising from the sale of the PS3 at strategic price points lower than its production cost (…) as well as charges in association with preparation for the launch of the PS3 platform.”
Sony said that 5.5 million PS3 were sold until March 31, 2007. PS2 sales during FY2007 decreased by 2.02 million units to 14.2 million, PSP sales declined by 5.7 million units to 8.36 million. Lower PS2 sales also resulted in a decrease of software sales: Sony said that 193 million game units were sold in FY2007, down 30 million from FY2006. PSP software sales jumped by 12.5 million units to 54.1 million copies. PS3 software sales came in at 13.2 million units.
On the surface, Sony’s fiscal 2007 appears to have been a rather uneventful year: Overall sales were up 10% to $64.1 billion and net earnings improved by 2.2% to $1.1 billion. However, on a closer look, the individual business segments showed either sharp increases in sales and profitability – or dramatic declines.
On the upside, accelerating sales of the Bravia TV line boosted the profit of the firm’s electronics business by more than 2100% to $1.3 billion; Sony’s movies, which included titles such as the DaVinci Code and Spider-Man 3, increased the segments operating income by 55.7% to $362 million; other ventures, including the music business in Japan gained 57.9% and came in at a profit of $275 million.
Next to financial services, which recorded a 55.3% drop in profitability to $713 million, it was the Playstation 3 that weighed on Sony’s fiscal 2007 results. Sony’s game unit turned in revenues of $8.6 billion and a loss of $1.97 billion, mainly due to the high production costs of the Playstation 3. According to Sony, the “deterioration” of profits was “primarily the result of the loss arising from the sale of the PS3 at strategic price points lower than its production cost (…) as well as charges in association with preparation for the launch of the PS3 platform.”
Sony said that 5.5 million PS3 were sold until March 31, 2007. PS2 sales during FY2007 decreased by 2.02 million units to 14.2 million, PSP sales declined by 5.7 million units to 8.36 million. Lower PS2 sales also resulted in a decrease of software sales: Sony said that 193 million game units were sold in FY2007, down 30 million from FY2006. PSP software sales jumped by 12.5 million units to 54.1 million copies. PS3 software sales came in at 13.2 million units.