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PlayStation 3 Price And Market Deterioration Drive Losses For Sony

By Ishaan . February 2, 2012 . 9:00am

PlayStation 3 Price And Market Deterioration Drive Losses For Sony

Sony reported their financial results for the third quarter of their ongoing fiscal year this week. As a whole, Sony incurred an operating loss of $1.1 billion, and a net loss of $2.1 billion.

 

Losses were attributed to factors such as the PlayStation 3 price-drop in August 2011, when Sony dropped the price of the system to $250, 250 euros and 25,000 yen.

 

On a positive note, the price drop helped the company sell 6.5 million PlayStation 3 systems in the third quarter.

 

Other factors cited included floods in Thailand, unfavourable exchange rates, deterioration of market conditions in developed countries, as well as a decrease in sales of LCD TVs.

 

This week, the company also announced that Kazuo Hirai has been appointed the new president and CEO of Sony, taking over from Sir Howard Stringer, who is now the Chairman of the company’s board of directors. Hirai was previously the CEO of Sony Computer Entertainment, the company’s consumer products division.


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  • http://twitter.com/DanijoEX DanijoEX

    I guess price drops do help in many cases. So many factors leading to losses…

    I wonder what Microsoft’s situation is like…

    I’m just saying…

    • malek86

      I think their shipment number was some 8.2 millions, and the company turned a big profit on the quarter (well, as usual).

      I do have some doubts about their future plans, especially how they intend to face the mobile revolution. But as of now, they seem to be in a better position than Sony.

    • James Beatty

      I think microsoft is did better last year than nintendo and Sony (i’m not sure though) They aren’t negatively effected by the strong yen in japan unlike sony and nintendo. 

      • Testsubject909

        Though that’s mainly because the 360 isn’t doing too well in Japan to begin with.

    • Testsubject909

      Microsoft’s repeatedly failing Xbox 360′s early on actually aided their sales as far as I could tell, as people had to repurchase their 360 and, well, gamers follow their games.

      To play a game, you need a working platform, a working console. And I know a few gamers here and there in my neighborhood from casual talk who’ve had to repurchase their 360′s at least once, even despite having a free replacement unit.

      Which is also a reason why I tend to not bite into Microsoft’s rather large number of sold consoles. It feels as though that number should be reduced by perhaps a third to properly reflect the actual number of consumers and then reduce that down further to better get an accurate view of active users of their console.

      • GGear0323

        you can’t lower their sold number. no matter what their reasons were, people bought those consoles which is money going to Microsoft. even if the number of active users is lower than the number of consoles sold, as long as they keep selling software at a nice rate, no one really cares. i bought a near launch 360 that lasted until late last year. but even before it died on me completely, i already wanted to upgrade to a slim model. 

        as an aside, my 360 didn’t really die on me per se. the disc drive was slowly giving out but it would work once in a while and i could still pay all my downloaded games but after the drive pissed me off 1 time too many, i decided to ‘punish’ my 360. suffice it to say, it retaliated by committing suicide. that gave me even more of a reason to get a slim, i transferred all my stuff over and now i have an even bigger hard drive and i got a $75 credit from Amazon and 2 free games. 

        • Testsubject909

          I’m not lowering the number of sold consoles or the profit they made.

          I’m lowering the statistics they rely on to go to developers and publishers to go “Look! Look! We’ve got so many consoles sold! Obviously these are all individually owned by completely different people meaning we have exactly that many people playing our console, believe it!”

          What I’m arguing is the install base being far smaller then they advertise.

          Also, it annoys me that adding a fan, thus modifying the 360, voids the warranty for replacement. I’ve heard some people were refused a replacement for removing certain stickers on the 360 with some rather draconian folks over at Microsoft working by the book and by very specific fine prints to state that the 360 was thus considered ‘altered’ and void. It’s a rare story but it’s out there.

          Annoys me too that the triple fan attachment that you can purchase for the fat 360 is actually going to cause your 360 more trouble since you need a fan with it’s own dedicated power source. If it draws power from the same power cable of the 360, what you’re doing is causing a larger drain which increases the heat which means that those extra fans are completely useless and actually causes more damage then prevent any. So yeah, a warning to the cautious gamers out there who want to purchase an older 360. Don’t, just buy a slim one.

          PS: I don’t own a slim one and I probably won’t. I’ll most likely buy one of the older elites mainly because I do want a Kinect for Dance Central, but I don’t want the Kinect to be powered directly by the 360 as that also causes heating problems for the 360. I much rather have Kinect possess it’s own power source and that way I can unpower it without unplugging it from the 360, nevermind all the possible spying that Microsoft can do to better study it’s market, though they promised they wouldn’t… But a promise doesn’t possess as much weight as actually written contractually obligated actions, or rather inaction in this case.

          Somehow i don’t see myself buying a Kinect anytime soon… And wow, I veered way off subject.

          • GGear0323

            but they are not really advertising this to the publishers or the developers. they don’t have to. not only do they have the same information as us, they probably have more and the fact is, the 360 leads in software sales as well. it was the best selling console for the year 2011 and probably makes more money through its downloadable service than the PS3 and Wii combined. i am not talking about charging for Live, though that makes them bank as well. i am talking about the profitability of XBLA and Indie titles. (i don’t know exact numbers but i do know it is more profitable than the other 2 consoles). 

            we can’t forget about failed PS3s either. the failure rate may not have been as high but it definitely wasn’t insignificant. i told you about my dead 360. i thought that would be fine since i could still play my PS3 and wanted to finish up FF13 anyway. well, my PS3 died on me a week and a half later (which means my 360 actually had a longer lifespan than my PS3 which i picked up a year after my 360). had to take it apart just to get my game out of it. i replaced my 360 first since that is where i spend most of my gaming time and i want to get a PS3 slim as well but have put it off since it isn’t a priority. i want to play FF13-2 on the PS3 so i will get a slim model in the near future though.

  • http://twitter.com/sheleigha Shel

    What about Black Friday sales? Selling the system with two brand new releases, for only $200?

    • http://www.genkaibreak.com Code

      Sales like that are controlled by stores themselves, any losses would be on the store end, not on Sony’s end owo’

  • http://bmgf.bulbagarden.net/members/55321.html FinalArcadia

    I really hope the Vita sales pick up for Sony. And the PS3 sales, too. I honestly think it has an even better game library than the PS2, and that’s saying something.

    • Luna Kazemaru

      Once The Vita starts getting more titles and a few deal’s It should pick up hopefully.

    • kevinposta

       I disagree on the library part. The PS2 has a ridiculous amount of titles of different genres. Many obscure ones too. The PS3 doesn’t have a bad library but the way I see it the PS2 will be hard to beat on that regard.

    • http://www.silconera.com/ Tsunami_13

      As I a PS3 gamer myself, I completely disagree, even putting quantity aside on of the PS2 here, the PS3 doesn’t even come close to even touching the variety the PS2 had.  And because of it, I have been very disappointed with this generation.  I think the console platforms are fine if your tastes fall well with the mainstream, otherwise well…
      This will definitely be last gen i’ll be keeping up with, more and more titles that  do catch my interest, are more then likely to be found on portables, and that is just not my cup of tea…(no offense to all portable gamers out there).  Its cool, though I’ll just keep playing treasured gems of the past.

      Good news is that things seem to be getting slightly better, their have been plenty of niche RPG’s announced this year for the PS3, really looking forward to Witch and the Hundred Cavalrymen/Soldiers!

    • http://bmgf.bulbagarden.net/members/55321.html FinalArcadia

      @Tsunami_13 & @google-6fa22bf4842684653e7895a4b1910f17:disqus 

      PS2 definitely had some amazing games. But I think I’m just biased toward the PS3, because it had more Sonic the Hedgehog games than the PS2 did. ^_^ Oh, and Valkyria Chronicles. SEGA really did a great job this generation.

      • http://www.silconera.com/ Tsunami_13

        @FinalArcadia:disqus 

        I respect your opinion and agree with you about Sega stepping up there game this gen. I enjoyed VC, and I can’t put Vanquish down, I think i’m on like my 13th playthrough on the latter.Now if we can only get a Shinobi for the home consoles…

  • Rupedgo

    I really hope Kaz make some changes inside the company. They used to be one of the best manufacturers on the market, but their inconsistent company politics and their overpriced products (I know, I know, but apple became a status brand, nothing to do about it) are making people to care less and less for whatever they come up with. 
    Kaz always showed a desire to unify the brand’s products and think that’s the right way to go.
    Also, lower the prices on your tv’s! Consumer nowadays are no longer stupid.

  • Nemesis_Dawn

    It’s a shame. I think the PS3 has the best library of THIS generation, by a long shot (it doesn’t come close to the PS2, though).

  • http://www.facebook.com/people/Brandon-Coley/588322262 Brandon Coley

    Im not so sure isn’t that like a trillion in revenue?

  • Exand

    Isn’t the headline a little misleading? Makes it sound like losses from the PS3 is the main factor in Sony’s huge losses.

    Every other article I’ve read on Sony’s financial problems pins a large chunk of blame on their severely under performing TV division, not the video game division…

    Granted I’m sure we can add the Vita to the long list of questionable electronic products Sony has released this past decade which will add to their continued losses.

  • MrSirFeatherFang

    Because of the flooding in Thailand I’m gonna wait for a long time before I can buy like a hard drive for cheap again. Though I can wait…

  • http://twitter.com/Xuiz enorka miho

    Maybe its just their strong yen… Or With them not having enough of indie games.. Or people love ipads or iphone more than anything else..  Perhaps, their subscription name is not fancy enough like Microsoft where they manage to make so many people hovering over it.. Xbox live.. GOLD.. Yea, that pretty much owns everything…I was not affected by the name still I think it plays a role to some level.. But I can tell you, Microsoft knows the western heart very well… (while Nintendo knows the parent’s heart)… Together with the fact that their game library are way~  cheaper… 

    Oh not to forget, the Sony hacking issue…Speaking of that… I can’t believe it almost a year after the incident.. Wow..

    I guess Kaz Hirai has got allot to catch up though.. First is to change their online server.. I think if they could up their support either for free or through the PS plus sub, maybe he can convince more people to join.. Of course in tht case people could still choose to go online for free though but with normal speed.. Another is he should start having adverts that convince the parents.. Maybe not only in the TV but also the retail shop.. As for their TV.. Hmm… I’d rather get samsung these days.. Anyway, Too bad china does not allow consoles to be sold officially in their country.. Else, Sony’s sale is going to boom though.. They probably could have won the console sale.. Seeing that Asians love the brand more when it comes to gaming… XD

    • Raiu

      I think it’s mostly the strong yen..

      As an offline kind of person, their online services is a win in my book.. Who’s gonna complain that its free even though the speed is not on par with xbox live… I agree with the TV ads and I also can’t agrue your choice of TV… Most of the Asian friends I know own a PS3 or prefer one… If you’re referring to me, I grew up with Playstation and still to this day having trouble holding 360′s controller… A friend of mine easily beat me in a match because of it haha…

  • Stizzy Straw Hat

    Dang, never thought the floods in Thailand would have an impact on a video game console. Crazy!

    โชคดีนะ!

  • mat kuria

    Everyone is posting losses these days, the market is all fucked up to be honest. I wish Sony a quick and healthy recovery. I’m sure with the vita starting to sell here in NA and EU shortly will help in some form.

    • Testsubject909

      I’ma buying one and jumping straight into some of the much anticipated titles I’ve been awaiting.

  • BadenBadenPrinny

    Start chopping, Kaz. It may be the only way. Also, if the board get in your way; be like Kamina and kick reason to the curb

  • Göran Isacson

    First Nintendo and now Sony… makes me wish I had any kind of education in the field of economics so I could participate in the speculations as to why. Nintendo I can see slumping in sales since, really, how many more Wiis CAN they sell these days? And Sony… well, I’d guess that the hacker scandal and it’s reportedly ABYSMAL internal communications and conflicts help there.

  • PrinceHeir

    hopefully new IP’s for Vita :P

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