Xbox 360 Vs. Playstation 3 2012 - *February* Update

[Alby_da_Wolf]

kowenicki said:

yo_john117 said:

Alby_da_Wolf said:

Just for precision, from this source: http://www.sony.net/SonyInfo/IR/financial/fr/11q2_sony.pdf

Page 3 and 4:

Sales decreased 12.3% year-on-year (a 7% decrease on a local currency basis) to 779.7 billion yen (10,126 million
U.S. dollars). Sales to outside customers decreased 12.4% year-on-year. This was primarily due to a decrease in
LCD television sales, reflecting price declines due mainly to deterioration in market conditions in the U.S. and
Europe and unfavorable foreign exchange rates, lower PC sales reflecting price competition, a decline in sales of
the game business, reflecting a strategic price reduction of PlayStation®3 hardware in advance of the year-end
holiday season, as well as a decrease in sales of compact digital cameras resulting from lower unit sales due to a
slowdown in market growth and unfavorable foreign exchange rates.

Operating loss of 34.6 billion yen (449 million U.S. dollars) was recorded compared to income of 1.0 billion yen
in the same quarter of the previous fiscal year. This was primarily due to deterioration in the cost of sales ratio
and a decrease in gross profit due to lower sales, partially offset by a decrease in restructuring charges. Categories
contributing to the deterioration in operating results (excluding restructuring charges) include LCD televisions,
reflecting a decline in unit selling prices that exceeded cost and expense reductions, the game business and PCs,
reflecting lower sales as noted above. Operating loss included additional LCD panel related expenses resulting
from low capacity utilization of S-LCD as well as the above-noted asset impairment of 8.6 billion yen (112 million
U.S. dollars) associated with LCD television assets.

Page 20 of the PDF / Page F-8 of the document:

Wow I wasn't aware that Sony made almost as much revenue on their gaming division as their other big divisions. That's quite impressive really.

There is no such thing as a gaming division at Sony.

You are misreading.... this is all ONE division ( Consumer products and services) and as you correctly identify is only revenue.  CPS has the highest revenue by division but the biggest losses by far.

Sony makes more profit from selling insurance than anything else by far. Second is movies and then a long way back is Music.  CPS is last and makes big losses these days.

 

 

Yep, actually Sony doesn't even call them "divisions", but "business segments" in its financial statement, and the largest ones like CPS and PDS are broken down into "product categories", while for the smaller ones business segment and product category coincide. Games is a product category of the CPS business segment. Anyway, the issue here was what caused losses, and Sony stated it clearly, Games had reduced revenue (and most probably profits even if it isn't specified), while LCD and other things caused losses. The statement also is quite clear, in the note I quoted, about some other things: the whole business suffered from unfavourable exchange rates, but while Sony considers PS3 price cut a strategic move, it admits TVs were forced by both competition and bad market conditions in Europe and USA to have their prices cut below profitability, and exchange rates just made things even worse. And I'd say Sony really asked for almost all the troubles its TV business is suffering, it arrived last in the LCD market after sticking too long to its old Trinitron CRTs, and it constantly looks like it's the last to understand when crises arrive and people get willing to spend less than before on luxury TVs and the likes. Actually, Samsung too looked like understanding things a little bit late, when it tried to sell big 3D TVs at more than 5000 Euros just at the beginning of the last crisis, but I guess not having to deal with the exchange rate of the Yen with Euro and Dollar (and also cheaper labour in its homeland, as both Samsung and Sony still have consistent parts of their production not outsourced) generally helped Korean companies compared to Japanese ones.