Sony scales back expectations for Vita after weak sales performanc

[Chark]

RolStoppable said:

Soleron said:

Simple example: Suppose all those extra expenses are, as you say, fixed. Say $150 to employ all those people.

Last year product made $200 profit on $400 revenue.
This year  product  made $100 profit on $200 revenue. (Same profit per unit)

Last year overall: $200 - $150 = $50 profit
This year overall: $100 - $150 = $50 loss

Same number of people employed in other departments, same product profit, less unit sales can turn profit to loss. I think that's what happened to Sony, lower hardware and software unit sales, same profit margin and same other expenses.

If Sony can't increase Vita sales, they need to cut marketing and other things to match the new, smaller size of their actual business.

We would need to look at how much Sony's quarterly hardware and software sales were down year over year in calendar year 2012. Probably at a similar rate, but January to March saw a significantly bigger loss. That's when more PSVs were shipped overseas and the loss on each unit is recorded when Sony sells it to retailers. Of course, the same quarter had the PSV launch marketing campaign which is a bit more costly than the regular ongoing marketing of PlayStation products, but this alone probably does not account for the bigger loss.

The quarter we are looking at now is April through July. Did their gaming division post losses last quarter? During the Vita WW launch? Is it significantly different than this quarter?