SONY LOSSES, especially PS3 – New & Improved Analysis - End Mar 2008

[bumidan]

Game FY Ending Mar 2005 (Figures from Sony financials)

Revenue: 6,281 Million
Profit: 404 Million

PS1 Division (HW = 2.77 Million, SW = 10 Million)
While this division was on its last legs, I allocated an operating profit of $48(*) million.

PS2 Division (HW = 16.17 Million, SW = 252 Million)
The underlying assumption for SW net profit is $2(*) per unit. Given that, I allocated an operating profit of $666(*) million.

PSP Division (HW = 2.97 Million, SW = 5.70 Million)

Direct Quote from Sony for FY Mar 2005:
-Profit decreased due to PSP start up expenses, despite being partially offset by an increase in software sales

My take on the statement indicates that PSP hardware lost money, while software made some money. Therefore I also took a $2(*) per unit net profit for PSP software.

Therefore, I allocated a loss of $108 (*) per PSP console to reflect all costs including “launch costs” for the hardware.

With these PSP numbers, the operating LOSS for the PSP division is $310(*) million.

Summary for FY Mar 2005:
($48 million PS1 + $666 million PS2 - $310 million PSP) = $404 million PROFIT = ACTUAL SONY REPORTED FIGURE.

Other Direct Quote from Sony for FY Mar 2005 (for reference):
-Profit decreased due to decrease in hardware sales (meaning PS1 and PS2 sales)


This FY Mar 2005 was used to determine costs about the PSP division. In the following years, you can see that the assumptions about the PSP made some sense.

In the previous threads, people pointed out that the PSP lost money on hardware – and this actually confirms that.