Game FY Ending Mar 2006
Revenue: 8,193
Profit: 75
In this year’s financials, PS1 is gone, and PS3 is first mentioned.
PS2 Division (HW = 16.22 Million, SW = 223 Million)
Using similar figures, I allocated a profit of $608(*) Million – less than last year as PS2 SW sales declined.
PSP Division (HW = 14.06 Million, SW = 41.6 Million)
These are the key quotes from Sony:
Profit from PS2 and PSP businesses exceeded those in the previous fiscal year
Profit decrease due to PS3 R&D costs and preparation for PS3 launch
The first quote is about PS2 and PSP profits greater than last year.
In our analysis, PS2 + PSP profits equaled $356(*) million. Therefore, this FY should be more.
Now if we assume that PSP still lost $108(*) per console, then the whole division would lose money. Clearly then this is not the case. At about a loss of $23(*) per PSP console, the profit for both divisions will be LESS than last year – which would contradict Sony’s statements.
Therefore, the PSP loss should be between $0 to $23(*) per console. Without “launch” costs, I allocated a loss that is somewhere in the middle for the PSP of $5 (*) per console.
With this assumption, the profit for the PSP division is only $13(*) million, despite the fact of selling so much more software. Anything more than a $5(*) loss per PSP console would make the division unprofitable, thus also somewhat contradicting Sony’s statements *(see note). I interpreted the statement at PS2 and PSP individually are profitable. Another interpretation is listed on the notes after the summary.
The total profit for 2 divisions then equal $621(*) million.
However, the actual profit is only $75 million – therefore a loss of $546 million is now allocated to PS3 R&D.
Summary for FY Mar 2006:
($608 million PS2 + $13 million PSP less $546 million for PS3) = $75 million PROFIT = ACTUAL SONY REPORTED FIGURE.
Note: The interpretation of the statement regarding PSP and PS2 profits is the key. On the high end range of $23(*) loss per PSP console, then the total profit for PSP and PS2 will equal $368(*) million. In this interpretation, PS2 and PSP have greater profits as a whole than last year, not individually.
Then the PS3 loss would be $293(*) million.