Warning:  This thread has a lot of material AND there are many posts.  Each post is a fiscal year.

PLEASE READ CAREFULLY.   This is a fairly in-depth analysis.  All assumed figures will be indicated with a (*).  All other numbers are taken directly from Sony publicly reported financial statements.

These projections use the following material posted in another thread.  This is a follow up on the work done previously.

PS3 Hardware

Sony stated that they will ship/sell 10 million consoles this fiscal year.  Last FY ending Mar 2008, they have already shipped 9.24 million consoles.  I am fairly optimistic that they will beat those numbers.

Therefore for my projections, I will use a figure of 11(*) million consoles.

From the previous threads, the loss per console for the PS3 for FY ending Mar 2008 was $210.50(*) .  This was a $270(*) per unit cost reduction from the previous FY.

With more cost reductions, I estimate that another $150(*) of cost reductions and efficiencies will be shaved off from the hardware.  I will be optimistic and use an average for the whole year of a NET LOSS of $60(*) per console. 

PS3 Hardware = 11(*) million x ($60)(*) loss = LOSS OF $660(*) million dollars

PS3 Software

To project PS3 software, we have to take into account the annual attach rate of software to hardware.

We do this, as you guys all know, by taking the total number of consoles and dividing it from the total software sold.

The numbers for the past FY’s are as follows:

FY End Mar 2007

PS3 Software of 13.2 million divided by PS3 hardware of 5.5 million = 2.4 annual attach ratio

FY End Mar 2008

PS3 Software of 54.1 million divided by total PS3 hardware of 5.5 million + 9.24 million = 3.93 annual attach rate

Since the PS3 is gaining momentum, selling more hardware and software, I project a 4.12(*) annual attach ratio, which is a 5% increase from the previous annual attach ratio of 3.93

The total hardware at the end of FY ending Mar 2009 will be 5.5+9.24+11(*) = 25.74(*)

With an annual attach ratio of 4.12(*), the total software units will then equal to 106.0(*) million units

Previously we used a $2(*) NET profit for PS3 software.  However, due to increased online distribution and possibly higher licensing fees for PS3 software, I am optimistically increasing the NET profit for PS3 software by 50% and using $3(*) NET profit.

Therefore:

PS3 software of 106.0(*) million x $3(*) NET profit = $318(*) million

SUMMARY OF PROJECTED INCOME FOR PS3 :

Hardware = ($660)(*) million LOSS

Software = $318(*) million

TOTAL = ($342)(*) million LOSS

PSP Hardware

PSP hardware seems to be doing fairly well this year as well.  Though for the past 3 years, hardware sales are fairly volatile.

FY End Mar 2005 = 2.97 million (launch , not full year)

FY End Mar 2006 = 14.06 million

FY End Mar 2007 = 8.36 million

FY End Mar 2008 = 13.89 million

For the FY ending Mar 2009, I predict an increase of 15% in hardware sales from the previous year which would equal 15.97(*) million

With cost reductions and a possible? new model coming out, I am increasing the net profit per PSP from $2(*) to $8(*)

PSP Hardware = 15.97(*) x $8(*) = $128(*) million

PSP Software

PSP Software is more difficult to predict based on past history.  Annual attach rates are all over the place.

FY End Mar 2005 = 5.7 million SW divided by 2.97 million total PSPs = 1.92 annual attach rate

FY end Mar 2006 = 41.6 million SW divided by 2.97+14.06 PSPs = 2.44 annual attach rate

FY End Mar 2007 = 54.1 million SW divided by 2.97+14.06+8.36 = 2.13 annual attach rate

FY End Mar 2008 = 55.5 million SW divided by 39.28 million total PSPs = annual 1.41 attach rate

With this data, software sales for PSP are not really increasing at all, given the increasing size of the install base.

Therefore to be conservative, I am projecting the same 1.41 software annual attach rate for FY End Mar 2009.  With this attach rate, the software unit sales will be 77.91(*) million – which already represents a huge 40% INCREASE in unit software sales compared to the previous FY.

This is already quite optimistic, and may represent a major FACTOR and margin of error with this projection.

Just to compare, if I use a 2.0 annual attach rate, the software unit sales will be 110.5(*) million units – double the previous numbers.  This to me, was not completely realistic at all.

Therefore:

PSP Software of 77.91(*) million x $2(*) NET profit = $156(*) million

SUMMARY OF PROJECTED INCOME FOR PSP:

Hardware = $128(*) million

Software = $156(*) million

TOTAL =$284(*) million PROFIT

PS2 Hardware

PS2 hardware has been declining in the past few years.

FY ending Mar 2007 – PS2 HW declined 12.5%

FY ending Mar 2008 – PS2 HW declined only 3.3%

Therefore, with another year later and the increased uptake of PS3, along with Wii and Xbox 360 competition, I project a decline of another 15%, which is a bit more aggressive than the average  decline of the past 2 fiscal years.  The profit per console will remain at $10(*) per unit.

A 15% decline based on 13.73 million from the past FY equals 11.67(*) million units.

PS2 hardware = 11.67(*) million x $10(*) profit = $117(*) million PROFIT

PS2 Software

PS2 software has also been declining at an accelerating pace according to Sony reports.

FY End Mar 2006 – decline of 11.5%

FY End Mar 2007 – decline of 13.5%

FY end Mar 208 – decline of 20.2%

So for FY End Mar 2009, I am projecting an increase in the decline to 25% from the previous year.  This works out to be 115.5(*) million units, compared to 154.0 million units from FY End Mar 2008.  Net profit will stay the same at $2(*) per unit.

PS2 Software = 115.5(*) million x $2(*) NET profit = $231(*) million PROFIT

SUMMARY OF PROJECTED INCOME FOR PS2:

Hardware = $117 (*) million

Software = $231(*) million

TOTAL =$348(*) million PROFIT