Sony Posts Q2 Loss, As PS3 Sales Rise On Price Cut

Sony posted lower revenues and a net loss for its fiscal Q2 on a strengthening yen, as unit sales of PlayStation 3 rose 33 percent year-on-year thanks to a September price cut. Tokyo, Japan-based Sony said the introduction of the slimmed-down, less expensive PS3 drove hardware unit sales to 3.2 million units during the quarter ended September 30. The company sold 2.4 million units for the same period a year ago. Analyst Arvind Bhatia with Stern Agee called the quarterly PS3 sales a "positive for the industry, especially in light of Nintendo’s reduced target for Wii hardware sales announced yesterday." Sony previously said that the new, slim PlayStation 3 sold 1 million units in its first three weeks on the market worldwide. Despite the spike in PS3 sales, Sony's Networked Products and Services Division, which is home to its games business, saw revenues drop 24 percent year-on-year to ¥352.6 billion ($3.9 billion). Operating loss in the division was ¥58.8 billion ($645.40 million), up from a loss of ¥40.6 billion ($445.63 million) a year ago. Sony attributed the drop to lower Vaio PC and game revenues. Sony said decreasing sales of the venerable nine-year-old PlayStation 2 were the main driver behind lower game revenues. The company sold 1.9 million PS2s during the quarter, down from 2.5 million a year ago. PlayStation Portable sales were also down, dropping to 3 million sold during the quarter compared to 3.2 million units for the same quarter a year prior. Sony reiterated full-year PS3 sales of 13 million units, up from 10.1 million units for the previous year. The company also still expects to sell 15 million PSP units this year and 5 million PS2s this year. The company also said it expects to sell 23.9 million PS3 software units this year, up from 21.2 million a year ago; 12.9 million PSP titles, up from 11.8 million; and 11.1 million PS2 titles, down from 23.2 million units. As a whole, Sony posted revenues of ¥1.66 trillion ($18.46 billion), a 19.8 percent year-on-year decrease. Net loss was ¥26.3 billion ($292 million) compared to net income of ¥20.8 billion ($228.37 million) for the same quarter last year. Sony attributed the lower figures to a "slowdown of the global economy and the appreciation of the yen." Sony said that it beat its Q2 expectations, and revised its annual profit outlook upward. The company now expects a net loss of ¥95 billion ($1.04 billion), down from a previous net loss outlook of ¥120 million ($1.32 million) for the fiscal year ending March 31, 2010.