Sony profits up, but PS3 losses double

Sony reported its second quarter earnings today, and while the company's overall profits were up, at ¥90.5B ($790M), the Playstation division's losses for the quarter came in at ¥96.7B ($844M), double those of a year ago. Sony says that once it's done accounting for all the recent PS3 inventory changes, it hopes the Playstation division will break even -- potentially in the second half of the fiscal year. Of course, since the PS3 is sold at a loss, the numbers might indicate that Sony's selling more PS3s than ever, but something tells us that's not exactly the plan.

[Via Joystiq]

[rahat @ Oct 25th 2007 1:44PM]

dont taze me bro!

[paloooz @ Oct 25th 2007 1:55PM]

Fail.

[Tristan @ Oct 25th 2007 4:23PM]

did you expect everyone to reply with "haha"s and "your a genius"?

[Manuel @ Oct 25th 2007 6:38PM]

i think you misspelled www.digg.com on your browser

[SteveMB @ Oct 25th 2007 9:10PM]

Nice, you copied the comment in the HD-A2 comments!

[rahat @ Oct 25th 2007 9:12PM]

i am proud to have earned your unanimous hatred

[Kiran Nesarajah @ Nov 20th 2007 10:21AM]

sigh.... so not smart...

[sburko @ Oct 25th 2007 1:50PM]

Second quarter earnings compared to a year ago? If I'm not mistaken the PS3 had not even launched by then.

[Dale @ Oct 25th 2007 1:52PM]

The system hadn't launched, but the R&D on it was losing the division money.

[Garst @ Oct 26th 2007 2:23PM]

They're probably taking about whatever quarter the last three months of the year are for Sony. Not October 25, 2006.

[Joe_Templeman @ Nov 6th 2007 4:39AM]

I dont know how they've done it but with those figures....some executive somewhere is being raped right now...

[Dale @ Oct 25th 2007 1:52PM]

It's much more complicated than just "more losses equals more systems sold" - Sony loses the money on each unit whether or not it sells, it's just how much they lose that fluctuates. More losses could also just be more systems produced, or as is almost certainly the case, a complex combination of all of the above.

The loss on each system is still significant despite hardware changes and increased production efficiency, I'm struggling to see how they plan to break even so rapidly.

[John @ Oct 25th 2007 4:09PM]

They lose money on consoles they sell AND that they don't sell, but they lose less on the ones they do sell. So there are a few possible things that could have happened to generate these numbers

[Disappointed in Sony @ Oct 25th 2007 1:53PM]

Sony is just in deep ****, and it's their own fault, frankly.

For just the latest example, I was gonna buy the new $399 PS3 that's arriving soon... 'til I heard that Sony DISABLED the backwards compatibility on said $399 model! So, you CAN'T play your (likely huge library) of PS2 games on it?!?

WOW, hold me back, I sure gotta buy one of those NOW. o_0

It's just amazing to me how Sony is able to so consistently shoot themselves in the face of late. You never would guess that these are the guys who practically OWNED console gaming for 12 years. =[

Oh well. Guess I won't bother buying the $399 PS3 now, and the $499 model is too expensive. The Wii is looking better all the time. WANTED to buy a PS3, but Sony 'wouldn't let me'.

Great job Sony, that's why you pay your executives the big bucks. =\

[syke @ Oct 25th 2007 2:05PM]

0.o They aren't backwards compatible at all. Gee.. that's stupid. No wonder I have seen stacks of the stupid things in stores.

[Crayola @ Oct 25th 2007 2:19PM]

You couldn't be more wrong. You know where that $730 million profit came from? Sony's Electronics division, that being Bravia, Cyber-shot, Handy-cam, portable electronics... Howard Stringer got my vote of confidence.

OK, Sony can you bring back the world's favorite cyber-dog?

[kling @ Oct 25th 2007 2:23PM]

yeah couldent imagine someone getting up and hooking their ps2 into the front jacks of a tv. that would be crazy to play a game from their "likely huge libray" on a ps2.

you do know that a wii will not play ps2 games either. and what games to they have coming in the near future? mario galaxy give me a break. the good exclusives they have are zelda and metriod, all the rest are kid games. soon the ps3 will have uncharted, mgs4, final fantasy, GT5, just to name some of the exclusives. that is when they will turn the huge losses around.

[Phatman @ Oct 25th 2007 2:34PM]

Don't be ignorant. A big factor in the price drop was the fact that they are saving money on the cost of producing the system by cutting out the hardware backwards compatibility. They did replace it with software backwards compatibility which isn't as good but it will still allow you to play most of the PS2 library on the PS3. I personally don't see any problem with Sony diversifying their PS3 lineup. For the people who want a cheap system/bluray player and don't care that much about PS2 compatibility go for the cheap system. For the people who do care about the PS2 compatibility, you'd better get off your ass and buy one of the models with the hardware backwards compatibility before Sony stops making them. Either way it gets more bluray players into peoples homes which is Sony's goal.

[Maestro @ Oct 25th 2007 2:37PM]

Is it me or has the # of fanboys for the ps3 dwindled? In the past a post like this would have been flamed to death. I have all 3 systems. They get used in this order. Xbox 360, Wii, PS3 (distant, distant 3rd). I do use the PS3 for movies whether they be DVD or Blu-Ray, but I hate the remote and the fact that it is a bluetooth remote really limits my ability to use it with a universal remote.

I'm pulling for the PS3 not as a fan of Sony but as a fan of gaming. I bought it to play great games and I have been let down.

[Mak @ Oct 25th 2007 2:49PM]

Hey dumbass, buy the more expensive one then.

I bet your also the kinda moron who wants to buy a supercar for $30,000

It's worth comparing this quaaters losses for the PS3, to how much money Microsoft are losing on the 360, ($8Billion(ish) to date, including the $1.1 billion reserved for 360 repairs).

Sony have a long way to catch the masters of losing money on gaming consoles..

[Aztec @ Oct 25th 2007 3:15PM]

Kling,

"you do know that a wii will not play ps2 games either." If things dont turn around for Sony, PS2 games might be downloadable using the Wii's Virtual Console someday. Who could ever predict that SEGA games would be playing on a Nintendo way back in the Super Nintendo/Genesis days??

[Still Disappointed in Sony @ Oct 25th 2007 3:30PM]

"Hey dumbass, buy the more expensive one then."

Sigh. Hey numbnuts, try reading what I wrote before replying next time:

"and the $499 model is too expensive"

Gotta luv clowns that don't bother to read anything, but still spout off like they know anything. =\

Anyhow, thanks for the flames guys, you've just about convinced me to go with the Wii over the PS3. Why? Because fanboi-ism is no substitute for reasonable pricing and backwards compatibility... and Sony doesn't seem to be able to give me both in a single PS3 model, they still wanna play footsie with the customer. =p

Not to mention they're still lacking a good lineup of PS3 games as of yet, even after a year.

Bummer. =[

[kling @ Oct 25th 2007 4:11PM]

go ahead get your wii, big waste of money i have one and my ps2 looks better than the wii games. i dont understand what you want sony to do, suck you off? by christmas there will be a butt load of games for the ps3, and after that they will just keep coming. i have all three next gen consoles and the ps3 is by far the better value of all of them. 360 didnt have a great game in my eyes until halo 3 yes there was some good ones but the great one didnt come for quite a long time. ps3 will have come out with a great game faster than the 360 did after launch, but they dont only have one great game coming i see a few coming soon. i dont see anything for quite a long time coming out for wii alone. mario galaxy is it and though i'll be getting it mainly for my kids and i will play it i am not excited in the least by it, same with the 360 after i got halo 3 i dont see anything exclusive coming out on it for a long time either.

again the backward compatability thing is dumb because if you have ps2 games you have a ps2 as well, sony isnt hurting the consumer by not offering it.

i dont get why you people think sony is bad to their costumers when they have by far the most advanced console this time around and not only will it play some great games better than the rest it will also do so much more than the rest. all the wii can do is play games and do stuff online and their online is crap, can even play a simple dvd. seriously dude think about the value here, how could you be disapointed with sony considering everything you get with the ps3 for only 150 bucks more than the wii. sound to me you are a wii fanboi because you really arent thinking very logically the only thing the wii has is the wiimote and i hate the thing.

@aztec yeah it may be a possibility but i highly doubt it, sony is by no means broke and they are about to right the ship, just give it 6 months and you'll see it to. and even if they are available for download many many years down the road what does that hae to do with B/C right now? when and if they are available for download it's not like the ps2 discs would magically work in the wii.

[Abdul Quraishi @ Oct 25th 2007 4:51PM]

First of all, Sony hasn't DISABLED the PS3 compatibility, they just stopped installing the PS2 Emotion Engine chip in the PS3 because they were losing a lot of money. Now they've switched to software compatibility, so while you might not be able to play all of your PS2 games, after a few system updates, you will. There ya go guys, happy?

[Still Disappointed in Sony @ Oct 26th 2007 1:03PM]

"i dont understand what you want sony to do, suck you off?"

Gosh, judging from your ultra fanboi comments, I think the real prob is that you desperately want to suck Sony off. =[

Let's just give up the fanboi crap right now. The PS3 is DEAD LAST among the next-gen consoles in sales for a reason. You don't go from first to worst in a single console generation if everything's f-ing rainbows and chocolate gumdrops, lol.

Denial isn't gonna help them get better, honestly confronting the areas where they're falling short will.

But until Sony finally figures it out, there's always the Wii. Ironic, considering I hadn't even given Nintendo a second look since their Super NES days.

[Joe_Templeman @ Nov 6th 2007 4:39AM]

Abdul Quraishi: That was true for the European consoles, but they have actually got rid of the software emulation in the 40GB ones worldwide so you wont be able to get it with a software update.

[Nate the Prophet @ Oct 25th 2007 1:58PM]

Hey, I saw yesterday that at the Sony stores or Sonystyle.com you can buy a PS3 using the Sony credit card and get a $100 credit as a promo for signing up for the card...basically saving you $100 on your PS3.

I was just wondering if anyone here has done that. Because an 80GB PS3 for $399 would be, well, impossible to pass up!

[Kiwi616 @ Oct 25th 2007 2:00PM]

Don't see why not...I just purchased a HDD Camcorder and received a $100 off with a new Sony Card.

[chris fredette @ Oct 25th 2007 3:55PM]

It is quite possible to pass up. Trust me as a owner of all 3 consoles I would spend $400(plus a extra controller and cables) on a wii, metroid, mario galaxy, PGR4, halo 3, bioshock, and Mass effect first. Get a PS3 when there are at least 5 first party games that don't suck or if you are jonsing for a blu-ray player.

[Zoesch @ Oct 25th 2007 4:22PM]

So that's why EA swallowed BioWare, Mass Effect for the Wii and why Bungie split, Halo 3 for the Wii.

You got to clutch at those straws harder

[Abdul Quraishi @ Oct 25th 2007 4:50PM]

Used to be $150 off when I got mine in August!

[coolant8 @ Oct 25th 2007 1:58PM]

I wonder why...

[frank @ Oct 25th 2007 2:04PM]

have to remember that the blu ray player in the PS3 is like 500 bucks so not only you get gaming ability you gain one of the best movie experiences with blu ray

[Wesburl @ Oct 25th 2007 2:11PM]

Holy time tinkering batman! It's a exhausted fanboism comment from the past! It must have found its way here through a time rift of some sort!!

Lets dissect this sentence...

*the blu ray player in the PS3 is like 500 bucks*
No its not

*not only you get gaming ability*
No you don't

*you gain one of the best movie experiences with blu ray*
Debatable, format war fanboism

Quoting Paloooz:
"Fail."

[timatl @ Oct 25th 2007 10:48PM]

next to the best b/c bluray does not offer as many features as the HDDVD

[MasterCKO @ Oct 26th 2007 6:35PM]

@Wesburl:

The PS3 DOESN'T have game playing ability? News to me.

[Ike Skelton @ Oct 25th 2007 2:09PM]

Overpriced and no backwards compatibility.

Supposedly going to lose exclusive content for GTAIV to XBOX.

Also, doesn't have an open ended zombie game.

[teej @ Oct 25th 2007 2:12PM]

as someone already mentioned, for Sony to break even in such a short period of time would be ridiculously uncanny (aka highly improbable). if anything, i believe Sony is losing more customers as we move forward due to the reduced capability (backwards compatibility) and the lack of library. call me when Sony has some PS3 games and also supports a superior format (see HD-DVD). you know, one can only play Warhawk for so long...

[Ty @ Oct 25th 2007 2:31PM]

I have to ask, if you have a huge library of games for the PS2 doesn't that likely mean you already own a PS2? And if you don't have a huge library of PS2 games but want one you wouldn't be looking at the PS3 anyway right? If you buy a PS3 isn't it safe for Sony to assume that you either want to play ps3 games or blu ray movies on it?

[cmc @ Oct 25th 2007 2:31PM]

B/C won't matter to most people who buy a PS3 from now on anyway. I still have my PS2 and I would rather have WiFi built in than backwards compability.

BTW I'm getting my PS3 tomorrow when Pro Evo 2008 comes out =) SUCCESS!

[Dale @ Oct 25th 2007 3:10PM]

Not everyone wants or has space for several devices under their TV. The ability to consolidate is generally a good thing. Additionally, being able to trade in your PS2 would get you money off the purchase price of the PS3.

Either way, as the library of PS3 titles is so small right now, having the PS2's library at your disposal in the interim is a deal sweetener.

[Ike Skelton @ Oct 25th 2007 3:14PM]

I want to be able to play my PS2 games on the PS3 cause my PS2 is slowly but surely going out. I don't care about the bluray, I could go for a PS3 with big HDD, backwards compatibility, and no bluray... if it was reasonably priced. And if there were more games I was interested in playing.

[John M @ Oct 25th 2007 3:40PM]

Exactly!!...You can still pick up a backwards compatable one if you want..otherwise save some cash and get the new one...Pretty simple...Not to mention all the benefits of a Blu-Ray Player,Free online gaming,Multiple USB ports,Upgradable Hard drive to any capacity,backwards compatability with PS2 controllers and Memory Cards,Built in WI-FI and HDMI out of the box...and oh yeah you wont have to send the console in 4 times a year for repairs...The titles are starting to roll out to...Folklore,Resistance,Heavenly Sword,Lair,Virtua Fighter,Warhawk and Ratchet And Clank...360 still superior in titles but if you compare the 360 lineup for year 1 and the PS3 lineup its pretty much a wash...I have had both since launch and I like all the extra features of the PS3...Not ot mention im on 360#4 which is also in need of repair due to a DVD region incompatability that all of a sudden popped up...Dont get me started on the wii (I hate my wii)... PS3 will have a 10 year lifespan where as XBOX will have to release the 720 much sooner than the PS4

[Asten @ Oct 25th 2007 2:43PM]

PHB: "We'll sell these cheaper so more people will buy them"

"But, won't we be losing money on them then?"

PHB: "Don't worry, we'll make up for it in volume!"

[Constable Odo @ Oct 25th 2007 2:58PM]

If they'd just slash the price another $100. I'd buy one and help save the company. Still, I'd rather wait until GT5/HD hits the streets. Oh, why can't they have MotoGP 07 runnning on the PS3? I want to play that sim so bad it hurts.

[The Fuzz 53 @ Oct 25th 2007 4:53PM]

Get a 360 and quit waiting.

[mattloaf1 @ Oct 25th 2007 3:11PM]

I can has a rational business model?

[Jonathan Lim @ Oct 25th 2007 3:20PM]

Maybe they are taking the PS3 hit to promote Blu-Ray DVD Sales?

[Isindil @ Oct 25th 2007 3:38PM]

(Note that I didn't read any of the comments above me.)

Considering that they lose money on consoles, but earn money on selling games, there must be some kind og ratio they will have to reach in order to go in plus. Well, what if, say, Microsoft were to sick amounts of PS3, yet never any games. That would potentially make it possible to damage Sony quite a bit, wouldn't it? This whole lose-a-lot-per-console-strategy seems kinda risky from my point of view. Not that I think such a thing as I said will ever happen, but IF, then it could be devastating.

And to make sure, can Sony stop a company from doing this in any way?

[Mitch @ Oct 25th 2007 3:39PM]

Wow - $844 million is a LOT of money to lose in a quarter. How does that even work out in average loss per player sold?

I guess the profit potential for video game platforms is enormous or they wouldn't be willing to lose so much money along the way.

I wonder is MSFT is making money on the 360 platform. I know they had been having large losses but the release of Halo3 could have allowed them to turn the corner.

Video games are a tough business.