Sony’s Annual Report 2010
The edited 'highlights'. There aren't many.Published: 10:30, 29/06/2010 by Greg [Watchful].
19I may be strange in having been eagerly awaiting the release of Sony’s Annual Report following their OGM which was held on June 18th. The thing is that I always hope to uncover some grain of knowledge held within its pages that might reveal something about Sony’s plans.
Sadly when Sony make forward looking statements in this year’s report much of their focus is predictably on 3D, and more surprisingly eReaders, than on discussing any new gaming developments. Move gets mentioned a few times and they note that with reducing PS3 hardware cost and increasing PS3 software sales they “are targeting profitability in the game business in fiscal year 2010″.
The key impression that reading the report from a gamer’s perspective has given me though is that the Game part of the business is in pretty poor shape. While the numbers are no different to what they were just over a month ago when Sony’s financial report was published, this annual report often looks back over the last three years rather than just two.
There are a couple of nice graphs that handily illustrate the declining unit sales of both PlayStation hardware and software over the those three financial years. When you look at the revenue generated by the Game segment of the business you can see that compared to last year (ending 31st March 2009) it was down 15%, whereas compared to the year before that (ending 31st March 2008) it was down 31%.
Unfortunately unlike revenue, income and loss is not broken out for the Game segment and we only have the figures for the Networked Products & Services (NPS) segment as a whole. Go back just one year and it looks like things are improving with NPS having reduced their operating loss by 5% from 87.4 to 83 million yen. But looking back the additional year their losses have increased by 7% as the world’s economy has faltered.
Graphical and tabular extracts of note are in the gallery below and I have run my digital highlighter over the relevant figures in the tables. I have also included the images of the PlayStation software titles that Sony have chosen to pick out, mainly because I find it amusing that GT5 shows up in each year’s report and is still subject to the disclaimer that “some titles are yet to be released”.
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29/06/2010 at 10:38
Member since: Jun 2010
Looking at the first graph it shows that it is only PS2 and PSP that have declining sales in software and hardware since PS3 sales are up on both. This must’ve been expected.
29/06/2010 at 10:43
Member since: Jul 2009
Agreed and same thought here. We’re saying the natural tail-off of the now-creakingly-old-but-still-wonderful PS2. PS3 was the only console (out of Wii, 360 and PS3) to perform admirably last year. Good to see that momentum continue, especially as it’s now snuck into the “profitable hardware” bracket.
29/06/2010 at 10:43
Member since: Apr 2010
I was going to say, with the release of all the titans like Uncharted and God of War, there is no way PS3 game sales would have been going down! That is what software means right?
29/06/2010 at 10:54
Member since: Oct 2008
Yes, that is what software means, games. Though PS3 games are selling increasing numbers, the falling number of PSP game unit sales is where the pain is in that graph for Sony.
29/06/2010 at 10:50
Member since: Oct 2008
Not entirely. Sony forecast 15m PSP sales in the last financial year and came up over 5m short. That was not expected.
29/06/2010 at 10:59
Member since: Jul 2009
Aye… PSP continues to be a thorn in Sony’s side. How do they reinvigorate it before any major hardware updates?
29/06/2010 at 11:09
Member since: Jun 2010
Well yeah the PSP business is bad but at that price point what did they expect?? What I meant was of course that they would expect that PS2 sales would decline and PS3 sales would go up.
29/06/2010 at 11:16
Member since: Oct 2008
But you said in your first comment that declining PSP sales must have been expected. They were not. Exactly the opposite in fact.
29/06/2010 at 11:19
Member since: Jun 2010
Yeah I know sorry submitted a bit too fast.
29/06/2010 at 11:28
Member since: Jul 2009
Premature evacuation, eh? We’ve all done it.
29/06/2010 at 11:02
Member since: Forever
Yes, the PS3 is getting a bigger slice of the Sony pie (which would be expected) but the pie is decreasing in size… so it’s not all that great.
Given the fact that the PSP has had more relaunches, rebrands & money thrown at it than a DFS Sale since 2008, I’d say that side of the business isn’t disappointing but piss poor
29/06/2010 at 11:17
Member since: Jun 2010
In a transition period between the PS2 and PS3 I would have expected this. I mean fewer people buy PS2 over time and more buy PS3 but it will take time before PS2 owners go out and buy a PS3.
Not explaining myself properly I think but you get what I mean?
29/06/2010 at 11:18
Member since: Jul 2009
It’ll be the PS3 propping up the others soon. What a turnaround, eh?
29/06/2010 at 11:23
Member since: Forever
Absolutely get it, you’re right and over time things will be just fine and dandy (as far as home consoles are concerned anyway, not sure about Sony’s handheld strategy)
Another problem for Sony to overcome though, is that it is declining profitable hardware sales being replaced by loss-making/break even hardware sales, I know the PS3 will become profitable over this year, but I’d suspect there are far less margins in the PS3 than the PS2 for a few years to come, which means they need to shift even more of them to make the same amount of money (and they’re not, they’re shifting less)
Damn recession!
29/06/2010 at 11:27
Member since: Oct 2008
It is probably fair to expect PS3 to be the majority of hardware and software sales in the current financial year. But with overall revenue falling like it is it would take a massive uptick in sales for things to start looking better for Sony’s Game business.
29/06/2010 at 11:27
Member since: Jul 2009
I’m guessing they have some under-lock-and-key forecasts where they’ve worked out what they’ll potentially make on each PS3 per unit and attachment of titles. How the hell do they hope to recoup it all? I can’t see it happening. Whereas, I’d be fascinated to see what PS2 made them over the 10 year life cycle.
29/06/2010 at 11:58
Member since: Apr 2010
So is it that Sony are making money from the PSP, but not as much as they expected, or are they losing money?
29/06/2010 at 12:05
Member since: Jun 2010
Well they have an operating loss and since the PS3 is making a profit, albeit small, and PS2 must be profitable, then I’m guessing they are losing money on the PSP. Just a guess though maybe someone else knows?
29/06/2010 at 12:10
Member since: Jun 2010
I wonder if this will convince them to lower the price point of the PSP… hopefully they will have learned from the PS3 strategy where a new SKU and lower price point set it “on fire” :-)
29/06/2010 at 12:39
Member since: Aug 2009
From image 3 … they are earning less and less money each year?
29/06/2010 at 12:44
Member since: Jun 2010
Yeah but that is probably because of the recession.
05/07/2010 at 15:59
Member since: Jun 2010
Good to Sony have at least caught up and now competiting with MS head on.
Out of the 2 consoles Sony definitely has the edge in terms of better system, and better games at the moment