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Sony Reports Record Net Loss, Expecting Big Things From Vita

Says next year will be okay though.

Sony have been preparing everyone for news of substantial losses during their financial year (FY11) that ended on 31st March 2012. In April they revised their forecast to predict a net loss of ¥520 billion (£4bn, $6.4bn) and if there is any good news from their actual results it is that they are not quite that bad.

Their reported net loss is ¥456.7 billion (£3.5bn, $5.6bn) with the most significant contributing factor being the writing off of deferred tax assets, primarily in the U.S.

With that huge headline grabbing figure out of the way let’s look at the numbers that are more representative of Sony’s actual market performance.

In its April forecast Sony said that it was expecting to record an operating loss of ¥95bn whereas its actual operating loss has come in at ¥67.3bn (£511m, $820m). The reversal from last year’s operating income of ¥199.8bn is attributed largely to a 9.6% fall in the value of sales to ¥6,493bn (£49.3bn, $79.2bn).

Sales decreased mainly in the [Consumer Products and Services] and [Professional, Device and Solutions] segments, primarily due to unfavorable foreign exchange rates, the impact of the Great East Japan Earthquake (the “Earthquake”) and the floods in Thailand (the “Floods”), and deterioration in market conditions in developed countries.

Sony’s forecast for the current financial year, FY12, ending 31st March 2013, is a return to profit recording an operating income of ¥180bn (£1.4bn, $2.3bn) and a net income of ¥30bn (£228m, $375m).

What we are all more interested in though is how well Sony’s PlayStation business is performing. That lives within Sony’s Consumer Products and Services (CPS) business segment which as a whole recorded an 18.5% drop in sales and posted an operating loss of ¥229.8bn (£1.7bn, $2.8bn).

Sales fell all across CPS’ product ranges with LCD TVs, PCs, digital cameras and the games business all getting a mention. On the PlayStation side of things it was the PS3’s last price reduction and the continuing decline of PS2 sales that were singled out.

Games hardware wise Sony sold 13.9m PS3s during the year compared to 14.3m in the previous year (FY10). PS2 sales unsurprisingly fell 2.3m to 4.1m and PSP sales dropped from 8m to 6.8m. Sony have not given figures explicitly for the PS Vita for either hardware or software sales.

PS3 software sales rose from FY10’s 147.9m to 156.6m. PS2 software sales more than halved, dropping from 16.4m to 7.9m while PSP sales also fell significantly from 46.6m to 32.2m.

In Sony’s forecasts for hardware sales in the current financial year they have combined the PS2 and PS3 figures to give an overall forecast of 16m units of “computer entertainment system hardware”. They have done the same with the PSP and PS Vita, forecasting sales of 16m units of “portable entertainment system hardware”.

Those numbers suggest Sony are expecting big things from the PS Vita in the coming year.

Source: Sony

Exchange rates: USD amounts are from Sony’s reports.  GBP figures are calculated at a rate of 0.0076 from OANDA for 31 March 2012.

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16 Comments
  1. HoboCastro
    Member
    Since: Mar 2010

    Looking good for this year though. Bravia is gaining ground again and Sony should be allowed to buy EMI. I think Sony need to make bigger inroads into the digital music market and they should think about tying in the PS3, Walkman, Xperia into a digital music account through SOE. Especially with Xperia with Google dragging it’s feet with Google Music in Europe, ideal to get a decent cross platform music service on the phones.

    Comment posted on 10/05/2012 at 09:22.
    • Watchful
      Team TSA: Writer
      Since: Oct 2008

      “they should think about tying in the PS3, Walkman, Xperia into a digital music account through SOE”
      You mean Music Unlimited that you can already get on your Sony devices (including PS3 and Xperia phones) that you access with your SEN account?

      Comment posted on 10/05/2012 at 10:29.
      • HoboCastro
        Member
        Since: Mar 2010

        Ah yes. Forgot about Music Unlimited. They really need to push that and advertise.

        Comment posted on 10/05/2012 at 20:36.
  2. cc_star
    Team TSA: Writer
    Since: Forever

    Interesting no Vita figures revealed, that can only really mean one thing & with PSP sales on the decline it’s hard to see how they’re going to see the uplift needed from selling outside their ‘core’ unless they change tact, eg price cutting of hardware & software and they get PSSuite up to speed so there is a buzz surrounding a vibrant dev community making impulse purchase addictive games ideally suited to being mobile.

    And blaming a PS3 pricecut from ages ago (although it does spill into 11/12) where it’s quite clear they’d have sold massively (really, really, really massively) less without out one.

    As far as the rest of the products in their business goes, they’re up a creek.

    Comment posted on 10/05/2012 at 09:27.
    • Watchful
      Team TSA: Writer
      Since: Oct 2008

      No Vita figures is worrying as is combining their forecast for PSP and Vita. Hopefully something will come out of the upcoming analyst calls.

      Comment posted on 10/05/2012 at 10:31.
  3. KeRaSh
    Member
    Since: Nov 2009

    So, the PSP roughly sold 6m units and the numbers are falling, yet they expect to shift around 16m Vitas and PSP?
    That would mean they expect to shift around 10m Vitas?
    Not going to happen unless they cut the price and get Capcom to release a Monster Hunter AND Square Enix to release a full Final Fantasy title…

    Comment posted on 10/05/2012 at 09:47.
    • Watchful
      Team TSA: Writer
      Since: Oct 2008

      My guess is we’ll see PSP sales drop to 4m or less this year leaving the Vita forecast at at least 12m.

      Comment posted on 10/05/2012 at 10:33.
  4. Bilbo_bobbins
    Member
    Since: Jun 2009

    All I can see is Sony heading towards a cliff, with no bridge to cross. They seem to be massively fudging up the Vita too so if they are hedging their bets on that selling lots then they have problems.

    Comment posted on 10/05/2012 at 09:53.
  5. Klart
    Member
    Since: Jun 2010

    Well if they expect to sell 16m Vitas & PSP’s (so basically 13m Vitas), then they must have A LOT up their sleeves for the VITA.

    I expect huge announcements soon, nothing less.

    Comment posted on 10/05/2012 at 10:13.
  6. LTG Davey
    andUandU
    Since: Aug 2008

    Over-priced TVs + lack of marketing for new handheld = Losses
    Wow, who knew :P

    Comment posted on 10/05/2012 at 10:16.
  7. tonycawley
    Pint! Pint!
    Since: Feb 2009

    How can they even say they expect big things from the vita when its sales figures are very very poor and they’re releasing no news to change that. Where’s the announcements? It isn’t suddenly going to start selling well if they don’t make it sell well.
    So, I expect a lot from them at e3 regarding vita.

    Comment posted on 10/05/2012 at 10:17.
  8. Sympo
    Member
    Since: Aug 2009

    The Vita is just lacking in loads of Japanese games to me, the PSP did great whenever a JRPG or the odd big franchise was released but yeah… I guess the Japanese aren’t really interested in things like Uncharted or Wipeout to be honest. Hopefully there is more games in late 2012 then into 2013 especially for all territories because it really needs system sellers.

    Be Interesting to see what the future holds for the Vita.

    Comment posted on 10/05/2012 at 10:19.
    • Watchful
      Team TSA: Writer
      Since: Oct 2008

      You’re right that the Vita will need some massive Japanese titles this holiday season to really get the Japanese buying. It’s got all the social features they love but not enough system-selling games. I expect there’ll be a price drop in Sept/Oct too.

      Comment posted on 10/05/2012 at 10:36.
  9. Kovacs
    Member
    Since: Dec 2009

    The fact that they’re not announcing Vita sales figures is very, very damning. As the twittercollective has mentioned today, Sony know failing to announce this information will be viewed extremely negatively by the press. This can only mean announcing the actual figures would have been even worse.

    I really, really want the Vita to succeed but the way Sony is managing this device is borderline lunacy. Nintendo faced a similar problem with the 3DS and they did the ballsy (and right) thing and cut its price.

    If the Vita’s price isn’t dropped at E3 then I think we might actually be looking at Sony’s first failed gaming device.

    Comment posted on 10/05/2012 at 12:00.
  10. wirralsman
    Member
    Since: Oct 2010

    Why are Sony hiding the actual predicted PS3 sales inside the “computer entertainment system hardware” umbrella this year along with the PS2? Release of PS4 in this Fiscal year confirmed?

    Comment posted on 10/05/2012 at 12:08.
    • Watchful
      Team TSA: Writer
      Since: Oct 2008

      I’m not sure I’d go that far. In the presentation slides that accompany the report that line is listed as “Computer Entertainment System Hardware (PS2/PS3)” alongside “Portable Entertainment System Hardware (PSP/PS Vita)” so they do identify the consoles behind the figures. If they hadn’t included the brackets then I think more speculation could be justified.

      Comment posted on 10/05/2012 at 13:22.

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