Unsurprisingly, Sony’s forecast a few days ago was pretty accurate. The headline figure in Sony’s results for their 2009 fiscal year (FY09) which ended on 31st March, is that they achieved an operating income of ¥31.8 billion. This is in stark contrast to the operating loss of 227.8bn they recorded a year ago.
That is despite a fall in their sales and operating revenue of almost 7% from ¥7,730bn to ¥7,214bn. Putting this year’s sales into currency figures you are more likely to be able to identify with it is $77,570 million, €55,492 million or £52,507 million.
Currency is something that is hurting Sony across most of its business segments. The troubles that have faced Western economies since 2008 have significantly weakened the Pound, Dollar and Euro in relation to the Yen. For example, if you had picked up a PS3 for $299 or €299 between January and March this year, those Dollar and Euro figures equate to ¥27,807 and ¥38,870 respectively. Back in the late summer of 2008 though those same 299s would have been worth ¥31,993 and ¥47,541.
So how is Sony performing around the world? The short answer is okay in Japan and not so well elsewhere. In its home country Sony’s sales and operating revenue for the year was ¥2,099bn, up 12.1% on last year. In the US sales were ¥1,595bn ($17,151 million) down 12.7%. In Europe it was even worse with sales of ¥1,644bn (€12,651 million) down 17.3%. “Other Areas” were down 8.1% at ¥1,875bn.
What Sold During The Year?
15.6 million LCD TVs for starters. That is up 400,000 on the previous year. That is an awful lot of people who have bought a new TV just before 3D becomes The New Big Thing™. We all know that Sony is betting heavily on 3D over the coming years and that is reflected in their unit sales forecast for LCD TVs this year. That stands at 25 million, a whopping 60% increase on FY09. Let us hope for Sony’s sake that that forecast is a lot more reliable than their one for the PSPgo was.
Sales of both video cameras (5.3 million) and compact digital cameras (21 million) fell compared to the previous year (6.2 million and 22 million respectively). This probably should not come as surprise to anyone as with most mobile phones including cameras that are becoming more and more capable, fewer people are seeing the need to carry a separate, dedicated camera.
Gaming Hardware and Software
Of course, both your and my own primary interest in Sony’s results is what it tells us about the performance of the PlayStation part of the company, in particular hardware and software sales. Sony’s game business is part of its Networked Products & Services (NPS) business segment so let’s start there.
NPS saw sales fall over 10% from ¥1,756bn to ¥1,576bn ($16,945 million) primarily due to a decrease in sales in the game business and of VAIO PCs. The NPS segment recorded an operating loss again in FY09 though it has reduced by over ¥4bn from ¥87.4bn to ¥83.1bn.
So what about the game business? The aforementioned currency issues were a particular pain and Sony also singles out the decrease in unit sales of PSP hardware an PS2 software as contributing factors. The contrasting increase in sales of PS3 software and hardware help to mitigate that to a degree.
PSP hardware unit sales were 9.9 million compared to 14.1 million in the previous year. PS2 software sales more than halved from 83.5 million to 35.7 million. Sony sold 13 million PS3s, up from 10.1 million and 115.6 million units of PS3 software, up from 103.7 million.
That may not sound like much of an increase in software sales given how many more PS3s there are compared to a year ago, but if we look at quarterly sales figures the story becomes clearer. In the first quarter of FY09, pretty much the darkest depths of the global recession, sales were 14.8 million compared to 22.8 million a year earlier. In Q2 PS3 software sales finally crept above those of the previous year (23.9m versus 21.2m). Then both Q3 (47.6m vs. 40.8m) and Q4 (29.3m vs. 18.9m) show significant year-on-year growth.
A Glimpse Into The Future
There are two interesting aspects to Sony’s forecasts for unit sales in their 2010 fiscal year, which began on the 1st of April. The first is that they are not forecasting any growth in PlayStation software units sales. They simply say they expect them to be “Approx. same as FY09”. Given the forecast hardware sales (PS3 15m, PSP 8m, PS2 6m) which presumably grow the market for software it is surprising they are not predicting an increase in software sales, potentially pointing to a lack of faith in the global recovery.
The other interesting point is that forecast 8 million PlayStation Portable sales. That represents another yearly fall in sales, remember they were 9.9m in FY09. Think about what that says about whether we will see a PSP2 this year. Unless Sony are themselves predicting that a potential PSP2 would be a sales flop like the PSPgo has been, and in which case why would they release one, it strongly suggests to me that we will not be seeing a PSP2 at E3 or anywhere else until next year.
We will be back later today with the highlights of Sony’s investor’s conference call.
