PS3, Get Fun!

Sony  revealed that through the fiscal year ended March 31, the company shipped about 5.5 million PlayStation 3 units and sold around 3.6 million of those. 13.2 million units of PS3 software were shipped.

The expensive console took its toll on Sony’s bottom line, however. For the year operating income plummeted 68 percent from 226.4 billion yen to just 71.8 billion yen ($608 million). Sales and net income, however, were up 10.5 percent and 2.2 percent, respectively. Total sales amounted to 8.3 trillion yen ($70.3 billion) and net income was 126.3 billion yen ($1.07 billion).

As was expected, the game division took a beating. Operating loss came in at 232.3 billion yen ($1.97 million) compared to an operating profit of 8.7 billion yen in the last fiscal year.

Sales in the game unit were up 6.1 percent to 1.02 trillion yen ($8.6 billion). Sony attributed the game unit’s performance to “the result of the loss arising from the sale of PS3 at strategic price points lower than its production cost during the introductory period, as well as the recording of other charges in association with the preparation for the launch of the PS3 platform.

” The company also noted that overall software sales declined because of lower PS2 sales. Sony was able to increase operating income related to the PSP, however, due to “continued cost reductions in hardware production.”

During the current fiscal year ending next March, Sony is expecting a major improvement for the PS3. “An increase in sales is anticipated as a result of the full-scale expansion of the PS3 business in Japan, the United States and Europe. In addition, a significant reduction in operating loss is expected due to rapid reductions in hardware production costs and an enhanced line-up of software titles in the PS3 business,” the company stated.

Sony Corp. as a whole is also very optimistic for the current fiscal year. The company expects profit will more than double to a record 320 billion yen ($2.7 billion). “Our results demonstrate a healthy recovery,” said Corporate Executive Officer Nobuyuki Oneda, who added, “The PS3 business will really get off the ground this fiscal year.”

“The good news is that profitability is being maintained in the electronics unit as well as sales,” Mitsuhiro Osawa, electronics analyst at Mizuho Investors Securities told the AP. “The results came about because of wise steering on the part of management.”

Indeed, it’s believed that the worst may now be over for Sony, and the company can begin to climb out of the valley. “It’s clear that Sony has got out of its worst period,” Mitsushige Akino of Ichiyoshi Investment Management Co. told Bloomberg.com. “If Sony continues performing better than the market’s expectations, the stock may reach 10,000 yen.”

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