Sony posted its financials today. And despite a $583 million loss last quarter--the worst in four years--it has a net profit of $1.1 billion for the last year. This profit comes from the strength of their film division and electronics division. The video games division had a $1.9 billion loss for the last year. As many have said, including myself, the Sony PlayStation 3 looked doomed from the start. Each PS3 is sold at a loss, with sales numbers consistently below sales of Nintendo's Wii and Microsoft's Xbox 360.
Despite such poor performance, Sony has forecasted that this coming year will result in a record net profit of $2.8 billion. I suspect this forecast is the product of Spider-Man 3's record-breaking performance and the growing demand for high-definition televisions. I will be surprised if the video game division has a turnaround this year. This fall will find Sony's competitors at the top of their game--with Halo 3 being released September 25th for the Xbox 360 and Super Mario Galaxy for the Wii expected this holiday. And the high price of the PlayStation 3, at $599, remains a problem.
I believe PlayStation 3 can make a comeback. With a price cut on the console and the delivery of a few major titles, such as Final Fantasy XIII and Metal Gear Solid 4, they can begin a difficult reversal. But I think it will also take Nintendo and Microsoft both stumbling for Sony to regain the #1 spot they had for the last 10 years. If the competition doesn't falter, I think Sony will be in third place for years to come.
Do you think Sony's videogame business can make a turnaround? What do they need to do to succeed?
Related Stories: | Topics:Technology, technology + computers, Consumer Electronics Sector, Sony Corporation, Hobbies and Pastimes, Games, Culture and Lifestyle |
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Recent Comments | 3 Total
May 17, 2007 at 6:14am by aandarian
Ohanessian my Armenian brotha! I don't think they'll be able to make a quick comback. It's just the churning. More HD TVs are flooding in to the market as well, we'll go into next generation of prefrences. Only time will tell. They'll be back, just not for a while.
May 17, 2007 at 9:05am by Mike
Sony might make good movies that is about it. Everything Sony makes is expensive. There are better products out there then Sony.
May 17, 2007 at 11:14am by Ian
Sony will have to cut the price to compete, and they need a Grand Theft Auto 4 title to get them back in the lead. It's a good system, but they put too much stock in blue ray discs and they did away with some features from the ps2 that made it stand out. I'm sticking with my slim design ps2 for now, and hoping the WII comes down some b/c my wife likes the tennis game. Don't get me wrong - I've always loved Sony products, and had several Walkmans over the years. I'm always willing to shell out a little more money for superior quality. But, if they weren't in the music/movie industry, the ps3 would be $399 right now with several major titles lined up. Sony is hoping blue ray sticks, and that the other machines start to fade out (xbox360/wii), but they should look at their own track record over the past 10yrs with playstation and drop the price while bundling in major sw titles. Heck ya, I would buy a PS3 if they dropped the price and slapped on Grand Theft Auto 4.(I would still get a WII b/c of software titles). The GTA series, while violent, is an amazing experience in a real virtual world. You can actually live your life violence fee in GTA! With the amount of power the PS3 has, they need to get some better titles going before I'll even think about jumping on the bandwagon. Heck, I first bought the playstation one because I had a friend who got one with Resident Evil. We didn't stop playing that game till we solved it, and then played it numerous times to try to solve it differently. When we knew we could hook our machines up, we were floored. Sony needs to quit looking at the movie profits, and save a shinking ship. Otherwise, their PS3 will be just like the Sega Dreamcast which had all of the power of the PS2 but NO major software titles b/c SEGA wanted to control the market. Dreamcast faded hard in the wake of PS2 and SNES, and now, ironically, Sega just makes Software. And, of course, I have a dreamcast getting dusty in my collection of retired video game systems. Drop the price, Sony, give me a new Grand Theft Auto title for Christmas 07 and I'll buy one along with a new large screen TV to capture the full 1080i resolution!