Sony’s in a spot of financial bother

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Sony is, as we’ve highlighted before, in a spot of bother. Just about every one of its departments is doing the opposite of make money, with its gaming division as its one shining light. Unfortunately, it looks like even that candle is flickering out. Sony’s released its third quarter financial report – and it doesn’t make for pleasant reading where games are concerned. .

For the quarter ended December 31st, sales of game software decreased year-on-year from ¥316.1 billion to ¥268.5 billion, a rather sobering drop of 15.1%. Operating income for the games division decreased ¥29.2 billion year-on-year to ¥4.6 billion or about $53 Million –   though how much of that is because of R&D on the PS4 is anybody’s guess. The company still managed to make about $6 million in profits though. For what it’s worth, during the same period, Microsoft’s Entertainment and devices division made $500 million in profit , and Nintendo made $450 million. 

Sony blames the problem on “lower sales of hardware and software of the PlayStation 3 and PSP”, though they say they the loss was, “partially offset by the sales of the PlayStation Vita since it launched in Japan December 2011.”

“In the digital imaging and the game businesses, which are positioned as core areas of the electronics businesses along with the mobile businesses, the shrinking market for compact digital cameras, due to the expansion of the smartphone market, and the slow penetration of the PlayStation Vita portable entertainment platform are recognized as particularly important issues,” Sony said.

Together, the PS2 and PS3 sold 6.8 million units in the last quarter, and the PS Vita and PSP sold 2.7 million units – less than half of Sony’s forecast. In response, it cut its forecasts for the Vita.What it really should be cutting is the Vita’s price.

It paints a grim picture for Sony’s games division, who looks to be hedging its bets on the PlayStation 4 that might see a reveal later this month. With the cost of R&D, marketing and release – and the fact that the console will likely be a loss leader, if it doesn’t succeed it could be the end of Sony as we know it. And that’s not good for anyone.

The company on the whole though? It’s doing a fair bit better. In the quarter ending December 31 its posted an operating income of ¥46.4 billion – which is a far cry from the NEGATIVE ¥91.7 billion for the year previous.

Overall though, the company’s still made a loss  but it’s decreased 148.2 billion yen year-on-year to 10.8 billion yen. It’s a significant jump and the first step to Sony getting back in the black. It looks like perhaps Kaz Hirai was the man for the job.