Today, Sony posted its financial results for the fiscal year ended March 31st, 2007, and it appears that the analyst predictions weren’t that far off the mark. According to a report
posted yesterday, a median estimate taken from a survey of 11 analysts forecasted that Sony had lost approximately 245 billion yen (US$2.04 billion) in operating income within their video games division alone due to the high costs and setbacks associated with the worldwide launch of their PlayStation 3 console. The genuine figure turned out to be 232.3 billion yen ($1.97 billion), although sales and operating revenue for the games division increased to 1.02 trillion yen ($8.61 billion), a 6.1 percent year-over-year increase.
According to Sony’s report, overall hardware sales for the division increased due to the addition of the PS3 to the PlayStation brand, but the number of PS2 and PSP units sold decreased from the previous fiscal year. In addition, price drops for the PS2 also managed to cut into potential revenue, although cost reductions in PSP manufacturing managed to alleviate some of the losses.. Overall software sales, on the other hand, decreased due to a significant drop in PS2 titles, although increased sales from both PSP and PS3 software managed to allowed the company to break even in terms of number of units shipped.
During the games division’s hour of need, Sony’s other ventures remained profitable enough to pick up the slack, thanks to a 16.9 percent increase in sales of their electronics products and a 29.5 percent rise in sales related to their movie division. Also, as mentioned in our earlier report, the depreciation of the yen-to-dollar ratio over the last fiscal year also played a factor in the company’s success due to increased revnue from overseas sales. All of Sony’s remaining divisions made improvements across the board, except for two: financial services and Sony BMG Music Entertainment.
However, the combined success of all of Sony’s other divisions certainly weren’t enough to show year-over-year improvement. Although total fiscal year sales for the entire company increased 10.5 percent to 8.30 trillion yen ($70.30 billion), operating income took a free fall to only 71.8 billion yen ($608 million), a 68.3 percent drop from the previous fiscal year.
Despite these bad tidings, the company paints a rosy picture for the coming year, as the company expects to make back its initial investment on the PS3. Sony forecasts sales and operating revenue to total 8.78 trillion yen ($72.72 billion) by the end of March next year, which would represent a 6 percent increase. As for operating income, Sony expects to bounce back from its dismal performance this year and generate 440 billion yen ($3.64 billion), a whopping 513 percent increase.