An interesting look at Sony’s Financial Situation with the PS3
While Nintendo gets more doom articles than anybody these days. What’s swept under the rug are the other console manufacturers struggles in the console space. The PS3 is widely looked at as a success for Sony because of the brainwashing of tools like Michael Pachter. However, the PS3 lost Sony billions of dollars over the course of it’s lifetime. didn’t net them much profit over the course of its life.
I have seen a couple of threads / posts and even articles claiming that the PS3 made one of the greatest comebacks and is a profitable business for Sony. I just had to clear this up.
It seems that a lot of people forgot or ignore the gigantic losses Sony reported earlier this gen, thanks to the PS3.
The financial year that ended March 2006, Sony’s game division reported a 75 million USD operating income. Back then the PSP and PS2 were going really strong and were highly profitable. The operating income was down 80% just thanks to the R&D for the PS3. So even before the PS3 was released it already had its impact on the gaming business.
The financial year ended March 2007, the gaming division reported a 1.97 billion USD loss. Again the PS2 and PSP were profitable back then, so the losses made by the PS3 easily surpass the 2.2 billion USD mark.
The next year, Sony reported a 1.24 billion USD loss. Again considering the PSP and the PS2, 1.5 billion USD loss just for the PS3 in this one year is an educated guess.
In the year that ended March 2009 the gaming division saw some improvements, but still reported a 591 million USD loss.
So before the next financial year started, the PS3 already had a 4.3 billion USD loss to fight, not including R&D! Sony merged the gaming business with the Vaio business and called it “Networked Products & Services”. From this point on it gets complicated to guess the exact PS3 numbers. However the newly formed division reported a 888 million USD loss for its first year.
This was the year when the new model launched and the PS3 saw a big price cut. This was the time when Sony decided to go after market share instead of profits. Tha vaio-business is way smaller than the Playstation business, so at the very least 500 million USD of those 888 million loss belong to the Playstation, mainly for the PS3. Let’s be very conservative here and say the PS3 only lost 400 million USD.
The year financial ending March 2011 was the very first year the PS3 actually made a profit! The new division posted a 428 million USD profit for the whole year. The Vita was not yet launched and the Vaio business was going strong according to the report. 300 million USD profit for the PS3 is an optimistic guess.
The next year Sony decided to mix the division formed 2 years ago with all the other businesses for consumers (LCD, audio and video, gaming, tablets). Sony reported that this new division started with a breathtaking 2.8 billion USD loss. The report states that there were a lot of impacts that went bad for them (floods in Thailand and decreased sales of Playstation 3 hardware, digital cameras and PCs). Let’s be VERY optimistic and assume that the gaming division did not post a loss, even though the PSN outage cost them 171 million USD and is included in this report.
For the FY 2013 the gaming division is back and called “Game”. Here are the results we have so far:
Q1: 45 million USD loss
Q2: 29 million USD profit
Q3: 53 million USD profit.
= 37 million USD profit in the past 9 months.
So overall we are looking at a total loss of 4 billion USD for the PS3, not including R&D and that is a very optimistic guess. With all the factors I chose to ignore to show you that this is not biased in any way (R&D, PSN Outage, Most of the PS2 / PSP profits) the actual number would be way higher. There are reports that the cell processor alone cost 400 million in R&D, add Blu-Ray, PSN etc. and you get the idea. So a 5-6 billion USD loss for the PS3 is very likely.
So the comeback of the PS3 never really happened. And it did not make any money yet and won’t recoup the money at all. This is not spinning, no trolling just hard facts from the financial reports. This is why I don’t get all these celebrations of Sony and the PS3. Imagine where the Xbox 360 or the Wii would be if Nintendo or MS were willing to take a 5 billion USD loss…
I knew Sony had staggering losses, but I didn’t know it was this bad. Exactly how does Pachter get away with not reporting on any of this?More From Playeressence Call of Duty Black Ops PlayStation Vita Needs Buy Wii U, Get Previous Troll Needs New Marketing Owners eShop Games? Playeressence Original Next Generation News All the Top Gaming News Content & Shows Central, All info here For the day here