Follow up to earlier blog post...
Sony managed to pull out another profitable quarter despite poor results from its games division.
Sony Computer Entertainment's sales rose by over 42% in the quarter on the back of a strong PSP lineup. Despite the rise in sales, the division lost $845 million, its seventh consecutive losing quarter.
The loses did not affect Sony's bottom line however as the company posted an operating profit of $450 billion for the year to March, 2% higher than a year ago. Net profit also soared this quarter up 12.3%, which was a new record for the quarter.
Nintendo raised its yearly outlook as its April-September operating profit nearly tripled. Their profits were up 144% from a year earlier on the back of strong DS and Wii sales.
Microsoft will report their quarterly earnings later today. The company hopes that Halo 3 will lift the games group to their first profitable quarter since Halo 2 shipped in 2004.
Analysis:
Sony has to ride out this dry period and hope that their recent price cuts can boost Holiday sales. By cutting the price of the Playstation 3 hardware, the comapany shows that that they are willing sacrifices losses this year to gain a greater marker share, and eventual profitability for their games group.
Although the games division is posting negative numbers, the rest of the company is stepping up to support it, posting profits across the board.
Sony should be confident this Holiday. They have a great lineup including Guitar Hero 3, Rachet and Clank, and Uncharted which could lead to strong software sales, which should in turn lead to stronger hardware sales.
It's imporant that the Playstation 3 succeeds. The console is Sony's opportunity to put a media device in the living room of every household, and by including Blu-ray in every console, they hope to be the standard format for next-generation high-definition movies