It sounds like PlayStation 4 has been and will be a more profitable piece of hardware for Sony than PlayStation 3.
“Unlike PS3, we are not planning a major loss to be incurred with the launch of PS4,” said Sony CFO Masaru Kato during an earnings call that ended moments ago.
“At the time we developed PS3, we made a lot of in-house investments to develop the chip, the Cell chip. Development of the chip saw the silicon processing and all the facilities invested by us ourselves. But this time, yes we have a team working on chip development, but we already have existing technology to incorporate and also product investment and all the facilities will now be invested by our partners, other foundries, so we don’t have to make all the investment in-house.”
Sony didn’t offer a sales forecast for PS4 for the year ending 31st March 2014, nor did anyone ask – the fools!
Sony turned a profit a year after a record loss – not a bad result for Kaz Hirai’s first year in charge. He didn’t necessarily work miracles, but he did reorganise and streamline the company, cutting thousands of jobs and getting back to black by selling expensive office buildings in Japan and America, plus Sony’s stakes in DeNA and M3 holdings. Doing so enabled Sony to splash out and acquire Gaikai last summer.
Sony’s annual profit was 43 billion yen ($458 million) – roughly what was expected.
In the Game segment, sales were down 12.2 per cent and operating income down 94 per cent to $18 million, whoopsie daisy.
Combined PS3 and PS2 sales were down to 16.5 million from 18 million the year before, whereas combined PSP and Vita sales raised a whisker to 7 million from 6.8 million the year before. But a PS Vita price cut in Japan undermined the extra sales, bringing in less money for Sony.
In the year ahead, “Sales are expected to increase significantly,” Kato said, “primarily due to the planned introduction of the PlayStation 4 in the fiscal year ending 31st March 2014.
“Operating income,” however, “is expected to be essentially flat year-on-year primarily due to an increase in research and development expenses and marketing expenses related to the introduction of the PS4, offset by the impact of the above-mentioned increase in sales.”
Sony expects PS3 to sell 10 million units this financial year – a figure I can confidently report because PS2 sales have been removed from the year-ahead forecast.
Sony believes a combined 5 million PSP and PS Vita units will be sold this financial year, which is considerably down on this year – not a good sign for Vita.
Nevertheless, smartphone sales were up for Sony, and continuing to turn those around, plus transforming TV sales, was described as “a must” for the company this year. The other segments are relatively stable by comparison.
A positive step for Sony, then, which is now a more lean, mean, profitable machine.