Sony Computer Entertainment Records 20% Drop In Revenue News
Jon Wilcox
26/10/2006
Following recent forecast revisions, Sony Corporation releases its financial results for the second quarter...
Sony Corporation has today released its financial results for the second quarter in the 2006/07 fiscal year, days after it issued a revision of its forecasts.
Whilst news of an 8.3% increase in sales and operating revenue from 1,711.6 billion Yen (£7.65 billion) in Q2 2005 to 1,854.2 billion Yen (£8.29 billion) is promising, the reversal of fortunes in both the company's operating and net income shows the underlying problems.
From a Q2 2005 operating income of 74.6 billion Yen (£333.3 million), Sony Corporation has today registered an operating loss of 20.8 billion Yen (£92.9 million), whilst it's net income faired even worse: dropping 94.1% from 28.5 billion Yen (£127.3 million) to just 1.7 billion Yen (£7.6 million). The dramatic drop is being blamed on the global battery recall of certain notebooks and the high start-up costs of PlayStation3.
Looking specifically at the company's Game segment, Sony confirmed a drop in sales and operating revenues of 20.5%, down from 214.2 billion Yen (£957.1 million) to 170.3 billion Yen (£760.8 million) on the year. Sony Computer Entertainment also confirmed an operating loss of 43.5 billion Yen (£194.3 million), down from an operating income of 8.2 billion Yen (£36.6 million) in Q2 2005.
A drop in sales of both PlayStation2 and PSP hardware, together with the continued launch preparations for PlayStation3 has been identified as key to SCE's results. There's also been an increase in PSP game sales, however this has been countered by a reduction in sales of PlayStation2 software.
Putting today's results into perspective allows you to see exactly how much Sony Corporation has riding on the success of PlayStation3 in the coming years.
We'll have more news shortly...