Sony losing money

Man Whore · 26-07-2005, 07:00 PM

Sony braces for earnings slump
Bloomberg calls most recent quarter for PlayStation maker a wash; analysts blame higher PSP dev costs and sagging sales of TVs.

Bloomberg Business Wire today timidly reported on the likelihood that Sony, scheduled to report its June quarter finances on Thursday, will show a loss for the quarter. If so, the wire service said the loss would be the first time Sony reported consecutive quarter losses in four years.

Analysts polled by Bloomberg see the consumer electronics giant "probably" reporting a 19.4 billion yen ($174 million) loss for the April-June quarter, its second fiscal quarter. Reportedly, the shortfall was driven by higher-than-expected development costs associated with the PlayStation Portable (PSP) and paltry sales of the company's Wega TVs.

In the previous quarter (January-March), the company saw a 56.5 billion yen ($532 million) loss.

Daiwa Asset Management's Yoshinori Nagano told Bloomberg the red ink this quarter would likely be temporary, saying he expected a "recovery in [Sony's] second half," but he declined to say how much of a recovery he expected.

Analysts polled by Bloomberg agreed that Howard Stringer, Sony's new CEO, would need to use the forum of Thursday's earnings call to rally investors and analysts around some of Sony's upcoming breakthroughs, including the PlayStation 3 game console, due before the end of the current fiscal year. Stringer is also expected to weigh in on the current level of industry acceptance behind the Sony-developed Blu-ray DVD format.

At last week's Sony Computer Entertainment's PlayStation Meeting in Tokyo, company president Ken Kutaragi presented an update of the PS3 strategy. As well, Sony gets another chance to strut its business agenda at September's Tokyo Game Show.

Today on the Tokyo exchange, Sony shares traded down slightly.

Grindstone · 26-07-2005, 07:16 PM

Not good. Although I like the Xbox more than PS2, Sony is still a noteworthy company. Most of their products are good, reliable merchandize that I definitely prefer over other brands. I think their namesake is no longer saving them, as Samsung et al., are offering comparable products, some with better features. I wonder if this will force them to cut a few more features from the PS3 in order to save on the projected losses and current pending losses.

Cybergig1 · 26-07-2005, 08:18 PM

They've been prepared for it, Microsoft is in the same boat, they always lose money on the hardware, they'll make it back up in software though. I've read a lot lately about sony looking to scale back just how many different electronics which is a good thing. Better to make fewer good products than just try to make everything there is and end up making junk

Man Whore · 26-07-2005, 08:53 PM

Quote:

Originally Posted by Cybergig1

They've been prepared for it, Microsoft is in the same boat, they always lose money on the hardware, they'll make it back up in software though. I've read a lot lately about sony looking to scale back just how many different electronics which is a good thing. Better to make fewer good products than just try to make everything there is and end up making junk

i also read that sales are way up and microsoft is gaining money from it compare from last year

Cybergig1 · 26-07-2005, 10:59 PM

yeah but rather late in the cycle to make any huge improvements, plus with the whole nvidia fiasco they never really could make money on the hardware even now since they couldn't get the price of those vid cards down for the unit. They'll probably make more money with the Xbox now though for a few good more years before the 360 starts to rake in the Plus side so should be good for them either way. Heck most current gen systems should make all the companies at least some money they have such a huge user base now. Sony's problem is too many of their other areas of business dragging down the ones doing well. They really should dump those "other" things they always talk about lol but oh well not my business they'll learn or they wont

Iron Orta · 27-07-2005, 03:54 AM

Quote:

Originally Posted by Cybergig1

...Sony's problem is too many of their other areas of business dragging down the ones doing well. They really should dump those "other" things they always talk about lol but oh well not my business they'll learn or they wont

for instance when will the UK see the PSP without importing. I mean by the time that hits the shelf we will be seeing the xbox 360 aswell and i no where my money will be going. And with Sony planning on losing alot more money over the manufacture of the PS3, loses at this stage cant be good

Mr.Combine · 27-07-2005, 08:35 PM

Hmm interesting this is quite an early turn out. I really do think that MS'es earning will be very high in terms of the X-360s potential.