Sony Profits, PS2 Sales Slide

Thanks to Gamesindustry.biz for their article discussing Sony's disappointing games division financial results. According to the piece: "Global sales of the PlayStation 2 may well have peaked, with Sony's results for the quarter ended June 30 revealing a steep decline in sales of the console and a drop in overall revenues for the games division of the corporation." The specific news was mixed: "The company sold some 4.59 million PS2s during the quarter last year - this year, however, the figure has dropped off to 2.65 million. As you might expect at this point in the console's life cycle, however, software sales are up - gaining four million units in during the period this year to bring the total to 31 million units."

Comments

Could it be

[Kizzle]

Could it be that *gasp* most people have a ps2 or some other next gen system by now? High sales can't go on forever.

Re:pos hardware

[Riff10111]

I bet 60-75% of those broken PS2's could've been fixed with a CD/DVD cleaner kit. Or, if you're adventureous like me, you can open the lid and clean the lens manually with some rubbing alcohol and a Q-tip. I was getting the disc-read errors constantly, but now it loads like a dream... and I got it about a week after they hit the market.

(note: don't try if it's still under warranty)

A variety of factors

[Rakthar]

First up, the obvious "Boy there sure are a lot of PS2s out there" statement can be thrown into the mix. Most RPG gamers, Sports gamers, and all around game players have a PS2 at this point, so it makes sense that the hardware sales would slow down to a point.

There are two figures being thrown around. That sony's profits dropped 98%, and that Sony's profits dropped 30%. Both are accurate. The 30% figure refers to the games division, and shows that while sales are slightly off, things are still going well. Sony does not make that much money off of each PS2 (though word is that they are no longer selling them for a loss) so the slowdown in base units and increase in software sales were fully expected. The 98% figure refers to Sony as a whole, which includes all their divisions.

Basically Sony's game division is dragged down by the rest of the company, and believe me, Sony is a large company. Japan's still involved in a recession and deflationary conditions, and the Yen has risen strongly against the dollar, cutting into the profits from exports and consumer electronics sold here. So combine a slack marketplace at home, a reduction in profits from your core products due to exchange rate variances(consumer electronics often have razor thin margins to begin with), and a mature product line, and you have a worse quarter than before.

The games division continues to be a bright spot for Sony and continues to help the company stay profitable. It's only a small part in such a large company, but it is a significant one. The games division did have a slightly weaker quarter than before, but I think this can be attributed to exchange rate variance (remember that the PS2s are largely built in asia then shipped over, meaning the real cost of those just went up), less profit per first party game sold (again, exchange rate), and the line-up of third party release.