Sony and Nintendo reporting losses

From IGN

For its first quarter ended June 30, 2005, Sony Corporation reports a net loss of 7.3 billion yen ($65.2 million), compared to a profit of 23.3 billion yen in the same period last year. The company saw sales of 1.56 trillion yen ($13.9 billion), a 3.3% drop from last year\'s 1.61 trillion yen.



The company cites quickly-dropping television prices, as well as major restructuring costs, in explaining its low earnings. More significantly, Sony is now projecting yearly net income of 10 billion yen ($89.3 million), a drastic reduction from the 80 billion yen ($714 million) forecast in April.

Looking at Sony\'s game division, the picture\'s a bit more cheerful. That division saw sales of 172.8 billion yen ($1.54 billion), a 64% increase from last year. However, the group also saw a 5.9 billion yen ($52.7 million) operating loss -- attributed to marketing and research -- compared to last year\'s 2.9 billion yen.

Brisk hardware performance explains the game division\'s bustling sales numbers. The PlayStation Portable, Sony\'s spunky newcomer, sold 2.09 million units worldwide, while the PlayStation 2 sold 3.53 million units -- nearly five times as many as last year.

Foreigner Howard Stringer (a dual British-American citizen) stepped in as chairman of Sony in March. Stringer has said he plans major cost cuts at the company, which faces increasing competition from the likes Samsung and Apple. Stringer plans to unveil a turnaround plan in September.

Nintendo announced its first-quarter earnings on Thursday, showing a 78.5% decline in operating profit compared to last year. The company cites low margins on its hardware as well as higher development costs as the primary reasons for the slump.


For Nintendo\'s April through June quarter, the company saw operating profit of 3.75 billion yen ($33.35 million), down from 17.47 billion yen in the same period last year. The company reports net profit of 14.12 billion yen ($125.6 million) compared to last year\'s net profit of 22.64 billion yen.


While the Nintendo DS has sold well -- the company reports 1.38 million in the first quarter -- Nintendo sees little profit margin on hardware compared to software titles. The company\'s next big software hit will almost certainly be the new Legend of Zelda title, expected to reach stores this holiday season.

The sales strength of the Nintendo DS contrasts with falling Game Boy Advance sales: the older hardware saw 980,000 units sold in the first quarter, compared to 2.32 million in the same period last year. Similarly, GameCube sales dropped to 260,000 units, compared to 650,000 in last year\'s first quarter.

With Zelda in mind, Nintendo still expects its full-year operating profit to rise to 115 billion yen, or 3.1% above last year.

Seeing this now I wonder if companies and software houses will be able to make profits easily the next generation.

It seems that the higher cost of development, and increase of staff needed to develop games will cause a hard time for companies.

Even if games sell better than previously it wont necessarilly mean increase of profits if costs raise at a higher margin

[Living-In-Clip]

That is why you raise prices of games.

[§ôµÏG®ïñD]

and pirate ehhh buy them more..






buy your games children "shakes fist"

i havent bought a game since katamari
before that was...i dont remember.  madden 2005 maybe?

would rather rent
been thinking about getting a gamefly subsciption, but not enough games lately to interest me

Originally posted by §ôµÏG®ïñD
and pirate ehhh buy them more..






buy your games children "shakes fist"

hehe good point.

Actually, of Sony, EA and Nintendo, Nintendo is the only one who turned a profit this quarter.

The company reports net profit of 14.12 billion yen ($125.6 million) compared to last year\'s net profit of 22.64 billion yen.

It was just less profit than this quarter, last year.

Nintendo 0wns j00.

-Dan

That depends.Not 100% informative

They\'re making less profit than last year ?

Ow.. big deal ! Ask many unemployed ppl how happy they are....

I took your advice this morning and asked around.

Many unemployed people say they\'re happy enough for now, and hoping something turns up for them. They also said hi.

Some of them were hungry.

-Dan

Originally posted by Eiksirf
I took your advice this morning and asked around.

Many unemployed people say they\'re happy enough for now, and hoping something turns up for them. They also said hi.

Some of them were hungry.

-Dan

Ah ! Nice of them to greet me  

Well, see....they haven\'t got much atm being unemployed, yet they\'re relatively happy.

Big CEO\'s have loadsa cash. When profits are a bit less in some year, they\'re very upset.

That\'s kind of the comparison i\'m trying to show here.

Seriously ; this is logical. current gen is on it\'s last legs ; which means less mainstream sales.