Sony profits up, but PS3 down

Mike Bantick
Friday, 26 October 2007 16:21

Your IT - Entertainment

Problems with battery recalls and Blu-ray diode production now behind them, Sony is pumping out shareholder pleasing financials once again.  But PlayStation 3 losses continue to hurt.

Despite a more than doubling of losses from the PlayStation game division, Sony has had a morale boosting huge quarter compared to last year.

Net income soared to 73.7 billion yen for the 30th September quarter end, a huge increase on the 1.7 billion yen from the previous year.

On the game division front, and remembering that all of the following is prior to the release of the cheaper 40GB PS3, but includes the U.S$100 cut made to the sale price of the PS3 in July; Sony notched up number seven in a string of quarterly losses.  The game division loss was 96.7 billon yen.

Sony will undoubtedly continue to bleed in this area as it strives to maintain a market share in the lucrative gaming arena, continuing to slip Blu-ray players into living rooms.  In the long run this strategy could pay off for Sony as Blu-ray permeates into consumer psyche. 

This is a continuation of the trend set by Sony from Q1 this year, when much of the profit rebound was on the back of digital camera and the very popular Sony branded LCD televisions.

The company maintained the expected 5 percent operating margin (proportion of sales after deduction of manufacturing and operating costs).  By comparison, rival Nintendo announced at 27 percent operating margin earlier in the week