Sony reduces operating loss at PlayStation division

Sony's game division saw higher revenue on much stronger sales of the PlayStation 3 console during the July to September quarter but the division still recorded a loss during the period, the company said Wednesday.

During the quarter the operating loss was ¥39.5 billion (US$408 million), which was less than half that recorded in the same period last year, while sales rose 10 percent to ¥268 billion.

Red ink was reduced primarily thanks to the better performance of the PlayStation 3. The console is now approaching the second anniversary of its launch and appears to be gaining popularity after a weak start -- but the continuing losses remain a worry for the games unit.

Shipments of the PlayStation 3 during the quarter were 85 percent higher than a year earlier, at 2.4 million units, while software shipments more than doubled to 21.1 million units.

The latest figures put shipments in the first half of Sony's financial year at just under 4 million units. For the year to the end of March 2009 Sony expects to ship 10 million consoles, a target that remains unchanged from its last earnings announcement in July.

Since the beginning of October, "Sales of the 80G-byte version of the PlayStation 3 got off to a good start in Europe and North America ahead of the start of sales in Japan," Sony's chief financial officer Nobuyuki Oneda said at a Tokyo news conference on Wednesday. "As we approach the year-end holiday season we will continue to expand to a wider user base by strengthening our game software line-up and expanding non-game and network content."

Shipments of the PlayStation Portable picked up, rising 23 percent on the same quarter last year to 3.2 million units. Sony launched a new version of the PSP in October in Japan, after the end of the second quarter, so the kick from the launch of that device hasn't yet been recorded. However Sony did revise up its shipment forecast for the full year from 15 million to 16 million units. Shipments of PSP software dropped 6 percent, however.

Sony's previous generation PlayStation 2 continues to sell, especially in emerging markets where the PlayStation 3 is either too expensive for many gamers or not available. During the quarter console shipments were 2.5 million units, down 24 percent on the same period in 2007. Software shipments fell 39 percent for the same period.

Software shipments for the year are expected to be 250 million units across the three products.

Demand for the new PlayStation Network is strong, with the total number of users now past 13 million. Around 5 million of them signed up during the last six months, said Oneda.

IDG News Service

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