Sony announced their financial results for the third quarter (which ended December 31, 2012) this morning, revealing a 15% drop in revenue from their Games division, due mainly to declining sales of the PlayStation 3 and the “slow penetration” of the Vita.
Specific sales of Sony’s hardware were not revealed (the company changed their reporting practices last year and now only report combined hardware unit sales), however, they did note that 2.7 million PSP and Vita units were shipped worldwide during the third quarter. This is up slightly from a combined 2.4 million during the same quarter in the prior fiscal year, however, it is important to note that the Vita was only available in Japan for two weeks during that reporting period. The weak sales caused Sony to cut their full year PSP/Vita shipment forecasts to just 7.0 million units worldwide.
To better understand just how disappointing this has been to the company, Sony originally projected in May 2012 that they would ship 16 million PSP/Vita units during the current year. This number was cut to 12 million in August, and then again to 10 million last November. Today’s new projection of 7 million units represents about 43% of the original number of PSP/Vita systems that the company planned to ship to retailers during the current fiscal year.
Sony stated in their presentation materials that they plan to correct the Vita’s slow growth with a strong software line-up.
Combined sales of the PlayStation 3 and PS2 totaled 6.8 million for the third quarter and are projected to hit 16 million for the full fiscal year. This is down from 7.4 million in the same quarter in the prior year, and 18 million during the full fiscal year 2011. Considering the drop in sales — and the fact that Sony has already stopped production of the PS2 — this would seem to all but confirm that the PlayStation 4 will be announced later this month.
For the third quarter ended December 31, 2012, Sony’s Games division posted sales of ¥268.5 billion ($2.86 billion), down 15% year-on-year — 18% on a constant currency basis. Operating income fell 86% from ¥33.8 billion in the prior year to ¥4.6 billion ($49 million).[Update] According to a Seeking Alpha transcript, Sony CFO Masaru Kato added the following comments about the Vita during the company’s earnings call:
“One thing clear for us that in terms of profitability – we have to do a better job in promoting the PlayStation Vita mobile product.”
“How do we do that? Well, gaming business software is the name of the game. So as a fundamental measure, we are putting a lot of resources, not just first party, but also asking third parties to put out more attractive software. That’s the basics.”
“The other things – marketing, pricing of the product etc, I cannot talk about pricing of this platform. But those are the things that we are looking into to improve our profitability in the mobile handheld gaming business.”