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Weak PlayStation Hardware Sales Douse Sony’s Game Division In Red Ink

Sony's Game division reported a $45m operating loss this morning for the first quarter ended June 30, 2012, due primarily to a significant year-over-year decline in sales for all of their PlayStation systems.

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Sony’s Game division reported a $45m operating loss this morning for the first quarter ended June 30, 2012, due primarily to a significant year-over-year decline in sales for all of their PlayStation systems.

The company’s official explanation as to why the Game division’s revenue plummeted 14.5% over the same period last year places the bulk of the blame on decreased PlayStation Portable (PSP) and PlayStation 3 (PS3) sales, made worse by the continued strengthening of the Japanese Yen. Sony claims that the declining hardware sales were “partially offset” by PlayStation Vita sales, although the limited unit sales data provided in the report doesn’t completely jive with that assertion.

In the past Sony has traditionally reported separate sales data for each of their platforms, however, in this quarter the reporting method was changed so that only combined hardware sales data was made public.

The numbers reported show that the PS3 and PS2 combined shipments totaled 2.8 million units worldwide during the first quarter, down from 3.2 million combined during the same period in the prior year. On the handheld side, Sony’s PSP and PS Vita combined for 1.4 million units shipped worldwide. This number is down significantly from the 1.8 million PSP units that were shipped in the prior year, before the launch of the PlayStation Vita.

It’s also important to note that these numbers only represent shipments to retailers, and do not reflect how many units were actually sold through to consumers. The change in reporting makes it impossible to say exactly how well the Vita is preforming, but it seems pretty clear that any “offset” in revenue that the Vita provided was minimal at best.

Software sales were also on the decline across all PlayStation platforms with the the PS3/PS2 combining for 20.1 million units (down from 27.6 million units same quarter last year), and the PS Vita/PSP totaling 5.8 million units (down from 6.6 million units same quarter last year).

Overall, Sony reported net revenues of ¥1.5 trillion ($19.18b) for the quarter, up 1.4% year-over-year. Net losses totaled ¥24.6 billion ($312m), up substantially from the ¥15.5 billion net loss in the first quarter of the prior year.

Source: Sony (pdf), Sony presentation slides (PDF)

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