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Sony Computer Entertainment 2011 Fiscal Report : Deficit Over 94.7 Billion Yen

spwolf

Member
Sony has been saying that the gaming business has been profitable for the past two years, they have re-focused the whole comnpany around gaming, digital imaging and mobile. Those are the three pillars for the future because right now they are the healthy divisions within Sony.
Also:

http://www.sony.net/SonyInfo/IR/financial/fr/11q4_sony.pdf

CPS (the division which includes both TVs and games) posted an operating loss of 230 billion yen for the 2011 FY. This loss includes a one time charge of 63.4 billion yen for bailing out of Sony-Samsung LCD, an other 16.7 billion loss for LCD television asset impairment and a 12.6 billion yen loss related to the PSN hack.
If you take out the one-time charges related to the TV business we're left with a 150 billion yen less. Then there are the losses of TVs sold at a loss and other electronic unprofitable products.
Basically this report would imply that the gaming division is the major money losing division here so I'm not sure what we're talking about.

Sony lost more than 2 billion due to tsunami, thailand floods and high yen. If not for that, they would have made profit last year. They also had huge asset writeoff.

Regardless, Sony still needs to make more money on their revenues. Their operating margins have to be at least 5%, which is why they are trying to accomplish.
 

2MF

Member
http://www.sony.net/SonyInfo/IR/financial/fr/viewer/strategy/2012/

14_image.jpg


Gaming business was profitable in FY 2011.
They're also targeting huge growth for the coming years.

I wonder if "operating" income is the key distinction here. Hard to say without being able to understand a thing in the OP's image.
 

apana

Member
I think a question we should ask ourselves is: Does gaming need a chaperone?

Do we need a Sony or a Microsoft to tell us which games we're allowed to play and how much we should pay to play them and on what box sitting under the TV?

Or is the future of gaming simply a platform we log into on multiple devices, with prices and release dates set by the developers and publishers and conversely by the market?

Yes
 

Stop It

Perfectly able to grasp the inherent value of the fishing game.
i1qm6hxB15fGp.gif



I would say that the smiling guy in the middle represents most of GAF with Sony's current prediciment. As screwed up as Sonys current position is, and its their own fault for their mismanagement, i just don't understand the thought process that goes into being joyful when a company is having misfortunes. Out of all the sites/forums i go to, nothing is like GAF with the blatant, and continuous bashing of Sony...i just dont get it, but oh well it is what it is.

I would more think the 2 in front are Sony and Nintendo respectively after their recent losses, and the guy smiling in the background is Microsoft.

As it stands, both Sony and Nintendo are bleeding money, and frankly, the console market isn't exactly looking like a growth market in the future. it's not looking good for either of them, which is a big shame.

@Elios83 The picture you sourced states operating income, which, while it shows gaming is making a small operating profit, doesn't mean the division is profitable once debt payments & other charges are taking into account. As that shows, the division is barely making an operating profit, and clearly underling profits are in ().
 

2+2=5

The Amiga Brotherhood
What a bad situation...
Are 1b$(if true) really necessary for the ps4 cpu's r&d? In a difficult situation like this one wouldn't be better to take an already existent cpu and make as less customizations as possibile?
 
I would more think the 2 in front are Sony and Nintendo respectively after their recent losses, and the guy smiling in the background is Microsoft.

As it stands, both Sony and Nintendo are bleeding money, and frankly, the console market isn't exactly looking like a growth market in the future. it's not looking good for either of them, which is a big shame.

Nintendo is not 'bleeding money'.
 

Elios83

Member
@Elios83 That's operating income, which, while it shows gaming is making a small operating profit, doesn't mean the division is profitable once debt payments & other charges are taking into account. As that shows, the division is barely making an operating profit, and clearly underling profits are in ().

Indeed, there are other charges (for example the PSN Hack loss) which are not included in the operating income, but that shows the gaming business is actually making money.
Most of Sony's losses are due to deferred taxes losses, they're not even at a cash flow level.
So well, people are jumping the gun on things that are not so easy.....and the general message is misleading, Sony has refocused the whole company around games because they consider it to be a healthy business atm, they're making money selling consoles and games.
 

bh7812

Banned
Wow crazy are we even going to see a PS4?

Yeah I think that's one of the big questions people should be asking right now for sure. I'm not gonna sit here and pretend to be some company portfolio expert/analyst, I'm far from that. But what I will say is it sure doesn't take a rocket scientist for anyone to see this company is in MAJOR trouble period. It's just been one thing after another for Sony this time around, much of it not good news. First the initial high price for the PS3, then that PSN hacking last year..I mean they had to re-build practically that entire network after that which can't be cheap! And this year, they're dealing with Vita which is not getting off to as grand a start as I'm sure they would have liked.

As for the issue of PS4..I've read the rumored specs flying around but I honestly and truly believe it's just conceptual stuff at this point. What they'd LIKE to do. The reality though is, with this huge of a financial mess on their hands I don't believe they can afford to do a PS4. At least not a full blown successor to the PS3. What I do believe is at some point they were planning to do a traditional PS3 successor but especially after that PSN hacking they likely had to spend quite a bit of the development money that would have gone towards a PS4 to fix that. After that it's very possible they were faced with a tough choice..either dig in and go ahead with full PS4 development as planned or develop out the Vita. They chose Vita and I wouldn't be surprised if that is as close to a PS4 as we're going to get for the forseeable future. It's probably a miracle Vita even saw the light of day if all of this really is as bad as it appears to be.

This next time around coming up is...starting to potentially look very different from what even I was expecting let alone what a lot of people thought. That's not really something to expand on in this thread though. What I'll say about that here is people may need to brace themselves for a possibly couple pretty large shocks.

If I were Sony right now, a potential PS4 or PS4 development would more than likely be the last thing on my mind. I'd be focusing on making sure PS3 goes out with a huge bang and focusing on helping Vita really get on it's feet and grow that out. They're damned no matter what they do right now. As the saying goes "Damned if you do, damned if you don't." Right now the safest bet for them would be focus on PS3 and Vita..there's no real other options for the gaming division and that's the reality. Also focus on giving themselves as much of a chance as possible to survive and recover from this..massively huge mess.

And if it comes down to the gaming division and the Playstation brand disappearing, I think what people need to look at is that brand has been lucky and lasted many times longer than a lot of brands have. Some last only a year or two, some are literally overnight here today and gone tomorrow brands. The Playstation brand has lasted 15 years though and I think that's what people need to be looking at-what they've accomplished in that time and be grateful for it.

I just don't see their mess clearing up anytime soon. Certainly not tomorrow or next week. If they pull through it, we're probably talking several years long haul. Maybe once they pull through this, in several years something like a PS4 can be a reality. Right now it needs to be about seeing the PS3 to the end of it's lifespan, growing out Vita, and finding effective ways to get through their troubles. You deal with a financial mess first, not developing a grand PS4. They simply can't afford it right now. To develop a PS4 and THEN deal with the financial mess would be unwise to say the least.
 

Stop It

Perfectly able to grasp the inherent value of the fishing game.
Nintendo is not 'bleeding money'.
They're losing money and are facing a very difficult market, whether you call a it "just a flesh wound" or whatever is up to you.

Indeed, there are other charges (for example the PSN Hack loss) which are not included in the operating income, but that shows the gaming business is actually making money.
Most of Sony's losses are due to deferred taxes losses, they're not even at a cash flow level.
So well, people are jumping the gun on things that are not so easy.....and the general message is misleading, Sony has refocused the whole company around games because they consider it to be a healthy business atm, they're making money selling consoles and games.
Well, Sony have re-asserted their commitment to gaming based on internal sales targets (like Vita HW sales) that may well be overly optimistic. I hope that they stay on that path but continued troubles for Vita + an uncertain future of consoles past PS3 means that Sony need to make sure that focus is strong and results in market leading products.
 
@Elios83 The picture you sourced states operating income, which, while it shows gaming is making a small operating profit, doesn't mean the division is profitable once debt payments & other charges are taking into account. As that shows, the division is barely making an operating profit, and clearly underling profits are in ().
But the OP picture states they're making an operating loss... thus the discrepancy.

Sales - ¥532,070M
COGS - ¥530,574M
SG&A - ¥75,743M
Operating profit (loss) - (¥74,247M)

It's all japanese and I can't read it, but basically the 94 billion yen loss includes one time charges, PSN hack, deferred taxes liabilities, so the net result is negative.
But the operating income is positive = they are currently making money by selling consoles and games.
The OP isn't about Sony Corp or even the CPS division. It appears to be solely for SCE.
 

Taurus

Member
Three things we have learned from this thread:

1. Vita is succesful

2. Nintendo is bleeding money

3. Sony is too big to go under

whatswrong.gif
 
If sony is closer to the wii u in power than the 720 wouldn't that make microsoft the odd man out in terms of 3rd party porting? Although I suspect in reality that would just really fracture the market and make a larger japan vs. West divide with japanese publishers and audience supporting wii u and ps4 and western developers supporting 720 and pc. Ignoring handhelds obviously.
In this scenario, I'd imagine the 720/PC would ultimately be the lead platform and the games would be ported down.
 

volturnus

Banned
Three things we have learned from this thread:

1. Vita is succesful

2. Nintendo is bleeding money

3. Sony is too big to go under

http://i774.photobucket.com/albums/yy27/binarymorphine/whatswrong.gif [/QUOTE]
Well, I'm sure a company with 150,000 employees around the world wouldn't go down so easily.
 

Elios83

Member
But the OP picture states they're making an operating loss... thus the discrepancy.

It's all japanese and I can't read it, but basically the 94 billion yen loss includes one time charges, PSN hack, deferred taxes liabilities, so the net result is negative.
But the operating income is positive = they are currently making money by selling consoles and games.
 
They're losing money and are facing a very difficult market, whether you call a it "just a flesh wound" or whatever is up to you.

They lost money after taking actions - bleeding money implies its not stopping any time soon.
They got a bloody nose; they've since moved on from this.

Sony have been 'bleeding money' for years now as they've shown no sign of recovery or any change in strategy to really counter this.
 

Stop It

Perfectly able to grasp the inherent value of the fishing game.
They lost money after taking actions - bleeding money implies its not stopping any time soon.
They got a bloody nose; they've since moved on from this.

Sony have been 'bleeding money' for years now as they've shown no sign of recovery or any change in strategy to really counter this.
They have moved on indeed, and are on the way to another product launch, the WiiU. If that doesn't take off as Nintendo expects, they will be in trouble. In all honesty, I expect them to return to modest profitability in the next few years, but nothing like pulling the figures that DS/Wii made for them.

As for Sony? They have a lot of problems to work themselves out of and need to be very careful. Anyway, no company is too big to fail, and I hope Sony do find their way out of their current troubles but it'll be a long hard road at best.
 
Yeah I think that's one of the big questions people should be asking right now for sure. I'm not gonna sit here and pretend to be some company portfolio expert/analyst, I'm far from that. But what I will say is it sure doesn't take a rocket scientist for anyone to see this company is in MAJOR trouble period. It's just been one thing after another for Sony this time around, much of it not good news. First the initial high price for the PS3, then that PSN hacking last year..I mean they had to re-build practically that entire network after that which can't be cheap! And this year, they're dealing with Vita which is not getting off to as grand a start as I'm sure they would have liked.

As for the issue of PS4..I've read the rumored specs flying around but I honestly and truly believe it's just conceptual stuff at this point. What they'd LIKE to do. The reality though is, with this huge of a financial mess on their hands I don't believe they can afford to do a PS4. At least not a full blown successor to the PS3. What I do believe is at some point they were planning to do a traditional PS3 successor but especially after that PSN hacking they likely had to spend quite a bit of the development money that would have gone towards a PS4 to fix that. After that it's very possible they were faced with a tough choice..either dig in and go ahead with full PS4 development as planned or develop out the Vita. They chose Vita and I wouldn't be surprised if that is as close to a PS4 as we're going to get for the forseeable future. It's probably a miracle Vita even saw the light of day if all of this really is as bad as it appears to be.

This next time around coming up is...starting to potentially look very different from what even I was expecting let alone what a lot of people thought. That's not really something to expand on in this thread though. What I'll say about that here is people may need to brace themselves for a possibly couple pretty large shocks.

If I were Sony right now, a potential PS4 or PS4 development would more than likely be the last thing on my mind. I'd be focusing on making sure PS3 goes out with a huge bang and focusing on helping Vita really get on it's feet and grow that out. They're damned no matter what they do right now. As the saying goes "Damned if you do, damned if you don't." Right now the safest bet for them would be focus on PS3 and Vita..there's no real other options for the gaming division and that's the reality. Also focus on giving themselves as much of a chance as possible to survive and recover from this..massively huge mess.

And if it comes down to the gaming division and the Playstation brand disappearing, I think what people need to look at is that brand has been lucky and lasted many times longer than a lot of brands have. Some last only a year or two, some are literally overnight here today and gone tomorrow brands. The Playstation brand has lasted 15 years though and I think that's what people need to be looking at-what they've accomplished in that time and be grateful for it.

I just don't see their mess clearing up anytime soon. Certainly not tomorrow or next week. If they pull through it, we're probably talking several years long haul. Maybe once they pull through this, in several years something like a PS4 can be a reality. Right now it needs to be about seeing the PS3 to the end of it's lifespan, growing out Vita, and finding effective ways to get through their troubles. You deal with a financial mess first, not developing a grand PS4. They simply can't afford it right now. To develop a PS4 and THEN deal with the financial mess would be unwise to say the least.

Thats a nice essay you wrote, but its not really a question at all at this point. Developers have hardware and are making games already.

If anything people are overacting to a source that no one even understands. Sony's reports are PD:

http://www.sony.net/SonyInfo/IR/financial/fr/index.html

The numbers don't add up at all, the game division(SCE) has been profitable for a few quarters now. If anything this is nothing we didn't already know. We know sony is making a PS3 successor, we know the parent company is taking hits and the profitable games business might be a good place to hide some losses in, etc.
 

z0m3le

Banned
They have moved on indeed, and are on the way to another product launch, the WiiU. If that doesn't take off as Nintendo expects, they will be in trouble. In all honesty, I expect them to return to modest profitability in the next few years, but nothing like pulling the figures that DS/Wii made for them.

As for Sony? They have a lot of problems to work themselves out of and need to be very careful. Anyway, no company is too big to fail, and I hope Sony do find their way out of their current troubles but it'll be a long hard road at best.

Well opinions aside, if Sony can't produce a ps4, that leaves the door wide open for Microsoft and Nintendo to sell 60m units each at the minimum, and since they target different markets for the most part, there is even more room for growth, having said that, ps3 could have very long legs if devs target Wii u with their ports, the problem there is do devs ignore the 360 that is super easy to port to from ps3, and how does that effect xb3.
 

Road

Member
Sony F4Q11 Results Earnings Call Transcript (May 10,2012)
Next is the game business

Operating income decreased year-on-year, due to the impact of the sales decline and an asset impairment in the network service business.Game Business Operating Income (FY10 + FY11) ~ 60 Billion Yen

Yeah, I'm curious about the difference between "Game Business" and "Sony Computer Entertainment". Not only there's a difference between claimed profitability, their reported sales are also very different: 530 billion yen for SCE (in this PDF) against 740 billion yen for the "Game Business" (p23 here).

Does anyone have previous similar reports for SCE?


FY11 - Game

14_image.jpg

As for this image, it seems merely illustrative, seeing numbers don't match anything.
 

2MF

Member
I would more think the 2 in front are Sony and Nintendo respectively after their recent losses, and the guy smiling in the background is Microsoft.

As it stands, both Sony and Nintendo are bleeding money

The difference is that Nintendo is a small and nimble company that can survive for many many years even in the worst market possible, while Sony is an outdated behemoth that actually has a chance of going out of business or turning into a shell of its former self in the medium-term...
 

see5harp

Member
Three things we have learned from this thread:

1. Vita is succesful

2. Nintendo is bleeding money

3. Sony is too big to go under

whatswrong.gif

Seriously. I read the Vita was successful and I had to wonder how anyone would have that impression at this point in time.
 
This is sad but equally sad that it's not a shock. The company is so fractured, simple example. The Europe Vita can download all mini and PSP game directly to through PSN, if you have a US PSN account you have to munaully transfer it from the PS3, Europe also has been having major sales for the Vita while SCEA won't acknowledge the existence of the Vita. How does such a thing even happen? You couldn't imagine a company like Apple do that, which is so unified.

Hopefully they have less managers and they badly need to cut and trim.
 
Yeah, I'm curious about the difference between "Game Business" and "Sony Computer Entertainment". Not only there's a difference between claimed profitability, their reported sales are also very different: 530 billion yen for SCE (in this PDF) against 740 billion yen for the "Game Business" (p23 here).

Does anyone have previous similar reports for SCE?
I didn't realise they separated out the CPS sales into categories.

Tried to see if there were any archives for the site where the PDF derives, but there don't seem to be any.

The only other thing I can think of is SOE might be generating the difference... but that seems unlikely.
As for this image, it seems merely illustrative, seeing numbers don't match anything.
Wtf, Sony.
 
This is sad but equally sad that it's not a shock. The company is so fractured, simple example. The Europe Vita can download all mini and PSP game directly to through PSN, if you have a US PSN account you have to munaully transfer it from the PS3, Europe also has been having major sales for the Vita while SCEA won't acknowledge the existence of the Vita. How does such a thing even happen? You couldn't imagine a company like Apple do that, which is so unified.

Hopefully they have less managers and they badly need to cut and trim.

Question, did you do anything besides read the thread title and post?
 

Road

Member
I didn't realise they separated out the CPS sales into categories.

Tried to see if there were any archives for the site where the PDF derives, but there don't seem to be any.

The only other thing I can think of is SOE might be generating the difference... but that seems unlikely.

I forgot about SOE. It could be the difference indeed, if they are not a part of SCE.
 

Globox_82

Banned
Not trolling since I love PS, don't care about the other two. However wouldn't be better for Sony if they moved 3rd party at this point? I am sure their IPs would sell even better on 360 and PS fanbase would migrate there as well.

Losing this much money, makes no sense anymore imo.
 
Not trolling since I love PS, don't care about the other two. However wouldn't be better for Sony if they moved 3rd party at this point? I am sure their IPs would sell even better on 360 and PS fanbase would migrate there as well.

Losing this much money, makes no sense anymore imo.

They're not losing money because of the video game business, hell, that's the main reason they haven't folded already
 
Not trolling since I love PS, don't care about the other two. However wouldn't be better for Sony if they moved 3rd party at this point? I am sure their IPs would sell even better on 360 and PS fanbase would migrate there as well.

Losing this much money, makes no sense anymore imo.

If they are actually losing money then maybe I guess.
 
I saw someone in this thread say Sony is yet to make a penny of profit off the PS3 after you factor in R&D and all that? That sounds bizarre. Is that real?
 

goldenpp72

Member
I'm not sure why a few people have mentioned Nintendo and Sony merging, that seems really unlikely to me. Nintendo seems to want to stay smaller and focused, at least when they take losses you can usually see the point where they will rebound. Sony is a HUGE company with their hands in so many areas that Nintendo likely does not care about. The only thing I could see happening is the potential of MS absorbing some of them in order to have the PS branding and first parties (which would aid them everywhere not called America and the UK)

Even that is really unlikely though, while Sony may rebound and hit a stride again, I don't really see either of the 2 other console companies getting too involved here, not with Sony as a whole, but maybe if Sony were to decide to sell off specific brands and divisions.
 
Out of curiosity, how long after launch did it take Sony to admit that PS3 was selling below expectations? I'm actually kind of impressed that they've maintained the facade of denial around Vita as long as they have.

After launch Sony stated they would sell 6 million by end of fiscal year 2006. They didn't even hit half that and blamed it on hardware shortages even though the system was on sale everywhere.
 

kuroshiki

Member
But your logic is based on old timey trends. In 10 years the "console" space will look nothing like it does now. It will take considerable amounts of money, but it's wide open for others to break through. Google, Apple, Samsung, OnLive, Amazon, Steam, Netflix...These are just some of the potential contenders.

If the games industry is anything, it's unpredictable.


Apple doesn't even make its own game for its own market. What makes you think it will make dedicated console? Also, Google? They can't even get their OS fragmentation shit together, and they have zero hardware know-how.

Samsung will never, ever enter proprietary hardware market. They have zero interest in that. Their next target is imaging area, not gaming.

The console market is not some traditional market that you can think of. Traditional model was selling hardware at loss, getting money back by software loyalty. It will take TREMENDOUS loss at first, guaranteed.

If anything company who wants to go to gaming would probably will go either browser social gaming or mobile gaming.
 

StevieP

Banned
Not trolling since I love Sega, don't care about the other three. However wouldn't be better for Sega if they moved 3rd party at this point? I am sure their IPs would sell even better on Xbox and Sega's fanbase would migrate there as well.

Losing this much money, makes no sense anymore imo.

Made that slightly relevant, there
 

Orin GA

I wish I could hat you to death
With 18 billion dollars is debt there is no need to hold back! PS4 to be 10 times as powerful as the PS3. Make it happen Sony.
 
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