When Sony reports its first quarter results this week, good news is expected: the company is widely anticipated to report its first profit in two quarters, following on a 41 billion-yen ($440.33 million) loss for its most recent fiscal year, and a 25.7 billion-yen loss in its first quarter last year. The company's fiscal first quarter ends June 30.
In particular, the company's game segment is expected to show profitability at last, according to a Nikkei report via AFP. Sony has said its reductions in manufacturing cost for the PlayStation 3 have helped reduce losses, and the uptick in the console's user base since the unveiling of the slimlined $299 console have likely improved the company's game business' balance sheet considerably.
In addition to cost reductions and better performance in the game industry, Sony reportedly saw new demand for its digital cameras, video cameras and personal computers, as well as better performance for its LCD TVs and its mobile phone business, the latter of which is also expected to see profitability again after a period of loss.
Sony reportedly cited the launch of its Move control interface add-on for PS3 this September as a growth driver for its sales. The company is also betting big on demand for 3D; its 3D TVs just launched in Japan and will see a global rollout in the coming months, while the PS3 is already ready for 3D gaming via a system software update.
According to the report, investors appear also to be expecting a positive result from Sony this week, as shares rose 1.19 percent on the news.
So it pretty much took them a little more than three years to make a profit on the console? Maybe I'm naive, but it doesn't sound very smart to base your profits on something that takes three years for it to finally sell, especially when your basing it on a technology that was new at the time of launch (in Sony's case, Blu-ray). I mean, in this case Sony lucked out and Blu-Ray is now cheaper, but that's still very risky. hopefully Sony learns it's lesson next generation.
@ Jonathan: Don't forget that they took the same risk with DVD in the last generation and had it pay off tremendously, though. I also assume that, like its sibling PS2, if the PS3 holds out for 10+ years, updating and shrinking its die size accordingly, it could be immensely lucrative in the long run.
What concerns me more, though, is Sony's push for 3D. Yeah, it looks cool, but the price of adoption is so high in this economy, where people also just upgraded to HDTV recently.
@ Jerry: I disagree with your comment that companies are actively trying to make Blu-ray obsolete. Rather, I think they are just creating new technology to be ready for the future (the blue laser project, which spawned Blu-ray and HD DVD actually started in 2003, in DVD's prime). As far as optical media goes, however, I think Blu-ray will be the de facto gold standard for movies, since display resolutions higher than 1080p aren't that meaningful on TV screens, which are relatively small. We'll probably move on for games and data, but I think we're pretty set for movies until Hollywood decides that it's time to have us "double-dip" our movie collections with some newer media.
What concerns me more, though, is Sony's push for 3D. Yeah, it looks cool, but the price of adoption is so high in this economy, where people also just upgraded to HDTV recently.