Financial results

Dillweedshake · 10-29-2006, 12:17 AM

Quote:

Sony is in trouble. Its earnings plummeted 94 percent to $14.4 million because of costs related to its laptop battery recall. But it also reported a $369 million operating loss in its video game business because of start-up costs for the PlayStation 3. Sony's game revenues decreased 20 percent to $1.4 billion from a year ago because of a decline in PlayStation Portable and PlayStation 2 sales, as well as a price cut on the PS 2. Sony sold 5 million PS 2s worldwide in the quarter and 3.89 million PSPs. Sony is sitting on a lot of inventory now related to PS 3 components. It's nail-biting time in Tokyo. Sony has $4.7 billion in cash, and $3 billion in short-term debt and current long-term debt.

In Redmond, things are looking brighter for Microsoft. The company has $31.8 billion in cash. That's a substantial war chest. Sales rose 70 percent in the Entertainment and Devices division, which includes games, to $1.03 billion in the quarter. The division cut its loss from $173 million a year ago to $96 million. Microsoft says it is on target to hit profitability by the fiscal year that ends June 30, 2008. That's a long way away, but the company is making some progress.

Nintendo reported sales of $2.5 billion, up 69 percent from a year earlier. Net income was $458.6 million, up from a loss a year ago. Nintendo has $6.6 billion in cash. Nintendo is forecasting sales of $6.2 billion and profits of $843 million for the year ended March 31, 2007. The company boosted its prediction of annual sales of DS units from 17 million to 20 million units worldwide. Nintendo also increased its GameBoy Advance sales forecast from 2.5 million to 3.3 million units worldwide.

**Cyguration** · 10-29-2006, 05:24 AM

No big surprise there. Nintendo had the least cost reliant scheme going into the "next-generation" phase. So even if the Wii doesn't do so great they'll have financial rebounds from the DS and GBA.

Maybe the ditch Sony is digging for itself will reach the point where they'll climb out and realize that the ditch only gets deeper when they act smug to everyone. MS wisened up big time...especially for the 360. Their PR has gone out of the way to promote their games to a wide array of publications...I'm sure that reflects on their profits in some way. Sony will probably take the same stance after a dismal launch of the PS3.