Videogames up, but film drags Sony earnings

Sales lift for PlayStation 3, PlayStation Portable

By Susanne Ault -- Video Business, 7/29/2008

JULY 29 | Sony Corp.’s rising PlayStation 3 sales were not enough to offset severe film declines, contributing to falling earnings in the company’s just ended fiscal first quarter.

For the three months ended June 30, Sony recorded 35 billion yen ($330 million) in net income. That marked a 47.4% drop from the comparable period last year.

Total revenue essentially stayed flat, at 2 trillion yen ($18.7 billion).

Sony’s game unit displayed the most momentum within the company, tallying 5.4 billion yen ($51 million) in positive operating income. That is a huge improvement over the 29.2 billion yen in red ink it incurred last year. Divisional sales climbed 16.8% to 229.6 billion yen ($2.2 billion).

Sony credits PS3 hardware cost reductions and rising PS3 software sales with powering the games division.

In the quarter, 1.56 million units of PS3s were sold worldwide, an increase of 860,000 units over the amount sold during the prior year’s comparable frame.

The PlayStation Portable also moved briskly off shelves, selling 3.72 million units, an increase of 1.59 million units from last year’s quarterly total.

PS3 software sales totaled 22.8 million units, a jump of 18.1 million units from last year. PSP software sold 11.8 million units, a hike of 2 million units.

Sony's games boost was dragged down by the company's film division, which recorded a net operating income loss of 8.3 billion yen ($78 million).

Sony blamed its performance on its failure to generate a release comparable to 2007 theatrical Spider-Man 3. The studio’s first-quarter theatrical standout was You Don’t Mess With the Zohan, which has grossed $97.7 million domestically. Spider-Man 3 grossed $336.5 million in the U.S.

Sony's electronics department reported mixed results. Citing improved LCD TV sales, the division increased just 0.7% to 1.4 trillion yen ($13.6 billion) in sales. Operating income sharply fell 57.2% to 44.4 billion yen ($418 million). Sony singled out pricing competition spanning its mobile phone, digital cameras and computers for curbing its electronics division profits.

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