This report is solely based off of the Sony Playstation Game division and does not reflect the outlook of Sony as a Corporation.
In the Game segment, an increase in software sales was more than offset by a decline in hardware sales mainly due to strategic price reductions, resulting in a decrease to overall segment sales.
In the Game segment, as a result of a decline in hardware sales, there was a decrease in operating income.
Hardware: In addition to a decline of PlayStation 2 ("PS2") unit sales in Japan , the U.S. and Europe , strategic price reductions on the PS2 undertaken in each of the abovementioned territories resulted in a decline in sales. Software: Overall software sales increased mainly as a result of an increase in unit sales of PS2 software, which recorded all-time record sales. Revenue increased in Japan , the U.S. and Europe .
PlayStation Portable, on sale in Japan from December 2004 and in the U.S. from March 2005, has recorded strong hardware and software unit sales.
Operating income decreased by Y24.4 billion, or 36.1%, compared with the previous fiscal year as a result mainly of a decrease in hardware sales coupled with the start-up expenses for PlayStation Portable, despite being partially offset by an increase in software sales.
Operating income decreased by Y24.4 billion, or 36.1%, compared with the previous fiscal year as a result mainly of a decrease in hardware sales coupled with the start-up expenses for PlayStation Portable, despite being partially offset by an increase in software sales.
Worldwide hardware production shipments:*
* PS2: 16.17 million units (a decrease of 3.93 million units)
* PS one: 2.77 million units (a decrease of 0.54 million units)
* PSP: 2.97 million units
Worldwide software production shipments:*
* PS2: 252 million units (an increase of 30 million units)
* PS one: 10 million units (a decrease of 22 million units)
* PSP: 5.7 million units
*Production shipment units of hardware and software are counted upon shipment of the products from manufacturing bases. Sales of such products are recognized when the products are delivered to customers.
Inventory, as of March 31, 2005, was Y77.5 billion ($724 million), a Y53.4 billion, or 40.8%, decrease compared with the level as of March 31, 2004 and a Y32.1 billion, or 70.7%, increase compared with the level as of December 31, 2004. (Regarding inventory, please refer to the note in the above Electronics segment.)
In the Electronics segment, an increase in intersegment sales to theGame segment resulted in an increase in sales although sales to outside customers declined 5.5%. Although sales primarily of flat panel televisions and LCD rear projection televisions increased, there was a decrease in sales of mobile phones (primarily to Sony Ericsson), portable audio products and CRT televisions. In the Game segment, there was a significant increase in sales as a result of an increase in both hardware and software sales, primarily associated with the launch of PlayStation Portable.
Game
Sales are expected to increase due to the contribution from both PlayStation Portable hardware and software. Although PS2 and PlayStation Portable are expected to contribute to operating income, increased research and development costs primarily for the next generation computer entertainment system are expected to leave operating income relatively unchanged.
Business Segment Information (Millions of yen, millions of U.S. dollars) Year ended March 31 Sales and operating 2004 2005 Change 2005 Revenue Game Customers 753,732 702,524 -6.8 6,566 Intersegment 26,488 27,230 255 ------------------ ------ ------ ------ Total 780,220 729,754 -6.5 6,821 Electronics intersegment amounts primarily consist of transactions with the Game business. Music intersegment amounts primarily consist of transactions with the Game and Pictures businesses. Other intersegment amounts primarily consist of transactions with the Electronics business. Operating income (loss) 2004 2005 Change 2005 ------------------ ------ ------ ------ ------ Game 67,578 43,170 -36.1% 404 ------------------ ------ ------ ------ ------ (Millions of yen, millions of U.S. dollars) Three months ended March 31 ( Unaudited ) Sales and operating 2004 2005 Change 2005 Revenue ------------------ ------ ------ ------ ------ Game Customers 121,436 213,990 + 76.2 2,000 Intersegment 5,301 8,133 76 ------------------ ------ ------ ----- ------ Total 126,737 222,123 +75.3 2,076 Electronics intersegment amounts primarily consist of transactions with the Game business. Music intersegment amounts primarily consist of transactions with the Game and Pictures businesses. Other intersegment amounts primarily consist of transactions with the Electronics business. Operating income (loss) 2004 2005 Change 2005 ------------------ ------ ------ ------ ------ Game (6,886) 1,488 - 14 ------------------ ------ ------ ----- ------
Source: Bloomberg
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