UPDATED 15:11 EDT / JULY 29 2011

NEWS

Sony Suffers Brunt of Revenue Decline Alongside Competitors Like Nintendo

It’s been a bad year for video game console developers out of Japan—I say so because Microsoft still seems to be steaming strong. Both Sony and Nintendo have seen a sharp decline in revenue over the past fiscal year; although connected by the Japan earthquake in March, Sony has the additional bad omen of the PlayStation Network shutdown to shoulder. Bloomberg is reporting that Sony cut its estimates by almost 25%; citing a loss of T.V. demand in the U.S. and Europe.

VentureBeat mentioned a $199 million loss in the first fiscal quarter, ending on June 30th,

Sony said it lost 15.5 billion yen ($199 million), compared with a profit of 25.7 billion a year earlier. The announcement shows how quickly things can change for dominant companies in industries with rapid changes and unforeseeable events.

The profit outlook for the fiscal year endingMarch 31, 2012, was cut from 80 billion yen to 60 billion yen. Sales are now expected to be 7.2 trillion yen, instead of 7.5 trillion yen. Analysts expected a loss of 2.5 billion yen.

Sony’s legal war with hardware hacker George “GeoHot” Hotz began an avalanche that ended with them buried under the deep, long shadow of the PlayStation Network blackout. Recently SiliconANGLE and Wikibon encapsulated the entire saga as an infographic (direct infographic link.) The earthquake and tsunami really didn’t do them well either, causing them to suffer huge revenue losses in the immediate aftermath.

Interestingly, the PlayStation business did manage a sliver of profit in spite of all these other losses—thanks to PlayStation 3 software sales. Sony moved 26.1 million games in the quarter, rising 5.2 percent; but the sales of the PS 3 console itself fell by more than 25%, dropping to 1.8 million units moved.

Sony also delayed the NGP portable console due to the Japanquake, but fortunately the console developer revealed it at E3 as the PlayStation Vita. The factories that produce the Vita had been damaged in the quake and tsunami, but spokesmen from Sony suggested that their recovery efforts had been going faster than expected.

Nintendo has also been seeing declines in their own revenues—they too suffered in the Japan quake and tsunami—but also at the hands of flagging Nintendo 3DS sales. While Nintendo did manage another wow moment at E3 by revealing their new Nintendo Wii-U—they also kyboshed the awe factor after being caught incorporating Xbox 360 and PS3 footage in their keynote video.

In future analysis, it looks like Microsoft will still be keeping their lead with the Xbox and Kinect technology while Sony and Nintendo play catch up and disaster recovery. However, both console and game developers appear to have solid game plans surrounding their new hardware, so Microsoft may not want to sit on their laurels for too long (Xbox 720 anyone?)


A message from John Furrier, co-founder of SiliconANGLE:

Your vote of support is important to us and it helps us keep the content FREE.

One click below supports our mission to provide free, deep, and relevant content.  

Join our community on YouTube

Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.

“TheCUBE is an important partner to the industry. You guys really are a part of our events and we really appreciate you coming and I know people appreciate the content you create as well” – Andy Jassy

THANK YOU