Tuesday, October 31, 2006

Sony News

First off, they announced earning late last week:
TOKYO - Sony's profit plunged 94 percent for the July-September quarter as a global battery recall and red ink in its video-game business hurt the Japanese electronics and entertainment company.

Sony Corp's group net profit for the fiscal second quarter totaled 1.7 billion yen ($14 million), dwindling from 28.5 billion yen the same period the previous year, the Tokyo-based manufacturer said Thursday.

An extra cost of 51 billion yen ($429 million) related to a global recall of 9.6 million Sony laptop batteries was a major factor behind the sharp drop in profit.

...Sony reported a 43.5 billion yen ($366 million) operating loss in its gaming division because of charges related to the preparation for the next-generation PlayStation 3 console, set to go on sale in the U.S. and Japan next month.

Full story here (thanks Sean Murphy).

What's interesting about that $366 million loss in the gaming division is that it includes all the profit from the PS2 hardware and software.

Here's more, from GamesIndustry.biz:
Sony's chief financial officer, Nobuyuki Oneda, has warned that the games sector "is weak" and presents "a major challenge" after the company posted a drop in profit of more than 90 per cent.

That's code for "we are in big trouble here." They're a year late to market, they have major supply issues, and this tech that they want to last ten years is going to look outdated in four (at the very most).

The combined advance of technology is greater than any amount of money Sony can spend. It's greater than any amount of money anyone can spend.

Here's the next piece: Sony's also going to miss their revised-revised launch shipment targets for the PS3--in Japan, at least. No surprise, since we discussed that probable scenario a few weeks ago, but here's the news:
Sony still being plagued by component shortages
According to the Nikkei Keizai Shimbun, Sony is still having problems with component shortages on its PlayStation 3 console. So instead of having 100,000 units on hand for the Japanese launch of the PS3 on November 11, Sony will instead provide 80,000 units.

Full story here.

To be fair, what I wrote was that I expected 500-750k units shipped in North America by the end of the year instead of Sony's 1M target, and they still haven't made any announcements related to North America--but I strongly believe they will. They've already pre-seeded an announcement with Tretton's statement last week that 1M units in North America by the end of the year was an "aggressive" target.

Then there's this story:
TOKYO - Sony said Tuesday that the U.S. Department of Justice is probing its electronics unit as part of an industry-wide investigation into sales of a type of memory chip. The news could spell more trouble for a company already stung by sinking profits, a global battery recall and product delays.

The Japanese company received a subpoena from the Justice Department’s antitrust division seeking information about Sony’s static random access memory, or SRAM, business, company spokesman Atsuo Omagari said.

“Sony intends to cooperate fully with the DOJ in what appears to be an industry-wide inquiry,” the company said in a short statement.

Read the full story here.

Hey, it's only 8:40 here. There will probably be something else by noon. They can spin these stories all they want, but to some degree, Sony is staggering.

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