Sony Corporation recently released their financial statements for the previous fiscal year, and as they had warned, the results are abysmal. The company suffered a net loss of almost $1.2 billion, with most of their consumer electronic divisions bleeding in the red.
Despite restructuring and consolidation, Sony is still unable to find a way for most of its divisions to become profitable. Their PC division has been losing money at such a high rate that Sony has announced they will be selling their computer business to a Japanese investment firm, but in the meantime they are losing money through a glut of unwanted inventory.
The few bright spots in their financial statements are around their entertainment offerings, with Pictures (Sony’s movie business) and Music both doing relatively well. They have also managed to succeed with their imaging business, as their consumer and professional digital cameras continue to earn a profit.
But what about PlayStation?
With the launch of the PS4, and the continuing struggles of the PS Vita, Sony’s Game division posted a net loss of $78 million. This comes despite a 38% increase in revenue. The PS4 may be flying off the shelves, but launching a new console does not come cheaply, and profits from the system are not expected until at least sometime next year.
And the PS Vita?
Sales of the Vita continue to remain below expectations. Sony initially expected to sell at least 5 million units of its handheld in their FY13 (their fiscal year which goes from April 1, 2013 to March 31, 2014). Sony doesn’t release the exact figure of Vitas sold, but instead lumps them together with sales of the PSP and the Vita TV. Even still, the numbers are less than stellar.
The portable entertainment systems sold only 4.1 million units, which is down from the 7 million sold the prior year. Much of this is attributable to declining sales of the PSP and the failure of the Vita TV to catch on in Japan. Their forecast for the coming year has been lowered, and they now only expect to sell 3.5 million PS Vitas, along with the PSP and Vita TV.
This is not a good sign that the Vita TV will be headed to the West anytime soon, nor does it show that Sony is confident its fortunes are going to turn anytime soon. While it is possible that Sony is low-balling their forecast to lower expectations, it’s a sure bet that they don’t want to have to revise their forecast lower throughout the year. And when you compare these numbers against what the Nintendo 3DS is doing, things do look quite dark. Sales of Nintendo’s handheld performed almost 3x better and sold close to 12.2 million devices during the same time.
It’s not all bad news!
Yes, at first it looks like it’s all doom and gloom for our beloved PS Vita, but that isn’t the case. Let’s be optimistic for a moment and look at the bright side of things.
First, while Games suffered an operating loss last year, Sony did not attribute any of it to the PS Vita. In fact, the main factors given were the launch of the PS4 (again, which is an expensive thing to do) and write downs for various games from Sony Online Entertainment. It appears that despite its small market share and difficulties with retail, the Vita is not a money-loser for Sony. And compared to its other divisions, sometimes not losing money is enough.
Secondly, there is still plenty of support for the Vita. The number of games currently being developed for the system is rather large and continues to grow every day. We recently reported that SCEE’s Vita evangelist Shahid Ahmad’s team has over 60 games in the pipeline with dozens more coming. Vita owners will not suddenly find themselves starved for games to play. The device, despite the hole’s in its library, has a wealth of terrific content available with more on the way.
And lastly, while the Vita’s sales numbers are nowhere close to the 3DS, they do look rather good when compared to Nintendo’s Wii U sales. Last year Nintendo only sold 2.7 million units of its new-gen system, which makes the 4.1 million Vita sales look rather grand (though you need to subtract the PSP and Vita TV sales, which are probably just a small fraction of the overall number).
There is still time for the Vita’s fortunes to turn around. As we’re constantly reminded, it’s a marathon and not a sprint.