PSP World

Sony Game Division Revenues Down for Q3 2008

Sony reported its third quarter financial results earlier today, and the picture is not pretty for the company’s usually profitable games division. Sales of all three major hardware platforms were down compared with the previous year. The PSP saw a 15% decline in sales, while sales of the PS2 shrunk by 57%. In actual numbers, the PSP console sold 5.08 million units over the past quarter compared to 5.76 million sold during the same period for the previous year. Even the new PS3 console did worse than it did in Q3 2007 at retail, with sales down by 9%. This quarterly report is significant, because it captures the three busiest months of the year for video game sales, the October – December holiday rush.

Sony blamed a tough global economy and the ongoing strength of the Japanese yen for the weaker than expected sales. A strong yen makes Japanese exports like electronics more expensive on the global market and cuts into company profits.

Despite weakened demand for its products, Sony still managed to post a profit of $110 million USD for the third quarter recently passed. This is down 95% over the same period from the previous year, when Sony reported profits of $2.2 billion USD. The company warns that this fiscal year will will be a difficult one, and it expects to post an operating loss of more than $2 billion USD for the entire year.

Demand for Sony's PS2 home console declined by more than 50% in 2008.

[Source: Sony Financial Statements]