Recalls and PS3 Start-up Hit Sony in the Pocket
October 26, 2006
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Due to fallout from its global laptop battery recall and start-up costs for the PS3, Sony has announced the company’s fiscal results for the three months ending September 30th, showing an expected poor result. The company’s group net profit for the quarter was $14.3 million, 
down from $240.2 million at the same time last year. The recall of 9.6 million batteries alone cost the company $429.9 million, preventing Sony from enjoying any benefit from an 8% rise in sales to $15.59 billion. Research and development, manufacturing, and marketing costs in connection to the PS3 launch contributed heavily to Sony’s games division reporting a $366.6 million loss; operating revenue were down by 20.5% (to $1.43 billion).
PS2 and PSP prices were dropped due to a decrease in hardware sales worldwide. Software sales also decreased overall, even though PSP sales were up on the previous year. Worldwide hardware shipments during the quarter were put at 5.02 million for the PlayStation 2 (up 0.01 million) and 3.89 million for the PSP (up 0.14 million). The company recently cut its shipment targets for the PSP from 12 to 9 million. Software shipments for the PS2 were 47 million units (down from 50 million) and 12.9 million units (up from 9 million) for the PSP. These poor results have forced Sony to revise its fiscal year profit forecasts up to March 2007, down 38% $674 million, a decrease of 35% on fiscal 2005 results. Sales, are expected to increase by 10% to $69.34 billion.
