Video Gamer is reader-supported. When you buy through links on our site, we may earn an affiliate commission. Prices subject to change. Learn more
Sony has reported a 15% tumble in its operating profits blamed on massive losses incurred during the launch of its flagship PlayStation 3 console.
Although the corporation enjoyed strong sales of its Bravia range of flat screen TVs, the high cost of producing the Blu-ray drive-equipped games machine caused its operating profits for October to December 2006 to fall to 178.91 billion yen – a significant drop on the 210 billion yen earned the previous year. Net profits also fell 5.3% to just under 160 billion yen.
The news was no surprise to the Tokyo-based company though, as it has said losses on the console would grow to 200 billion yen by March this year, when the device finally launches in Europe. Sony also remains positive about the future, increasing its annual operating profit forecast to 60 billion yen (around £251 million).
However, this figure still remains lower than many analysts’ predictions and is a considerable drop on last year’s 226 billion yen figure, prompting some experts to fear PS3 could be damaging Sony’s finances for many years to come.
Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management, said: “Investors had anticipated a better outlook as Sony had said its game business was doing as anticipated and its TV business was growing. But the upgrade was not as much as the market had hoped, and that’s negative.”
The news also follows reports the expensive console is being discounted by up to 20% in some Japanese stores, suggesting a widening gap between shipped units and actual sales.
Sony still plans to ship 6 million PS3s by the end of the financial year (March 31).
