Sony released their quarterly financial report for fiscal Q2 2007, which corresponds to calendar Q3 2007.

Here are the numbers for Sony’s game division. These numbers are listed in millions of U.S. dollars. Sony’s real financial data is in Japanese Yen.

Of the $841 million dollar loss, $462.68 million of that was due to inventory deterioration. This deterioration was primarily PS3 related and occurs for two reasons:

1. Inventory deteriorates when it is produced at a higher cost than the intended selling price. The book value of your inventory is less than your production expense. The difference is booked as a deterioration expense.
2. When you reduce the selling price of your product, you reduce the book value of your existing inventory. This reduction in book value is treated as a deterioration expense.

On the bright side, Sony’s other divisions turned profits, and overall Sony made a $787 million dollar profit during the quarter. Obviously, the PS3 is a long term investment and up front losses are expected. The PS1 and PS2 provided many profitable quarters. Let’s hope the PS3 proves to be a profitable investment over it’s lifespan and encourages future development of its kind.

Hardware Unit Sales

(in millions of units)

Software Unit Sales

This presumably does not count downloadable purchases. Not sure if this includes budget priced titles.
(in millions of units)