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Sony Not Doing so well Financially

For the quarter ending June 30, 2005, Sony lost $65 million. Most of these losses come from SCE – Sony Computer Entertainment, the division responsible for PlayStation. According to Sony the loss was “mainly due to an increase in selling, general and administrative expenses mainly reflecting advertising and marketing expenses incurred during the current quarter”. Also, “aggressive research and development spending associated with future business,” probably the PS3, was part of the problem.

According to Gamespot,

The R&D costs must have been steep indeed, since, in the second quarter, Sony’s game sales skyrocketed 64 percent, compared with the same quarter in 2004. Although sales of the new slimline PlayStation 2 slumped in Japan, they were way up in the US and Europe. Overall, Sony shipped 3.53 million units, up 2.82 million units from the previous year. However, this didn’t translate into commensurate sales of software for the console, as the still-robust 35 million games Sony shipped internationally during the quarter was 3 million fewer than a year ago.

Link: GamespotSony sees increased game sales, lower earnings