Sony’s Q3 Financials Show A Strong Surge in Gaming

Sony's Q3 Financials Show A Strong Surge in Gaming

While the Console Wars may be a thing of the past, their spirit remains in-tact; and according to Sony‘s SNE 33,72 +0,14 +0,42% financial reports, the scales seem to be tipping in the favor of the PlayStation 4

Released on the official Sony website, the financial results for Sony’s third quarter (ending Dec. 31, 2016) show a strong increase of sales in their gaming sector. Sales increased 5.2 per cent year-on-year (a 15 per cent increase on a constant currency basis) to 617.7 billion yen ($5,325 million U.S.D). This increase was primarily due to an increase in PlayStation 4 software sales including sales through the network and the contribution of PlayStation VR. PlayStation 4 hardware itself saw 9.7 million units sold in the third quarter.

The report also shows an operating income increase from 9.9 billion yen year-on-year to 50.0 billion yen (431 million U.S. dollars). This significant increase was primarily due to PlayStation 4 hardware cost reductions, and the previously-mentioned increase in PlayStation 4 software sales, partially offset by the effects of the price reduction for PlayStation 4 hardware. During the current quarter, there was a 1.4 billion yen positive impact from foreign exchange rate fluctuations.

However, the report was not all good news. While Sony’s gaming division reaped the benefits of a strong fiscal year, the report shows an overall descrease in sales in almost all of Sony’s other divisions. Sony’s Mobile division shows a 35.3 per cent  decrease in sales, their IP&S division shows a 9.6 per cent decrease, their Home Entertainment division shows a 12.1 per cent decrease, and most notably their Pictures division shows 14.1 per cent decrease which may have prompted their recent $1 billion write-down.

Despite the hits, Sony reported an decent third-quarter with an overall sales decrease of 7.1 per cent, mainly attributed to the impact of foreign exchange rates. With the game industry expanding at such a rapid pace, one can only wonder if Sony might reevaluate their business strategy to focus more on their gaming sector and, like Nintendo, become a name that is synonymous with video games.