Sony’s Q3 Financials Show A Strong Surge in Gaming

| Feb 2, 2017
Sony's Q3 Financials Show A Strong Surge in Gaming 1

While the Console Wars may be a thing of the past, their spirit remains in-tact; and according to Sony’s [stock_quote symbol=”SNE” show=”symbol”] 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.

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