PlayStation division hit hard by global recession

PlayStation division hit hard by global recession
Sony's gaming division, dubbed the PlayStation Division, was hit hard for the quarter ended December 31st, 2008, with operating revenue down over 30 percent year-on-year to $4.32 billion USD.

In a hardware sales comparison, PS3 sales were 4.46 million, down 44,000 units, and PSP handheld sales were down 68,000 units to 5.08 million units. The PS2 saw the hardest hit, understandably, with sales dropping over 60 percent to 2.52 million.



The company blamed the global recession for the decline in hardware and software sales and also noted that the Yen's appreciation against the Euro played a role as well.

Some good news did slip through however, as Sony noted that PS3 software sales were up significantly year-on-year from 26 million to 41 million units.

Written by: Andre Yoskowitz @ 29 Jan 2009 16:21
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  • 16 comments

  • tatsh

    I blame it on PS3 not being hacked yet to play (warning: buzzword) backups 100%.

    29.1.2009 18:56 #1

  • chaos_zzz

    Originally posted by tatsh: I blame it on PS3 not being hacked yet to play (warning: buzzword) backups 100%. totally right, psp 3000 hasnt sold good neither since it's not flashable, i live in Peru and most people own a 360 not cuz of live (sorry live fans), but for the affordable prices pirated games have, here an xbox 360 game is near 4 dollars and probably if you buy a lot you can get them for 3. and psp sold good cuz for 10 dollars you can get your psp flashed and for each 2 dollars you get a game copied in your memory stick.

    ps2 sold amaziling good here, and don't get me wrong it's not a price issue ppl has money, cuz here an xbox 360 is 400$ (elite 500$)and a ps3 500$ and that's already flashed for the 360.

    so true ps3 with games up to 70$ or 360 with games up to 4$, go figure wich way ppl is gonna go

    and that's in a country where ppl buy pirated games, i also lived in the Us and with torrents you can pretty much download wathever you want at high speeds cuz internet is inexpensive. in Peru more like 100$ for 2mb

    29.1.2009 19:50 #2

  • L-Burna

    The PS2 got hit the hardest? I think everyone knows the reason why and that is because next gen consoles exist.If your going to go year-by-year on sales the PS2 even though still considered a system, it is being overlooked by consumers because its outdated.I mean who really wants to buy a PS2 when you can get a PS3,XBox 360 or the Wii.It doesn't take much effort to realise the PS2 won't last much longer as its pretty much dead when you think about it.I think the recession did have an effect,but in all honesty games shouldn't be priced at 60 dollars(probably more for other people)in the current state they are in.I see sequels occuring more often with no imagination and redundant gameplay.Just recently I heard game critics bashing Resident Evil 5, and they have some good points in the arguements they bring out.The game is still integrating pointless mechanics that should be gone by now.I mean the developers created so many Resident Evil games by now they should know what needs to be done to improve the game.If game developers produce crap they will get bad results in return.The game system is only a fraction of profits made from sales,but what really drives up sales for consoles is the accessories and games.

    29.1.2009 20:51 #3

  • DXR88

    but be honest with yourself guys we knew this was coming from a mile away. PS3 just isn't reeling in the doe they need, and Dev for ps2 is slowing down curving yet another income point. there getting it bad on both fronts.

    hacker's are motivated by how well a system might Preform, and the amount of people using the system. only reason its not openly hacked is for the sheer reason thats its a different platform and the added lack of motivation by the amount sold.

    the cell processor design is any developer's nightmare, same for hackers.

    Edit- Xbox360 Uses a Xenon processor, i dont for the life of me know why i said itanuim. -Edit

    and hacking RISC processors are just fun, MIPS being a personal favorite

    30.1.2009 01:02 #4

  • vurbal

    Originally posted by DXR88: but be honest with yourself guys we knew this was coming from a mile away. PS3 just isn't reeling in the doe they need, and Dev for ps2 is slowing down curving yet another income point. there getting it bad on both fronts.

    hacker's are motivated by how well a system might Preform, and the amount of people using the system. only reason its not openly hacked is for the sheer reason thats its a different platform and the added lack of motivation by the amount sold.

    the cell processor design is any developer's nightmare, same for hackers.

    Xbox360 is hacked cause its basically a itanuim 2 with added instruction sets

    and hacking RISC processors are just fun, MIPS being a personal favorite
    The CPU in the Xbox 360 is most certainly not Itanium-based. It's a derivative of the IBM PowerPC CPU and actually uses developments made in the design of the (also PowerPC derivative) Cell processor in the PS3. The big difference is that the Cell processor is designed with very specific jobs in mind while the triple core Xbox 360 CPU is more of a general purpose unit.

    As far as capabilities go, last I knew the fastest supercomputer in the world was running on Cell processors.

    30.1.2009 01:57 #5

  • Oner

    Originally posted by vurbal: Originally posted by DXR88: but be honest with yourself guys we knew this was coming from a mile away. PS3 just isn't reeling in the doe they need, and Dev for ps2 is slowing down curving yet another income point. there getting it bad on both fronts.

    hacker's are motivated by how well a system might Preform, and the amount of people using the system. only reason its not openly hacked is for the sheer reason thats its a different platform and the added lack of motivation by the amount sold.

    the cell processor design is any developer's nightmare, same for hackers.

    Xbox360 is hacked cause its basically a itanuim 2 with added instruction sets

    and hacking RISC processors are just fun, MIPS being a personal favorite
    The CPU in the Xbox 360 is most certainly not Itanium-based. It's a derivative of the IBM PowerPC CPU and actually uses developments made in the design of the (also PowerPC derivative) Cell processor in the PS3. The big difference is that the Cell processor is designed with very specific jobs in mind while the triple core Xbox 360 CPU is more of a general purpose unit.

    As far as capabilities go, last I knew the fastest supercomputer in the world was running on Cell processors.    Thank You Vurbal for saving me the time to write the proper information (and saving me possible hassle, as if it where to come out of my mouth it would be "fanboyism" or something). Great post...In addition, while it is widely known that Sony (along with MANY other companies) are hurting from the economy right now it must be made clear that Sony's Game division (Playstation line of products) posted a 400 mill yen profit for just Q3 of 2008. The main point to remember here is they are down to a profit of $4.32 billion USD under last years higher from profit but it is still profit. Not so "doom & gloom" as some of the media may claim huh?.

    This along with selling 4.46 million PS3 units in the same quarter brings the total YTD sales of calendar year 2008 to 10.7 million. This total amount of SOLD (not shipped like MS uses to pad their #'s) shows the PS3 outselling the 360 even after it had 2 price cuts in 2008...not bad for a "so called" under performer. And again showing it has outsold the 360 LTD (2 years vs 2 years), PS3 22 Million vs 360 15 Million or so.

    So while SONY as a whole is "down" or parts of them are in the red their Playstation line of products are in the black and sustaining each other just fine. Though I definitely agree with DXR88 that the PS2 in itself is really showing it's age but the devs are still making gobs of profit off of the titles sold on it, so I don't see the devs giving up just yet on it (140+ Million sold is hard to pass up in terms of a larger user base).

    Then the last push for the PS2 will be when it hits $99 and that's when you could see Sony (probably) pulling it from market sometime in early 2010 (hitting their 10 year plan), while implementing PS2 game downloads on the non BC compatible PS3's in order to get people to transition over (or something to that effect) and by then the PS3 should have a 2nd price drop from the the expected $299 one that is coming up in the next few months.



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    30.1.2009 09:15 #6

  • DXR88

    @Oner, if you have something to say just say it who cares what other people think.

    @vurbal thank you for correcting me, info came from a bad source. Now i know.

    30.1.2009 11:14 #7

  • Oner

    Originally posted by DXR88: @Oner, if you have something to say just say it who cares what other people think.

    @vurbal thank you for correcting me, info came from a bad source. Now i know.    It's not as easy as that. Especially since I have been catching a lot of flack for my "corrections" to misinformation with facts and such as of late (as evident in other threads recently).



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    30.1.2009 11:24 #8

  • vurbal

    Quote:Thank You Vurbal for saving me the time to write the proper information (and saving me possible hassle, as if it where to come out of my mouth it would be "fanboyism" or something). Great post...In addition, while it is widely known that Sony (along with MANY other companies) are hurting from the economy right now it must be made clear that Sony's Game division (Playstation line of products) posted a 400 mill yen profit for just Q3 of 2008. The main point to remember here is they are down to a profit of $4.32 billion USD under last years higher from profit but it is still profit. Not so "doom & gloom" as some of the media may claim huh?.

    This along with selling 4.46 million PS3 units in the same quarter brings the total YTD sales of calendar year 2008 to 10.7 million. This total amount of SOLD (not shipped like MS uses to pad their #'s) shows the PS3 outselling the 360 even after it had 2 price cuts in 2008...not bad for a "so called" under performer. And again showing it has outsold the 360 LTD (2 years vs 2 years), PS3 22 Million vs 360 15 Million or so.

    So while SONY as a whole is "down" or parts of them are in the red their Playstation line of products are in the black and sustaining each other just fine. Though I definitely agree with DXR88 that the PS2 in itself is really showing it's age but the devs are still making gobs of profit off of the titles sold on it, so I don't see the devs giving up just yet on it (140+ Million sold is hard to pass up in terms of a larger user base).

    Then the last push for the PS2 will be when it hits $99 and that's when you could see Sony (probably) pulling it from market sometime in early 2010 (hitting their 10 year plan), while implementing PS2 game downloads on the non BC compatible PS3's in order to get people to transition over (or something to that effect) and by then the PS3 should have a 2nd price drop from the the expected $299 one that is coming up in the next few months.
    I'm much more critical of Sony, and would attribute many (most?) of Sony's problems to mismanagement and a lack of corporate unity at the highest levels. They're the only company with a major console, major motion picture studio, major music label, and major consumer electronics company. And yet somehow they can't manage to compete with Microft's Xbox Live service. Were I a big time Sony stockholder I would be calling for resignations, and perhaps even the spinoff of various divisions into truly separate companies. If the PS3 division isn't going to take advantage of Sony content they should be making deals with Microsoft. The movie division should be focused primarily on making money rather than being just another arm of the Blu-ray marketing push.

    The only time Sony divisions seem to work well together is in opposing other companies. And just being the opposition isn't a money maker. I've been predicting the eventual breakup of Sony for a couple of years now, and unless the corporate atmosphere turns 180 degrees I think it will happen within 5-10 years. They seem to have lost sight of nearly everything that made them such a success in the past.

    Having said all that I have to agree that 1 quarter in the toilet during a recession doesn't spell the end of the company, their gaming division, or even their current platform. As I've already noted they have all the tools to turn things around. The question now is whether they're willing to do less of what they want and more of what the market demands. This is the kind of kick in the balls that can make or break a company depending on how they respond.

    Freedom of speech is ultra important so stupid people will make their stupid statements so we know how stupid they are.

    - Ted Nugent

    30.1.2009 12:09 #9

  • Oner

    Originally posted by vurbal: I'm much more critical of Sony, and would attribute many (most?) of Sony's problems to mismanagement and a lack of corporate unity at the highest levels. They're the only company with a major console, major motion picture studio, major music label, and major consumer electronics company. And yet somehow they can't manage to compete with Microft's Xbox Live service. Were I a big time Sony stockholder I would be calling for resignations, and perhaps even the spinoff of various divisions into truly separate companies. If the PS3 division isn't going to take advantage of Sony content they should be making deals with Microsoft. The movie division should be focused primarily on making money rather than being just another arm of the Blu-ray marketing push.

    The only time Sony divisions seem to work well together is in opposing other companies. And just being the opposition isn't a money maker. I've been predicting the eventual breakup of Sony for a couple of years now, and unless the corporate atmosphere turns 180 degrees I think it will happen within 5-10 years. They seem to have lost sight of nearly everything that made them such a success in the past.

    Having said all that I have to agree that 1 quarter in the toilet during a recession doesn't spell the end of the company, their gaming division, or even their current platform. As I've already noted they have all the tools to turn things around. The question now is whether they're willing to do less of what they want and more of what the market demands. This is the kind of kick in the balls that can make or break a company depending on how they respond.    MS has been at it with LIVE! for over 7 years now and they are a software based company, so they would obviously have the advantage of being able to (hopefully) produce a better service.

    While this is Sony's real first attempt at the online aspect and media content for their console (and they have A LOT to take up). But that is not to say that Sony doesn't have anything to show for it on their side (as you have noted with all their services from Music to Movie studios etc).

    They already have their own Video service (SD, HD, rent & purchase) and they are soon to release a Music service as well as a Music Video service as well. So they are on their way...but we'll see if it turns out to be an "equal" or a "close to" service compared to MS's LIVE! in the mass publics view. Though I personally believe they are 85% there already, and with a few minor tweaks, additions and a very thinly rumored Blockbuster rental deal plus on top of all of that being free, it's really hard to say/agree they are really that "far" behind in their online component. Hell, remote play with the PSP alone is an awesome feature that has access to all of the above too!

    The only other thing I wanted to have your view on Vurbal is about how Sony's foresight in overlapping generations to help support/stimulate/carry the launching of their new iteration of console each time. I.E. using the profit's from the PS1 to help sustain the PS2 and the same now with the PS3 thus also allowing devs to have an extra "crutch" to help with the transition into their next gen console each time because they have an additional source of income with a strong fan base.



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    30.1.2009 14:06 #10

  • vurbal

    Quote:Originally posted by Oner: The only other thing I wanted to have your view on Vurbal is about how Sony's foresight in overlapping generations to help support/stimulate/carry the launching of their new iteration of console each time. I.E. using the profit's from the PS1 to help sustain the PS2 and the same now with the PS3 thus also allowing devs to have an extra "crutch" to help with the transition into their next gen console each time because they have an additional source of income with a strong fan base.
    That's actually a very good question, and the answer is much more complicated than it appears on the surface. From the PSX to the PS2 there was a pretty clear strategy of using one to jumpstart the other, and it was very successful. Of course that was before they had competition from MS or a serious chance at breaking open secondary markets like India. What's interesting right now is that the PS2 is actually much more than "the last generation" of console. In some parts of the world it's still the current generation and it's doing well. So in that sense you'd have to say it's a huge success and arguably still the backbone for their console division. And of course even in places like the US and Europe the PS2 is still a major player because of both its established customer base and the availability of new games. That in turn keeps the market for both new and used PS2s alive and well. In fact had my father-in-law not bought us a Wii for Christmas I was going to get the kids a used PS2 so clearly I see it as a very vital product right now.

    On the flip side of that is the affect on PS3 sales. With so much life still left in the PS2 a new console that costs a lot more money is a hard sell. I suspect last quarter's sales slump was due to a comgbination of this and the availability of competitive Blu-ray players. At some point they'll have to decide that the PS2 cannibalizes sales more than it props up revenue. But let's not forget how they became the giant they are today. It was about taking over markets first so they could maximize profit later. There's a lot to be said for the value of market share in the long run. But they don't have room for too many more missteps in the competition against the Xbox.

    Freedom of speech is ultra important so stupid people will make their stupid statements so we know how stupid they are.

    - Ted Nugent

    30.1.2009 14:57 #11

  • Oner

    Originally posted by vurbal: But they don't have room for too many more missteps in the competition against the Xbox.I actually like the fact they have the competition on multiple fronts, it halts stagnation/complacency and keeps ALL sides on their toes which ultimately begets the consumers to reap the benefits like new tech, innovation, choice & $$$ savings in the long run (well not us early adopters though :( lol).



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    30.1.2009 16:07 #12

  • vurbal

    Originally posted by Oner: I actually like the fact they have the competition on multiple fronts, it halts stagnation/complacency and keeps ALL sides on their toes which ultimately begets the consumers to reap the benefits like new tech, innovation, choice & $$$ savings in the long run (well not us early adopters though :( lol).
    No disagreement there. Competition is good not just for consumers, but ultimately for any company that survives it as well.

    Freedom of speech is ultra important so stupid people will make their stupid statements so we know how stupid they are.

    - Ted Nugent

    30.1.2009 16:24 #13

  • gamecheif

    You guys bring up good points. i can add more onto why the PS2 did/doing so well especially when you look at how they changed the look of the system. I think that was the scheme all along if they had chosen to leave the system the way it was as far as visuals go i dont think it would be doing as good as it is. That shows you that no matter how old the product is if you modify it in a way to the customers liking it still has life or value.

    Another thing i want to bring up is the value of sony these pass years looking at their products on all platforms they sell them much higher then anyone else that has a track record of value most people say its because of the name others say because of the quality product you get. But ultimately i think the decisions they make or how they project in the long run allows them to price any of their products that high in price.

    A bad decision i think sony made was them hinging of Blu-Ray. a smart thing to do was charge the extra $10 for Blu-ray disc and keep the standard Dvd Playback. See, in the minds of most consumers, blu-ray is the reason your spending that extra $300 which most fell that extra money spent isnt worth it. As was stated in a seperate article Blu-Ray is going to start failing in the next 3 to 4 years just because of the the sheer price range gap compared to DVD. Not to mention the fact that streaming blu-ray is barely managed. Personally i think blu-Ray is ahead of its time Which is why the PS3 sales arnt at the expected points

    1.2.2009 02:58 #14

  • iamgq

    Shhhheaght
    For any company making $4.32 a year, I WANT TO BE PART OF YOU!
    I dont see what the complain is about...
    Also, the media continues to hype this recession, is the reason it started and continues in my opinion.

    1.2.2009 16:15 #15

  • DXR88

    Originally posted by iamgq: Shhhheaght
    For any company making $4.32 a year, I WANT TO BE PART OF YOU!
    I dont see what the complain is about...
    Also, the media continues to hype this recession, is the reason it started and continues in my opinion.    recession is a good spin word, where not in a recession yet, we are heading that way if we don't stamp out useless money leeches.

    like save a child in some poor plagued countries.

    many military organizations can be folded into one payroll.

    Lotto is a waist of money and time get rid of it and save millions, its and obsession and not a necessity

    FBI and CIA can be merged it saves time and money and information exchange would be faster.

    Food stamps could be removed, and added to SSI or disability.

    reduce global bailout if you crash a multi billion dollar company you don't deserve to be in business.

    these are things that could have been already done.

    1.2.2009 22:50 #16

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