Sony profit soars despite PS2 weakness

Shrinking PlayStation 2 shipments and sales send revenues from the game division tumbling.

Sony Corporation reports that the game division of Sony's developement reduced sales of Playstation 2 hardware as well as operating loss for the quarter. Sony said today that its overall profit totaled 23.3 billion yen ($210 million) for the quarter, up from the 1.1 billion yen ($9.8 million) it reported for the same quarter a year ago. According to the Wall Street Journal, Sony indicated that "profits for the latest quarter were better than it had expected but maintained its forecast for the full year, saying it wished to be cautious about the future."

Unit sales of the PlayStation 2 tallied just 710,000 during the April-June quarter. That number is nearly 2 million units less than the company shipped during the same quarter a year ago.

Industry analyst PJ McNealy of American Technology Research recounted in his morning memo that Sony executives informed him that the low ship-in numbers were the result of strategic planning, which anticipated the most recent price reduction of the console. "Channel inventory was ramped up in the March quarter in anticipation of the price cut," McNealy said he was told, "so while the production number is low, it should not be alarming."

An additional data point gleaned from McNealy's memo is that Sony is maintaining that it will reach its goal of shipping 14 million PlayStation 2 units and 1 million original PlayStation units during the full fiscal year. McNealy's memo also mentioned that Sony has completed moving production of the PS2 console to third-party partners. Sony itself reportedly confirmed that PS2 production is now taking place entirely in China.

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News source: GameSpot

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