57.1 Million PS4 Shipped by Sony as of December 2016; PlayStation Sales and Income Soar

57.1 Million PS4 Shipped by Sony as of December 2016; PlayStation Sales and Income Soar

Giuseppe Nelva February 2, 2017 1:08 AM EST

Sony Corporation announced today its financial results for the third quarter of fiscal year 2016, ended on December 31st.

As you can see in the table below, all the profit figures are in the black, despite a significant drop of income year-on-year, mostly due to the Sony Pictures segment.

The accompanying press release came with a detailed explanation of the company’s performance during the quarter.

“Sales and operating revenue (“Sales”) decreased by 7.1% compared to the same quarter of the previous fiscal year (“year-on-year”) to 2,397.5 billion yen (20,668 million U.S. dollars). This decrease was mainly due to the impact of foreign exchange rates. On a constant currency basis, sales were essentially flat year-on-year, due to significant increases in Game & Network Services (“G&NS”) and Semiconductor segment sales, substantially offset by a significant decrease in Mobile Communications (“MC”) segment sales. For further details about the impact of foreign exchange rate fluctuations on sales and operating income (loss), see Notes on page 10. Operating income decreased 109.8 billion yen year-on-year to 92.4 billion yen (796 million U.S. dollars). This significant decrease was mainly due to the 962 million U.S. dollars (112.1 billion yen) impairment charge of goodwill recorded in the Pictures segment. As announced on January 30, 2017, Sony made a downward revision in the future profitability projection for the Motion Pictures business within the Pictures segment. Due to the revision, it was determined that the entire amount of goodwill, 962 million U.S. dollars (112.1 billion yen), in the Production & Distribution reporting unit of the Pictures segment, which includes the Motion Pictures business, was impaired and an operating loss was recorded in the Pictures segment. In the same quarter of the previous fiscal year, a 30.6 billion yen impairment charge related to long-lived assets of the battery business was recorded in the Components segment. During the current quarter, restructuring charges, net, decreased 1.0 billion yen year-on-year to 5.1 billion yen (44 million U.S. dollars). This amount is recorded as an operating expense included in the above-mentioned operating income. “

Following, we get an update on PS4 shipments: the console shipped 9.7 Million units between October 1st and December 31st. This brings the shipments total to 57.1 million units as of December 31st.

Of those, we already know that (according to Sony’s estimates) 53.4 million units have been sold through to customers as of January 1st.

Sony also provided a specific breakdown of the results of the Game & Network segment of the business, which includes PlayStation and PlayStation Network.

A 5.3% increase in revenue was determined mostly by higher PS4 digital software sales on the PlayStation Network, and the debut of PlayStation VR. This was partially offset by price cuts of PS4 hardware.

Operating income saw a considerable 24% increase mostly due to PS4 hardware production cost reductions and a climb in PS4 software sales. Again, this was partially impacted by PS4 price cuts.

“Sales increased 5.2% year-on-year (a 15% increase on a constant currency basis) to 617.7 billion yen (5,325 million U.S. dollars). This increase was primarily due to an increase in PlayStation 4 (“PS4”) software sales including sales through the network and the contribution of PlayStation VR which was launched in October 2016, partially offset by the impact of foreign exchange rates as well as the impact of a price reduction for PS4 hardware. Operating income increased 9.9 billion yen year-on-year to 50.0 billion yen (431 million U.S. dollars). This significant increase was primarily due to PS4 hardware cost reductions and the above-mentioned increase in PS4 software sales, partially offset by the effects of the price reduction for PS4 hardware. During the current quarter, there was a 1.4 billion yen positive impact from foreign exchange rate fluctuations.”

We also get a breakdown of sales to customers in millions of yen for the Game & Network segment, split by Hardware, Network and Other.

This quarter hardware overtook network sales once more after three quarters of PSN primacy, likely due to PS4 console and PlayStation VR purchases during the Holiday season, even if the gap is much smaller than in the same period during the past fiscal year.

Last, but not least, we get the forecast for the current fiscal year, ending on March 31st, 2017, both for the company as a whole, and split by segment.

In particular, the outlook for the Game & Network services has been increased by 3.1% for sales since the prediction published in November, while the operating income forecast remains the same.

Predicted sales for PS4 for the whole fiscal year also remain at 20 million, unchanged from November’s outlook.