Annalists Warn Sony on 3rd-Quarter Profits

While rivals are swimming in cash and struggle to supply the shops with ever more selling units, Sony not only won't be able to cover its manufacturing expenses but also, as annalists say, may report a third-quarter profit drop by 50 percent.

Nintendo's both Wii and DSs have reached record sales as demand is constantly growing to the joy of the manufacturers. Sony's PS3 on the other hand doesn't seem to hold a good position against the competition as shares of Sony have risen only 9.6 percent in the past six months, trailing the 61 percent gain by Nintendo and Xbox 360-maker Microsoft Corp.'s 26 percent increase. Today, Sony's stock fell 1.2 percent.

"A drop in third-quarter results is largely expected on the games division," says Mitsushige Akino "unless the company further reduces its profit forecasts,'' who oversees $468 million in assets at Ichiyoshi Investment Management Co. in Tokyo. Akino doesn't recommend investors to buy Sony stock until the company improves its earnings.

This is not the only problem Sony is confronted with at the moment as defective laptop batteries, the largest in consumer electronics history also add to the PS3's poor debut.

Sony will probably lose a record 191.9 billion yen from games this fiscal year, compared with profit of 8.7 billion yen the previous year, according to the Bloomberg survey. This is mainly because the PS3's debut was terrible having to confront problems like production delays and cutting the price to compete against cheaper Wii and Xbox players.

Sales of Nintendo's DS alone have exceeded the PS3's by more than double so, I think that says it all. Really now, how do they expect to sell the unit with so many better alternatives out there ( in price terms I mean), when the PS3's manufacturers have not only put a high price on the console's tag but even raised it with $50 in Canada. They seriously have to reduce profit forecasts if they want to see the light at the end of the tunnel.