Sony's Game Division Sees Hardware Sales Falling

Sony is reporting that its gaming division has had a tough time in the quarter that ended on December 31. The data shows that year on year, the sales revenue has decreased by more than 32%, going from 581.2 billion Yen to just 393.8 billion Yen, or from 6.43 billion dollars to 4.36 billion. The main reasons cited by Sony are the strong yen, which means that products sold overseas are bringing in less revenue, and the sales decline due to the economic crisis.

Sales of the flagship PlayStation 3 have gone down by 440,000 units over the same period in 2007, resulting in 4.46 million consoles sold during the quarter worldwide. The PlayStation Portable shed even more sales, managing to ship only 5.08 million devices, 680,000 less than in 2007. The PlayStation 2 managed a good performance, selling 2.52 million units, but its age is showing in a drop of 2.88 million consoles sold.

It's not a good sign for Sony that its consoles are losing sales in the most important period of the year, when the current gen console should be posting higher numbers. It's especially worrisome to see that the PlayStation 3 is behaving worse than it did in 2007.

One consolation is the fact that videogame sales have been growing for the PS3 and that Sony is set to release a big title in February, Killzone 2, which will likely boost revenue for this quarter.

Sony has already posted a big loss and has announced that it plans to reduce its staff by 16,000 people in order to cut costs by 2.9 billion dollars. It seems that the cuts will not affect the PlayStation division, which is seen as a strategic asset.

David Reeves, who is the president of Sony Computer Entertainment Europe, recently said that “As long as we plan prudently, I think we will be fine. We have a good business model. People will continue to buy the hardware, continue to buy the software. I'm convinced of it.”