Sony PS3 price cut expected. Sony has mountain of unsold consoles in supply chain.

Skeptical analysts are still predicting a price cut for the PlayStation 3 this year, even though Sony may be about to reveal encouraging profit forecasts, according to reports from Japan today. Japan's Nikkei newspaper today claimed that Sony is expecting to improve operating profits to $3.35 billion this financial year – the paper did not identify the source of its information.

“We think Sony will find it hard to get through the financial year (which began this month) without cutting the price of the console, and expect further game segment losses of over $1 billion during that period”, commented researchers from leading Japanese investment firm, Nomura, in a private briefing to clients this morning.

PS3 mountain Despite the $1 billion in losses expected this year, and the $2.5 billion reported last year, Nomura's researchers do expect PS3 losses to end in later years, but are uncertain when.

Sony has sold only half of the six million PS3s it has manufactured to date, Nomura estimates. Other sources estimate the number of units shipped out of Sony's factories somewhat lower, at five million, but concur on the sales data.

Sony is expected to increase PS3 shipments to 10 million this financial year, although, as last year's numbers indicate, shipments are far from being an accurate indicator of sales figures.

"In the six months the PS3s was on sale up to March 31 (though for only one month in Europe) it sold 3mn units. To boost that substantially in the fiscal year (which began this month) without lowering prices would in our view need major software hits. We do not see the necessary drawing power in the title pipeline at this point." predicted Nomura analyst Eiichi Katayama. "We expect Sony to take measures to increase market penetration of PS3 hardware, including extending the software lineup, and expect to review our medium-term estimates for the game segment if and when such measures come into view."

Sony claims that it does not plan to reduce the PS3's price for at least two years, according to statements a spokeswoman made to Dow Jones Newswires in February. The company emphasizes that the product is 'a complete package', freeing users from the need to buy add ons.

Nomura is also skeptical about the encouraging profit predictions reported by Nikkei, because of the 10 million PS3's to be shipped, 3 million will actually come from last year's stockpile of already manufactured machines.

If correct, this will have a significant impact on revenues at Sony's semiconductor division, which makes chips for the console, because chip sales for 3 million of this year's PS3 shipments have already been included in last year's revenue figures at the semiconductor division. Nomura estimates the shortfall in chip division sales from this factor at around $170m.

Nikkei's report predicts a huge leap in operating profits for Sony, up to $3.35 billion from $500 million last year. However, Nomura not only casts doubt on the PS3 chip revenues, but also points out that $420 million of this profit increase is attributable to the end of Sony's payouts for exploding laptop PC batteries, and another $250 million to restructuring costs last year.

Nomura's analysts agree that Sony's profits this year will be considerably better than last year, but predict a lower figure of $2.1 billion, due to the PS3 sales and chip revenue issues.

“We think losses in the game segment are temporary and expect its earnings to improve,” Nomura's analysts added. “That said, we think the extent of profit growth in the segment will hinge on how well the PlayStation3 sells at the expected price and the launch of titles for it.”

Note: The Japanese 2008 financial year began April 1, 2007 and will end on March 31, 2008.

April 13: Updated with further comments from Nomura's analysts and Sony comment on price cut

Update May 16: Sony slows PS3 shipments following weak sales

Update June 15: Sony CEO, Howard Stringer, said today that the company is considering the size of a forthcoming price cut for the PS3, the Financial Times reported. "That is what we are studying at the moment. That's what we are trying to refine," he said. Stringer conceded that the Nintendo Wii had a very good business model, compared with ours, because it's cheaper."

In the UK there is at least

In the UK there is at least one major chain who's local branch I saw selling them off £25 off, and bundling a £50 odd HDMI cable in too, and they're still sat on the shelves.


That's true, i've seen several branches of Gamestation (the UKs second largest specialist games retailer) advertising PS3 at £399 - and that's on official printed posters, not the managers handwriting on a chalk board...

Blue's News comments on PS3 sales

Some interesting discussion of this story going on at Blue's News:

My question is how many Xbox

My question is how many Xbox 360s had been sold after 6 months?

I know they've sold about 10.5Mn in 18 months. so if you just divide by 3 that's about 3.5Mn but then they sold over a million last christmas so i'm guessing the figure is closer to 3Mn

So the difference between the systems is that Sony have managed to build them quicker then MS built 360s and the 360 wasn't supplied constrained after 6 months! So all in all the PS3 is selling as well as the 360 at the same point in it's life! And thats with a delay in the European launch!!

You think console sales are linear?

According to NexGenWars, there's been approximately 2,857,463 PS3's sold. PS2 was launched November 24, 2000 and it's sales figure for that year (which essentially a little over a month) were 6.4 million. In 37 days. That was a successful launch.

10,463,772 Xbox 360's sold in since launch. In the 18 months since it's launch, it's seen two Christmas seasons. Consoles have their greatest sales in the months leading up to Christmas. The sales aren't linear throughout the year, they surge and fall.

Also, the PS3 /isn't/ supply constrained. All throughout Australia and the UK they're sitting around on shelves, not selling, and the ones on eBay are going for less than retail. Supply & demand - prices fall when demand < supply.

The other main difference, of course, being that they're not losing $300+ per unit on each Xbox sold.


while I agree with your points, NexGenWars is not a good source of data. Their "sales" are estimates based on figures they occasionally get, which are then used to create an algorithm which produces slowly incrementing number for the site. There is no way they could be recieving "live" updates on sales figures, but the changing numbers every minute implies they do. Further, they often "reset" the figures to higher or lower numbers when official sales figures are released, the most infamous being at the wii launch when the number suddenly changed by nearly half a million.

Please stop believing non reliable sites.

NextgenWars is just a non sense site without any link or data that can be verified. Look at vgchartz if you want something that make any sense. This site does not care on what manufacturer said they just cared on sold units and external reports. And of course most important thier infos are reliable and can be verified.

With these data there is an huge difference on what is really happen for now. And on what you are trying to extrapol. For info : PS3 3.21m and Xbox 9.74m.

That means a difference in your case between PS3 and X360 of 7,7m.
And a difference in the real world of 6.5m.

keep in mind that there are a year headstart Worldwide for MS, and Sony really starts worldwide only since a month. It make an huge difference :
The situation is not that good for MS and it is not that bad for sony. The exact opposite of what sites like nexgencraps makes feel. This site is not reliable and there no way to verify what they say, be careful with the net.

Sorry for my english, it is not my spoken language !

The Ps3 is actually an

The Ps3 is actually an attempt at selling people dvd players to counter windows vista..
but its really meant to establish the Sony AI in your home so it can take over your cellphone with wireless technology.

What? The PS3 is a console

What? The PS3 is a console for gaming. It has the added benefit of playing BD movies, as did the PS2 for DVDs. Had Sony not put in a DVD drive back then we would have had a ton of dual disc games. Sony made the right move with the inclusion of BD. Square Enix have stated that they may use an entire 50GB BD for there FF game, Kojima as well stated that the space of BD is needed.

What a difference 6 months makes

Back in December I tried to get a PS3 in Japan and couldn't get one (at a legit outlet) for 2 months and now they've got an oversupply problem?? Price break? Its about time!

huskaleil is on the right

huskaleil is on the right track. Today I bought an old ps2 game from a GameCrazy outlet, and mentioned to the young clerk that I'd got my ps3 a couple weeks back. "Too bad," he says. "What?" says I. "They aren't doing very well," he said.
So I say, "they're doing just as well as xb360 did after less than 6 months." Which is absolutely true.
So he rattles off the names of two or three b-list titles. "PS3 lost 'Tom Clancy blah-blah'" and etc.
"Oh that's too bad," I says. "What's next, will xbox get an exclusive for the sequel to Irritating Stick?"
Xbox360 has been on the market over 3 times as long as ps3 and has sold at most 3 times as many consoles as of right now. Even though they're cheaper...

Besides that, all these early sales figures neglect one important fact that will over time become conventional wisdom: the ps3 is a superior console. It is, in fact far superior. Game developers have just started to adjust to its true power. The really good exclusive games will be released this fall (no the Tom Clancy title wasn't one of them)
huskaleil you are more right than you know. Microsoft is fighting for its console's life, knowing it is only a matter of time before the public becomes wise to the ps3's more amazing capabilities. The current generation of consoles will last many years, not just this year. I think xbox fanboys sense this and are afraid they will be left holding the bag. Almost all the negative or cocky stuff I hear about the console war comes from them.

PS3 Might be more powerful,

PS3 Might be more powerful, but when will it have the games that can really use that power? The PS3 games so far have been very 2006


I only use my PS3 to watch high quality Blu-Ray adult movies. I do have one game that came with it, but I never opened it.

How to Backup Games

How to Record Playstation3 Games on cd???
Pls, help me!

ps3 and xmas

Give the ps3 this christmas and see afterwards where the sales are.

"Give the ps3 this christmas

"Give the ps3 this christmas and see afterwards where the sales are."

It's in the exact same spot. lol

I've been wanting to buy

I've been wanting to buy PS3, I've read the hype about its capabilities. I have a PS1 and it's still running good, anyway I think it's time for upgrade and let the poor thing retire. At first it was the price that stopped me, I have the dough now but I read the reviews on people that bought it, PS3 breaksdown around the time warranty expires. I shop at Amazon, they have it and it's interesting what people say about it. Most agreed PS3 is superior than any other gaming console but still if its gonna breakdown you'll end up with a very expensive piece of junk.