SONY POSTS PROFITS
April 27, 2001

Sony today reported profits of 17 billion yen (US$138 million) for its latest fiscal year, which ended on March 31, despite concerns of a slowdown due to US economic woes. For the last quarter of the year, the company reported profits of 15.7 billion yen (US$127 million), up from losses of 36.7 billion yen (US$298 million) in the same quarter a year ago. A change in accounting rules, mostly related to the new movie standard, was cited for 130 billion yen (US$1.05 billion) less profits for the year.

Regarding its games business, Sony indicated decreased losses in its PS2. Sales figures were reported as follows:

Total sales: 661 billion yen (US$5.36 billion), up slightly from last year

Operating losses: 51 billion yen (US$41 million) due to cost of launching PS2

2000 PS2 units shipped: 9.2 million
By region:

• Japan - 3.3 million
• US - 3.0 million
• Europe - 2.9 million

Cumulative PS2 units shipped: 10.61 million (1.4 million last March in Japan)

2000 PS2 software units shipped: 35 million
By region:

• Japan - 14 million (4.2:1)
• US - 14 million (4.6:1)
• Europe - 7 million (2.4:1)

Cumulative PS2 software units shipped: 38 million (3 million last March in Japan)

2000 PSone units shipped: 9.3 million
By region:

• Japan - 1.1 million
• US - 4.4 million
• Europe - 3.9 million

Cumulative PSone units shipped: 82.3 million

2000 PSone software units shipped: 135 million

2001 Forecast
The company is projecting strong growth in profits during the upcoming year from 17 billion yen to 150 billion yen (an increase of 795%) because there will be no accounting-related losses such as was seen last year.

For games, both PSone and PS2 shipments are expected to go up during the coming year.

PSone shipments are expected to be above 10 million units. Given this type of continued popularity, it is conceivable that the PSone will ultimately reach 100 million units sold, easily giving Sony more than 3/4 of the total 32/64-bit market and making the PlayStation the first console to hit the 100 million mark.

Thanks to decreased production costs and a planned boost to 2 million monthly units this fall, PS2 shipments are expected to be 20 million units for the coming year (double the initially anticipated 10 million), which would bring cumulative shipments to 30 million. This indicates a very, very strong lead over both Microsoft and Nintendo by the time the next fiscal year approaches. Assuming the company manages to continue production of 2 million units per month for the following three years, the PS2 would surpass 100 million units within 5 years. This would fall in line with Sony's comments of PS2 hardware selling at a "much faster level" than the original.

However, despite this growth, the company is predicting similar software shipments for this year as for last year. This suggests continued strong support for the PSone throughout the year but also low software shipments for the PS2. One would be led to believe, therefore, that the truly strong PS2 times will be from 2002 on, as the PSone is phased out more.

On a final note, Sony expects the gaming segment to turn a profit around the middle of this year and to ultimately be profitable for the year as a whole. But it cautions that total investments in the PS2 will not be fully recovered until March 2004.