SCE saw its sales rise 16.8% to $2.14 billion based on increased sales of its PS3 and PSP hardware.

JULY 30, 2008 • For the first fiscal quarter ending June 30, Sony Corp. reported that Sony Computer Entertainment (SCE) saw its sales rise 16.8% to $2.14 billion based on increased sales of its PS3 and PSP hardware compared to the previous year.  More importantly SCE reported operating income of over $50 million, versus a loss of over $250 million for the previous quarter.  Software sales for the PS3 were up 385% to 22.8 million.

Impact: According to Sony, PS2 hardware and software sales both contributed to the profit, although they were off 43% and 38% respectively. Sony also reported that the improved operating performance of the PS3, through hardware cost reductions and increased software sales, helped improve operating performance. However, it was unclear whether the PS3 business actually made it out of the red. Clearly the PSP is the quiet performer in the bunch.  Hardware sales for the PSP in the first quarter were up 75% to 3.72 million. It will be crucial to see if SCE can continue to keep the business in the black. Positive news may encourage Sony to be more forthcoming in providing detailed information on SCE’s performance. As losses have mounted over the past few years, the amount of financial information reported on SCE has declined. There is legitimate concern about the health of Sony’s game business, and Sony’s new limited reporting makes it difficult to do direct comparisons between the PS2 and PS3.