Sony announced their second quarter results today for the period ending September 30th 2015. For the company as a whole, sales decreased 0.5% year on year to ¥1,892.7 billion. Sales were essentially flat due to the performance in the mobile division offsetting sales from other divisions such as the Games and Network services division. Operating income hit ¥88 billion which was significantly up compared to the loss of ¥85.6 billion that Sony had last year. It’s a welcome change for Sony and is very much thanks to Kaz Hirai’s management that has been able to take Sony from a company that was generating huge losses to one that is now turning a healthy profit. There is still some way to go for Sony but the PS4 and Gaming division is really helping Sony this year thanks to increased sales and profit.
Looking at the Game and Network services division , Net sales increased 16.5% year-on-year to 360.7 billion yen. This significant increase was primarily due to an increase in PS4 software sales as well as the impact of foreign exchange rates, partially offset by a decrease in PS3 software sales. Operating income increased ¥2.1 billion year-on-year to ¥23.9 billion. This increase was primarily due to the above-mentioned increase in PS4 software sales, partially offset by the negative impact of the appreciation of the U.S. dollar and the above-mentioned decrease in PS3 software sales.
The PlayStation 4 continues to dominate the home console market selling in 4 million units during the quarter compared to 3.3 million in the same quarter last year. Sony also saw fit to increase their full fiscal year forecast to 17.5 million units. The original was 16 million back in March, it was later revised in June to 16.5 million and now stands at 17.5 million
It is important to note that these units were sold in before the price cut went into effect worldwide in October, therefore we should see a fairly large boost in this current quarter thanks to the combination of a $50 price cut and the approaching holiday season. Last holiday the PlayStation 4 sold through 4.1 million units to end users between November 23rd 2014 and January 4th 2015 and this year we expect the PlayStation 4 to hit somewhere around 5 million units during the same period. This would be a record compared to the PS3 which was never able to see holiday sales this high but would fall short of PS2’s record of 8.5 million units sold to end users during Holiday 2002.
As of September 30th, Sony have shipped 29.3 million PS4’s and are forecast by Sony to hit 39.8 million as of March 31st 2016. The Nintendo Wii U has sold in 10.73 million units and is forecast by Nintendo to hit 12.37 million units as of March 31st 2016. Microsoft have refused to update sales figures since their “almost 10 million” units back in November 2014. As we reported in the Microsoft earnings release, the company will no longer be using console shipments as a metric of success, instead choosing to boast that they now have 39 million active Xbox Live subscribers. We estimate that Microsoft will exceed 20 million Xbox One’s sold in by the end of the calendar year based on publicly available data as well as our own forecasting model.
Below you’ll be able to see how the PlayStation 4 is shaping up compared to our sell in estimates. This forecast was originally put together in January of 2015 and at this point in time we were expecting the PS4 to hit 28.9 million by the end of this quarter but it seems that sales have exceeded expectations and total sell in is now at 29.3m. We believe the higher sell in is due to continuing demand for the PS4, new shipments of the CUH-1200 series and sell in from Sony before the price cut goes live in October. We now believe that the PS4 will exceed our own expectations this holiday quarter as well and we could see more than our original forecast of 36.1 million being shipped by the end of the year.
I’ve also posted a chart below which shows how the PlayStation 4 is comparing to some other consoles including the PS2 and the Wii. PlayStation 4 still remains the fastest selling PlayStation console to date, slightly ahead of the PS2. It is important to remember that the first 7 months of sales for the PS2 were in Japan only and the PS2 had supply issues from day 1 when it launched in the West. We do expect the PlayStation 4 to continue tracking ahead of the PS2 for a while but we don’t expect the console to hit 50 million units before the PS2 did. We estimate that the PlayStation 4 has 50% market share worldwide for 8th gen consoles and that share will continue to grow as we move further into the generation. Please note that the chart below does not include Xbox One sales for the last quarter due to Microsoft not updating us with numbers, all other numbers shown on the chart for the Xbox One include error bars to adjust for inaccuracies.
Click to enlarge.