Sony unit's profits hit €1.7m but revenue falls

A DROP in the retail price of the PlayStation 3 saw revenues at Sony Computer Entertainment Ireland drop to €22.6 million during its 2010 financial year, but the company managed to increase pretax profit from €437,000 to €1.7 million last year.

While the recommended retail price of the company’s flagship games console was reduced, the “cost of the goods came down as well” said Niall O’Hanrahan, managing director of Sony Computer Entertainment Ireland (SCEI).

Although there were no blockbuster titles released for the PlayStation 3 during the financial year which ended on March 31st, 2010, Mr O’Hanrahan said software sales benefited from a “steady stream of solid titles”.

Mr O’Hanrahan said SCEI was likely to see a slight rise in revenues for the current financial year. The releases of Gran Turismo 5, a blockbuster title only available on Sony’s platform, and the introduction of Move, its wireless motion controller, benefited sales.

The last quarter of this financial year will be boosted by the release of a number of Move and 3D-compatible games including Little Big Planet 2, Killzone 3 and Motorstorm: Apocalypse.

Notes to the 2010 accounts, just filed at the Companies Office, describe the year as “a difficult one for retail due to the economic downturn, with credit facilities difficult to obtain and unemployment soaring”. The number of PlayStation 3 consoles sold rose by 1.8 per cent, although sales of the PlayStation Portable dropped by about 10 per cent. The accounts note this was against a drop of between 20-30 per cent in the general consumer electronics market.

No dividend was paid by SCEI to its parent, UK-based Sony Computer Entertainment Europe, but the Irish firm now has retained profits of just over €11 million. Employment numbers at SCEI remained steady during 2011 at 11. The wage bill increased from €811,000 to €852,000.

Separately, Sony Ericsson, the Japanese firm’s mobile phone joint venture, said yesterday it was looking to a new line of smartphones based on Google’s Android to boost growth after a disappointing end to last year.

Sony Ericsson made a pretax profit of €35 million on sales of €1.53 billion. Analysts in a Reuters poll had an average forecast for a pretax profit of €79.7 million, and sales of €1.82 billion.

The shortfall occurred because the manufacturer was forced to slash prices to attract Christmas shoppers to its ageing handsets.