Sony has stated (via Reuters) that it expects losses from its entire corporation to equal around 260 billion yen for the fiscal year ending March 2009. According to GI.biz, the games division is expected to post increased losses of 30 billion yen ($337 million), though there's no mention of what that's an increase from. This is in stark contrast to last fiscal year, where Sony posted a profit of 369.4 billion yen. Of course, the economic downturn is predominantly blamed. As a result Sony has revealed accelerated restructuring plans for the remainder of the fiscal year.

According to Reuters Sony plans on cutting costs by 250 billion yen by the end of March by consolidating all TV design and production into a single factory, closing another. There will also be a 30% headcount reduction within the TV division. LCD TVs and batteries will be consolidated and managers and directors will receive a paycut. Overall it looks like the games division has remained largely unscathed. Hopefully the measures that are taken prove effective and Sony ends up posting a profit for FY 2009.

The December NPD result were not particularly shocking: Xbox 360, a system which is half the price of the PS3, sold twice as many systems as the PS3. What if the PS3 were cheaper? GameDaily asked a number of analysts.

Michael Pachter, who has traditionally been the PS3's cheerleader, believes the system will actually outperform the Xbox 360 at a $299 price point. "Should they price at parity with Xbox 360 ($299), I think that PS3 sales would exceed 360 sales, and eventually, they could catch up." There's still a lot of time in this generation -- if PS3 sales improve, it wouldn't take too long to close the gap between the two systems.

Jesse Divinich also agrees that Sony could break out of its last place position, although he's less confident. "Sony has a legitimate chance at catching up to the Xbox 360 within the next 2 years, but in terms of overtaking the Xbox 360, that is not likely for some time."

PS3 sold 726,000 units in December, according to the latest NPD results. That brings the total of PS3s sold in 2008 (in the US) at a respectable 3.6 million units. While these figures are quite good, they do pale in comparison to Nintendo and Microsoft's consoles.

The price of PS3 has been discussed repeatedly over the past few months. Is it strange to see such a direct correlation between price and units sold between PS3 and Xbox 360? PS3 costs twice as much and has sold almost exactly half as many systems as the 360. Here are the numbers:

Hardware Sales for December 2008:

• DS - 3.04 million
• Wii - 2.15 million
• Xbox 360 - 1.44 million
• PSP - 1.02 million
• PS3 - 726K
• PS2 - 410K

Things just go from bad to worse for Sony. Japanese business news service Nikkei (via Reuters) is reporting that Sony will be posting a ¥100 billion ($1.1 billion) loss for the fiscal year ending March 31. It'll be the first full-fiscal operating loss for Sony in 14 years and only the second time to happen in its years as a public company.

Nikkei suggests that Sony's losses could actually go up as far as double this initial figure of ¥100 billion. This is in sharp contrast to Sony's previous forecast of a ¥200 billion profit for the fiscal year. It isn't clear exactly how this will affect Sony's Computer Entertainment division but we suppose that "won't affect SCE" mantra from before seems less and less believable.

[Via Gamespot]

We were so hopeful that PS3 would get a price drop this year. But no. Michael Pachter, analyst at Wedbush Morgan, had to "predict" a PS3 drop in April. Drats, we were looking forward to this one too. Unfortunately, with Pachter's track record, it's pretty good to bet that he'll be wrong.

"Once the PS3 is at a more affordable price point (we expect a cut to $299 in April), we think that sales of that device will once again begin to grow," he states. However, don't expect Microsoft to take that sitting down. "We expect another cut in price for the Xbox 360, with the feature-laden Pro model likely to come down in price to $249 at or before this year's E3 show in June." Nintendo, however, has no reason to lower its price and will unlikely drop the price of the bestselling Wii.

Pachter is right once in a while, so we're optimistic that a price drop will happen. Perhaps it won't be as significant as $100 off, or perhaps it won't happen in April. It'll be interesting to see what Sony chooses in '09: their bottom line, or making a more aggressive attack in the console wars.

It's well known that Sony's latest console is a powerful, expensive piece of tech. When Sony launched the PS3, it lost over $200 on every unit sold -- in spite of its $600 price point. However, over time Sony has been able to reduce the costs of manufacturing the system, by removing PS2 compatibility and switching over to a more efficient 65-nanometer chips.

iSuppli, the company which broke down the PS3 at launch, estimated the cost of making a PS3 was more than $840. Now, they say the PS3 costs 53% less to make -- at around $445, for a system which sells at $400. Sony is still losing money on each system sold, but in a much less extraordinary way.

Not only are the individual components cheaper to make, there are simply less things inside a modern PS3. According to iSuppli, the number of parts inside a PS3 has fallen from 4,048 to only 2,820. Since launch, Sony has reworked the innards of the PS3 to include combined chips. The falling price of components also helps Sony a lot: the Cell processor cost $89 at launch, but now only costs $46 to make.

Sony should be able to break even with the PS3 starting in 2009, which makes us wonder if they'll start adopting a more aggressive price strategy late next year. We hope so -- they need a way to make themselves attractive to customers, without breaking the bank.

[Via PlayStation Forums]

Sony stock fell 5.9 percent in Japan today as two analysts downgraded their investment rating of the company, "citing a loss of competitiveness." Credit Suisse reduced its rating of Sony from "neutral" to "underperform," believing "fundamental changes" are needed to get Sony back on track. The Credit Suisse analyst cut its share-price estimate of the company by 59 percent, to 1000 yen. He predicts Sony's net loss for this fiscal year will be 150 billion yen ($1.66 billion).

Deutsche Bank AG also cut its recommendation from "buy" to "hold," as it lowered its share-price estimate by 49 percent, blaming Sony's "high level of operating costs." It appears drastic measures, and further layoffs, will be necessary to restore investors' faith in Sony Corporation.

[Via GI.biz]

As expected, this month's NPD numbers look grim for PS3. 378,071 hardware units sold in one month is certainly not a figure to scoff at, and we're glad to welcome these new PS3 fans. However, Microsoft's Xbox 360 outsold PS3 more than twofold due to its attractive new $199 price point.

It's incredibly costly to fight the console wars, and Sony's high-tech console is a pricey gadget to manufacture. Instead of focusing on the grim, Sony should be proud of its software numbers, with more than 3.5 million units sold in November alone. That represents a year-to-date growth of 150%. Sony can also take comfort in having sold a million hardware units across the entire PlayStation brand, with PS2 and PSP picking up the slack. To see the numbers, click past the break. Update: Software sales added!

While the holiday battle is clearly lost to Sony, fans of the platform can still look forward to 2009, where releases like Heavy Rain and Killzone 2 will undoubtedly reinvigorate sales. However, we urge Sony to consider a price drop -- no matter how insignificant -- as soon as possible. In economic times like these, people are far less willing to buy a $399 system over a $199 one, no matter how much more the PS3 may offer.

November won't be a good month for Sony, if the analysts at EEDAR are to be believed. According to Jesse Divinich, Sony can expect double digit percentage declines from the successful sales of November '07. PSP sales will have plummeted 25% from last year, while PS3 sales will have dropped almost 20%. The softening economy and fierce competition from Microsoft and Nintendo will certainly affect Sony's install base.

At the very least, Sony can take comfort in knowing that PS3 software sales will be up from previous years. However, due to the incredible drought of PSP software, Sony's handheld will be the only platform which will show a decline in software sales.

Double Fusion, a company specializing in in-game advertising, has expanded its PS3 portfolio by securing exclusive "advertising opportunities" with new publishers: THQ, SEGA, Eidos and Midway. This announcement offers the first details of Double Fusion's partnership with SCEA to provide ads in PS3 games since unveiling their plan in July.

"One only has to look at the recent videogame sales figures to realise that games are the one form of entertainment consumers don't want to live without," states Jonathan Epstein, president and CEO, Double Fusion. "We are pleased to partner with and provide incremental revenue opportunities to game publishers by offering advertisers a variety of hand-selected cross-genre games we know will be a hit with gamers and the marketers looking to reach them."

Double Fusion will be specifically targeting male consumers, ages 18-34 in their various campaigns. Next time you play a Sonic game, don't be surprised to see him wear some Nike shoes.

What happens when people are reluctant to spend money? Well, they're reluctant to buy a $400 games machine, that's what. As reported yesterday, Blu-ray predictions are down due to the struggling economy. PS3 sales should also be affected, an obvious conclusion made by analyst Piers Harding-Rolls. "At the top end, the PS3 with its high price is arguably more likely to be impacted by a recession than the other platforms. This may prompt consumers to consider other consoles or wait for the PS3 price to drop."

But, sluggish sales of the PS3 won't be the only outcome of a recession economy. Credit has dried up in many areas, meaning developers of games may be forced to cancel or stall projects, before funds become more readily available. "Where I do see an impact is with regards to access to credit for publishers that look to borrow to invest in content production. Obviously credit is less available generally so this may result in cost cutting and some projects being canceled and put on hold."

Of course, when developers and publishers can't try something new, you know what they turn to: less original IPs as investors become increasingly wary of games with ambiguous potential.

The numbers are in. While Metal Gear Solid 4 has shipped three million copies around the world in the first two weeks, it's already gone off to sell over four million copies worldwide. 4.33 million copies have been sold from June up to September -- that's four months after launch. Hmm, the fourth game sells four million in four months? We sense a Patriots conspiracy here.

With conspiracy theories aside, MGS4 alone accounts for 38 percent of all Konami games sold between April and September 2008. This ties in with previous reports where Konami predicted an 88 percent increase in profit.

Konami is a publisher of games on every platform. However, it appears that their greatest success comes on PlayStation consoles. In 2007, sales were largely dominated by PlayStation platforms. The PS2 represented 39% of Konami's overall sales, while the PlayStation brand accounted for 58%.

2008 looks no different, as PS3 now represents 38% of Konami's overall sales (thanks, Metal Gear Solid 4!). The PlayStation brand accounts for a whopping 67% of sales for the Japanese publisher.

Without MGS4 in the company portfolio, the numbers may skew a bit differently. However, it's important to note that Konami seems to be struggling in getting a key audience on non-Sony platforms. Xbox 360 is home to most of Konami's multiplatform efforts, and that's yielded quite an insignificant return. We're surprised by the success they've found on PSP, especially in comparison to the DS figures. So long as PlayStation can offer these kinds of numbers, Konami may continue being one of Sony's greatest partners.

[Via NeoGAF]

Publishers need to tell their investors what platforms they think will succeed, and Activision CEO Mike Griffith did exactly that during the company's Q3 earnings conference call. According to Griffith, he believes the Xbox 360 will grow an additional 6-7 million units for the calendar year. However, he believes the PS3 will grow by 8 million. Sure, it's not a tremendous victory, but it shows that publishers are confident that Sony will chip away at Xbox 360's one year headstart in this console generation.

While this is good news for Sony, one can't help but be amazed by the incredible growth Nintendo will continue to experience. According to Griffith, another 15 million people will be added into the Wii family. No wonder Sony is so quick to jump on the bandwagon.