Sales increased 6.1% compared with the previous fiscal year (a 2% increase on a local currency basis).
Hardware: Overall sales increased as a result of the launch of PS3 in Japan, North America, and Europe. However, the sales of PlayStation(R)2 ("PS2") and PSP(R) (PlayStation(R)Portable) ("PSP") declined due to lower unit sales compared with the previous fiscal year, and also because of a price reduction of the PS2.
Software: Despite an increase in PSP software sales compared to the previous fiscal year, as well as the contribution from PS3 software sales, overall software sales decreased as a result of lower PS2 software sales.
An operating loss of Y232.3 billion ($1,969 million) was recorded compared to the Y8.7 billion of operating income recorded in the previous fiscal year. This deterioration was primarily the result of the loss arising from the sale of PS3 at strategic price points lower than its production cost during the introductory period, as well as the recording of other charges in association with preparation for the launch of the PS3 platform. In addition, operating income from the PS2 business declined due to a decrease in software sales, while operating income from the PSP business increased primarily due to continued cost reductions in hardware production.
Worldwide hardware production shipments* (decrease compared to the previous fiscal year):
-> PS2: 14.20 million units (a decrease of 2.02 million units)
-> PSP: 8.36 million units (a decrease of 5.70 million units)
-> PS3: 5.50 million units
Worldwide software production shipments* (increase/decrease compared to the previous fiscal year):
-> PS2: 193 million units (a decrease of 30 million units)
-> PSP: 54.1 million units (an increase of 12.5 million units)
-> PS3: 13.2 million units
*Production shipments of hardware and software units are counted upon shipment of the products from manufacturing bases. Sales of such products are recognized when the products are delivered to customers.
Inventory, as of March 31, 2007, was Y198.8 billion ($1,685 million), a Y87.3 billion, or 78.4%, increase compared with the level as of March 31, 2006. Inventory increased by Y95.6 billion, or 92.6%, compared with the level as of December 31, 2006. These increases are primarily due to the launch of PS3 in Japan, North America, and Europe during the current fiscal year.