Sony slashes handheld game consoles target as Vita struggles

The company's earnings report shows it remains on track for a small profit for the year as it shrunk third-quarter losses

By Jay Alabaster | 07 February 13

Sony's Vita and PlayStation Portable handheld game consoles continued to struggle in the crucial holiday shopping season, but the company shrunk its overall losses from a year ago and is still on track to return to profitability this fiscal year.

Sony revealed the numbers as part of its earnings announcement for the October-December quarter. The company booked an overall loss for the period of ¥1.1 billion (US$120 million), far better than its massive ¥15.8 billion loss a year ago.The Tokyo-based electronics manufacturer on Thursday cut its global sales target for its portable games consoles by 30 percent, saying it now targets 7 million units versus the 10 million it predicted in November. The Vita launched from February last year in much of the world, making 2012 its first full holiday season.

The company held to its goal for a ¥20 billion profit this fiscal year through March, after a record annual loss last year. It will be helped in that regard through special one-time profits, including those from the sale of its U.S. headquarters in New York City.

Sony's core electronics business booked an operating loss in the quarter, as both its mobile products and home entertainment segments were in the red. Its PlayStation gaming division remained profitable by a slim margin, but it had another loss in its long-suffering television business.

The cut in Sony's portable game sales target comes after multiple hints from the company that the Vita may be underperforming expectations. In a round-table interview last month in Tokyo, CEO Kazuo Hirai said sales are "on the lower end of our expected range."

Sony appears to be gearing up for the launch of its next generation PlayStation 4, with a major gaming announcement planned in New York for Feb. 20. Local media have said the PS4 will go on sale this year, launching in time for the 2013 holiday season.

The company's struggles with the Vita coincide with those of Nintendo, which also cut targets for its handheld 3DS and new Wii U home console after a tough holiday period. Both companies are trying to maintain interest in their pricey hardware even as the gaming market for low-priced titles aimed at smartphones and tablets continues to grow.

Overall, Sony's profits for the quarter were buoyed by strong showings in its movie and music business, which saw boosted income from titles like "007 Skyfall" and "Hotel Transylvania." Its financial division also had a strong quarter.

Sony does not break down separate sales figures for the Vita and PlayStation Portable in its earnings release. The company's financial year runs from April through March.