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Blu-ray Surges, But Theatrical Comparisons Hurt Sony's Q1

29 Jul, 2008 By: Erik Gruenwedel

By Erik GruenwedelCiting 500% comparable year growth in sales of Blu-ray movies, Sony Corp. remains bullish on the new packaged media format, claiming 15% of select new release revenue is coming from Blu-ray.

“I would say 8% of the total DVD business [is Blu-ray],” said Robert Wiesenthal, EVP and CFO of Sony Corp. of America, in an analyst call. “Last year BD sales were only 2% of the total DVD business and now we have about 15 million BD-capable players out there worldwide.”

He said Sony Pictures Home Entertainment had sold 12 million Blu-ray Discs to date in the United States, and that there were about 1,700 titles released in the format worldwide.

“In terms of what we're seeing, new releases seem to continue to be doing well in both formats,” Wiesenthal said.

However, faced with comparisons from last year's box office phenomenon Spider-Man 3 and increased theatrical marketing for summer tent pole release Hancock, Sony Pictures reported a first quarter (ended June 30) operating loss of $78 million, compared to income of $4.6 million during the previous year period.

The film unit reported revenue of $1.5 billion, down 31% from last year. Sony does not report separate financials for Sony Pictures Home Entertainment.

The results reflected a mixed quarter for parent Sony Corp., which saw income fall more than 47% to $330 million on revenue of $18.4 billion.Game revenue, which included software and PlayStation 3, PlayStation Portable and PlayStation 2 consoles, increased nearly 17% to $2.1 billion. Operating income topped $51 million, compared to a loss of $273 million last year.

PS3 sales increased 860,000 units, to more than 1.5 million globally, while PSP sales increased nearly 1.6 million units, to 3.7 million. PS2 unit sales decreased more than 1.1 million units, to more than 1.5 million.

Unit sales of Sony Electronics, including its Bravia LCD high-definition televisions, increased 0.7%, to $13.5 billion, while operating income fell 57.2%, to $418 million.

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