The sales forecast cut is certainly a big blow, but analysts point out that the bigger problem for Sony is shrinking profits in its core gaming business.
Operating margins in the gaming division were only around 6% for the December quarter; This was well below the 9% reported in last year’s December quarter. And judging by the rumors, this greatly disappointed the management of the Japanese company.
Serkan Toto, CEO and founder of Kantan Games, believes that one of the main factors affecting the decrease in margins is the increase in game development costs. Marvel’s Spider-Man 2, for example, had a development cost of approximately $300 million, which Toto said could have a significant impact on the margins of the company’s gaming division.
Source: Ferra
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