If Sony are in the business of making money then they’re doing a pretty poor job of it, the figures just released for year ending March 31st show that Sony recorded a loss for the first time in 14 years as they reported a loss of 98.9bn Yen (£685m) compared with a profit of 369.4bn Yen the previous year, the company obviously (and with good reason) blames the global downturn and a strong Yen.
Sony aren’t taking this loss lying down however as they announced in December that they were laying off 8,000 people and closing 10% of its factories, and there were also some changes at the top of the organisation, but critics at the time said that these cuts don’t go far enough and that the newcomers to the board are battling the Japanese old guard to push through the modernisation needed. The fact that today BT have announced 15,000 layoffs, although an unrelated business but does show you can get tough to try to turn things around and would indicate that maybe Sony’s sword could have been sharper.
It’s not all bad news however as Sony were predicting a 150bn Yen loss back in January, so they have recovered somewhat, although probably not enough to win a place in Alan Sugar’s boardroom, but then again he made that Amstrad email phone which sold roughly 3 units worldwide so what does he know.
Financial analysts are predicting that the signs are that Sony will make a gradual recovery, although I think a comment by on the BBC website has hit the nail on the head “right now they have no number one products.” If we think about what Sony sell; TV’s – Samsung are No. 1, Laptops – Dell or HP are No. 1, Portable music players – Apple are No. 1, Video game consoles – Nintendo are No. 1, Handheld consoles, Nintendo are No. 1, the list goes on & on as well with DVD players, digital cameras, camcorders, mobile phones, Sony are failing to win a single market they trade in.
Still it could be worse, they could be Hitachi who’ve just recorded the biggest loss in Japanese history of 787.3bn Yen (£5.4bn) not that even that looks a big total in this country, as that wouldn’t even stretch to a Labour MP’s ivory tower being fixed.
Drilling down in too the figures to have a look at Sony Computer Entertainment (the bit we’re interested in) show a different picture, and one that isn’t quite so cloudy. The PlayStation 3 saw a 10% sales increase to 10m units, although I’m not aware of how that compares to the competition to know just how good or bad that figure is, but at least it’s upwards. The PSP also saw a 2% increase shifting a total of 14.11m units, these increases in sales helped SCE narrow its losses to £400k from the previous year’s £800m, quite a turnaround.
The outlook for 09/10 is looking even worse for the group as a whole, with losses expected to be in the region of 120bn Yen, some 20% worse than these already appalling figures, but who knows the gaming division may even be turning a profit by then, and with 2009 being the year of the PS3 & PSP it probably has to.