If you keep a weather eye on the fortunes of technology companies you will be well aware of a number of global and regional situations that are adversely impacting their performance. The recovery in the global economy, particularly in The West, is still progressing like a drunk trying to find his way home after closing time.
Last month’s floods in Thailand have hit many tech companies hard (e.g., Western Digital’s flooded HDD factory) either because they have manufacturing facilities there or some of their key suppliers do and Japanese companies are still struggling with the effects of a strong Yen.
All of those are impacting Sony which is also making its own internal changes to try and address poor performance. We already know that they are buying Ericsson out of their mobile phone joint-venture. Then a few days ago stories started circulating that they may pull out of their LCD joint-venture with Samsung prompting the usual “no comment” statement from Sony.[drop2]Now their Q2 FY2011 financial report, covering the period from 1 July 2011 to 30 September 2011, reveals that they are anticipating “the sale of the small- and medium-sized display business” and is accompanied by a more detailed statement on the steps they are taking in an effort to return their LCD TV business to profitability, realigning it “from volume expansion to establishing a stable platform for revenue growth”.
The stimulus for all of this is another quarter of poor financial performance which has seen Sony record an operating loss of ¥1.6 billion ($21 million, £13.4 million). This is on the back of sales falling by 9.1% compared to the same quarter last year (year-on-year) a fall which Sony attributes primarily to the “unfavourable foreign exchange rates and lower LCD television sales”.
In Sony’s corporate structure both LCD TVs and its PlayStation brand are part of its Consumer Products & Services business segment. The CPS segment alone recorded a loss of ¥34.6bn ($449m, £291m). That Sony’s overall performance was much better was down to relatively strong performances from both its Pictures and Music businesses.
Of course what we are really interested in is how many PlayStations were sold during those three months. The answers are 3.7m PlayStation 3s (up 200k year-on-year) 1.7m PSPs (also up 200k) and 1.2m PlayStation 2s (down 300k). Software wise Sony sold 37.4m PS3 titles during the period (up 2.1m) 8.1m PSP titles (down 2.9m) and 2.6m PS2 titles (down 1.8m).
Note: All figures provided by Sony except for Pound Sterling values which use the average JPY/GBP exchange rate for July 1 2011 to Sept 30 2011, which is 0.0084, provided by OANDA.