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Sony adds $200 million to its projected losses, $1.2 billion loss expected

Thursday, 1st May 2014 09:49 GMT By Dave Cook

Sony has added $200 million to its projected losses, bringing the total to $1.2 billion.

GI.Biz reports that for the fiscal year ended March 31, 2014, Sony has projected a net loss of ¥130 billion / $1.27 billion. It previously predicted a loss of ¥110 billion / $1.07 billion.

It comes after Sony initially predicted profits of 50 billion / $489 million at the end of the last fiscal year.

Explaining the projection change, Sony cited its exit from the PC market and end of its VAIO. We reported on the decision back in February, along with Sony’s decision to focus on the 4K market, and the expected laying-off of some 5,000 staff.

Sony’s PC sales for the fiscal year just ended are said to have been lower than expected.

In a statement, a Sony spokesperson said, “Consequently, Sony expects to record write-downs for excess components in inventory and accrual of expenses to compensate suppliers for unused components ordered for Sony’s spring PC lineup.

“In addition, certain restructuring charges are expected to be recorded ahead of schedule. As a result of these factors, an additional total amount of approximately ¥30 billion in expenses is anticipated to be recorded in the fiscal year ended March 31, 2014.”

The company also highlighted ¥25 billion in, “impairment charges mainly related to its foreign disc manufacturing business.”

It follows restructuring efforts at Sony, which have seen lay-offs at Guerrilla Games Cambridge, Sony London, and Sony Santa Monica Studio. There have also been a run of departures at Naughty Dog, but they have not been linked with lay-offs.

However, it’s worth noting that the firm’s operating costs have since dropped from ¥80 billion to ¥26 billion. We’ll have a greater breakdown of the numbers once Sony reveals its full financial report on May 14.

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46 Comments

  1. Dragon

    Kaz is on borrowed time now, one more year of losses and he will be out.

    #1 5 months ago
  2. Joe Musashi

    Or make a retreat back to the only profitable division Sony have.

    JM

    #2 5 months ago
  3. The_Red

    Question for those with more info:
    Has Sony been doing this badly for years or did it get really worse when Kaz came on board? I’m not trying to blame him but so far, it’s been bad news after bad news ever since he came on board.

    If it really is his fault, then he should be fired immediately. If not, then he definitely deserves more chances (In case that all of this was his inheritance from Stringer regime, rather than his own doing).

    #3 5 months ago
  4. derpex

    Sony is selling or splitting off their lossy businesses (Vaio, TVs) and focusing on their profitable divisions. This means they’ll soon cut their losses and start turning a profit. You should be worried if Sony WASN’T cutting those losing divisions, but they’re making the right business decisions. They won’t ever be an empire again but they aren’t going bankrupt.

    Sony isn’t going bankrupt, and the gaming division and first party studios are well funded and making a profit. During the quarter ending 31st December 2013 the Game business made a profit of $172m off the back of an impressive 64.6 per cent rise in sales year on year. Sony is in for a year or two of losses and restructuring, then provided their profitable divisions stay profitable, they’ll be on solid ground.

    Sony is not on the brink of bankruptcy. They are still worth 18.5 billion. They just aren’t bringing in enough revenue or profits to bring that number up, and for a time, and probably for a few quarters here or there for the next few years, they will lose money. They also obviously have working capital, because they have games in development right now, and are able to market their newest system and do what they have to do to sell their products. If Sony were on the brink of bankruptcy, we wouldn’t be seeing AAA game announcements with budgets ranging from $50-100 million dollars. If they were on the brink of bankruptcy, they wouldn’t be buying Gaikai, or investing in new tech such as Morpheus or the PS4.

    PS4 will have the graphics advantage the entire gen. PS4 hardware and software will outsell Xbox globally the entire gen. PS4 will have more dev support and more 1st party games the entire gen. PS4 will make a net profit, and Sony won’t go bankrupt.

    Sony’s market cap is 18.65 billion as of today (2014).
    Market cap in 2013 was 17.6 billion it has gone up since then.
    Sony is ranked #80 in world as the most valuable brand 2013.

    Sony is ranked #506 in the global 2000
    #87 in Sales
    #171 in Assets
    #547 in Market value
    78.52 billion dollars in sales in 2013

    #4 5 months ago
  5. game_on

    Sell P4 to MS and go bankrupt already!

    @The_Red
    Sony is doing badly as long as I can rememer.

    #5 5 months ago
  6. dtyk

    @derpex
    While I’m glad that someone else here has the same business sense, but you should stop trying to convince people with logic. Doesn’t work around here lol. People also don’t understand that a market with no competition leads to a shit industry, they really just care about which platform they like to worship.

    #6 5 months ago
  7. super3001

    sony ends soon. brand loyal drones wised up. sony make overprice junk.

    will not miss them

    #7 5 months ago
  8. Erthazus

    This is incredibly lame. Gaming division won’t help at all.
    That’s why Jack Tretton left because he know that the ship is sinking.

    #8 5 months ago
  9. CyberMarco

    @super3001 Oh! look who came back for a visit… :P

    #9 5 months ago
  10. Joe Musashi

    @9 Strap yourself in buddy, the ride is just getting started.

    JM

    #10 5 months ago
  11. Erthazus

    Sony’s products are irrelevant. This year’s CES only showed that and it will continue to be that way until the company will collapse.
    It’s a sinking ship that requires a different strategy at all. Gaming division is not doing well too. Look at the Guarilla Cambridge/Sony London and other studios restruct.

    Anyway, execs are pissed off.

    #11 5 months ago
  12. dazedonthemoon

    @derpex
    Thanks for backing shit up with facts… All these trolls in here can only talk out their own asses.

    #12 5 months ago
  13. super3001

    only 1 fact needed. 1.2 billion dollar losses

    not sustainable. sony will end soon.

    #13 5 months ago
  14. Dragon

    @The_Red,
    Its more of an inheritance issue. Sony has lost ground in many divisions since the start of 21st century, but gaming (ps2, psp era), sony financials and other hugely profitable parts led to complacency in Sony execs. Stringer, a western and a non-hardware guy was a bad choice in hindsight.
    Much part of this losses stem from 1 time writeoffs like selling PC division I assume. Spinning off TVs is also a good decision, so Kaz is going down the right path. But if TVs don’t recover this year, Sony would be under very severe pressure to sell off TV division, like Pansonic did with its plasma range.
    If you cut out TV division, then entire Sony is in profits. But selling TV division is a catch 22 for sony as it would mean parting with a section that made what they are. Sort of like nokia selling off mobile division to MS.

    #14 5 months ago
  15. NocturnalB

    @derpex – I agree. I see it all as shedding and refocusing, I see them returning to profit eventually as well.

    #15 5 months ago
  16. melonbuster1

    Lol I’m so happy soon all the dead fan boys will rot.

    #16 5 months ago
  17. The_Red

    @game_on
    In that case, it seems that at least so far, Kaz has not been doing enough to turn the ship around. He is not solely responsible for the crappy situation at the company and yet either his changes and attempts have been insufficient (His bad) or the legacy of Stringer is indeed beyond repair (Not his bad).

    @Dragon
    Thanks for the explanation. Great point about the TV section. I had a Sony TV at the start of last gen and it was a hell of a good product (Later switched to Samsung). Hopefully Sony is not going the way of Nokia in irrelevancy. If anything, PS4 is the proof that the company can get the right people (Cerny, Boyes, Shahid…) to work on a good product (PS4).

    #17 5 months ago
  18. mxmassef

    They will continue to struggle but they arent going anywhere just changing.

    #18 5 months ago
  19. zoopdeloop

    Super,melon being 10yrs old is that fun eh?guess you can’t comprehend the whole article and what derpex added
    Erthazus i though you were smarter than this

    #19 5 months ago
  20. Mike W

    @zoopdeloop

    Lol, that was your first mistake, to put “Erthazus” and “smart” in the same sentence. ;)

    #20 5 months ago
  21. melonbuster1

    @zoopdeloop they are done by the time I’m 13 I won’t remember you or sony

    #21 5 months ago
  22. stretch215

    @20 +1000. You beat me to it!

    #22 5 months ago
  23. Nickwpearce

    @dazedonthemoon Facts??? Selling a few ps4s isnt going to help them champ, Sony fan boys in denial as usual, cant wait until they are gone!

    #23 5 months ago
  24. NocturnalB

    @Nickwpearce – “Sony fan boys in denial as usual, cant wait until they are gone!”

    Spoken in willful ignorance. Just because he chose to use vulgarity, you label him a fanboy. And then follow it up with an even more ignorant, fanyboy-esque “cant wait until they are gone!”.

    This isn’t a fanboy topic, it is a business topic, and whether you choose to accept them or not, verified facts are verified facts. Just because a company posts a loss, doesn’t not signify the apocalypse. It’s especially ignorant to hope and wish for a company – especially one that plays a vital roll in our delicate gaming ecosystem just as much as it’s competition – to fail.

    Apparently you enjoy pay walls at every turn and increased presence of micro transactions and in-app purchases as well as an over decrease in the quality of the industry.

    #24 5 months ago
  25. NocturnalB

    *does not signify

    #25 5 months ago
  26. bradk825

    Sony isn’t going bankrupt, that will just not happen. If anything they may continue to cut unprofitable business lines. We certainly from a gaming perspective have to reason to think they’ll be dropping off. PS4 is off to an amazing start. With that install base they’ll have no problem selling games. That part of the company isn’t going anywhere.

    #26 5 months ago
  27. Joe Musashi

    Some facts:

    There are the same number of letters in the word “SONY” as:

    DOOM
    FAIL
    DIRE
    DEAD
    BUST
    LOSS
    EXIT
    FOLD
    LAME
    MESS

    Coincidence?

    No: Fact.

    JM

    #27 5 months ago
  28. bradk825

    @NocturnalB Building on what you said, it takes more than a fanboy to wish for a company’s demise, it takes a complete asshole. Hoping for people to lose their jobs points to a penchant for cruelty.

    #28 5 months ago
  29. zoopdeloop

    @Mike W
    You got me :P still he rarely makes some good points.

    @melon
    hopefully until then you’ll be able to comprehend something beyond Dora the Explorer…”wishful thinking”

    #29 5 months ago
  30. mistermogul

    Where’s ps3fanboy when you want him?

    #30 5 months ago
  31. NocturnalB

    @Joe Musashi

    So what are you implying by this? Sarcasm, or a genuine belief that Sony is going to fail?

    #31 5 months ago
  32. cdcard

    lol, ps4 ain’t going to save you sony

    #32 5 months ago
  33. Mike W

    Derpex definitely put these numbers into a better perspective, something that even Dave Cook failed to do in his own article and we really do appreciate that. :D

    With that being said, these types articles only spread more ignorance and stupidity from the gaming community. Don’t believe me? Just look at “Super3001′s”, “Erthazus’s” and “Nickwpearce’s” comments.

    #33 5 months ago
  34. dreamcastnews

    Why would anybody want to see Sony out of the market? What bearing does it even have on anybody’s lives from a consumer standpoint?

    #34 5 months ago
  35. melonbuster1

    @zoopdeoop I will ask Dora for the map to where they buried you and ps4 when you die from a heart attack upon Hearing Sony files for chapter 11

    #35 5 months ago
  36. Mike W

    @dreamcastnews

    Just ignore the fools bro. God forbid if that will ever happen, the game industry will certainly not be the same and it will definitely be a turn for the worst for us gamers.

    Don’t be surprise that the fanboys are to fucking stupid to see that though. :D

    #36 5 months ago
  37. Mike W

    @melonbuster1

    Lol stop it bro, you’re making yourself look really stupid.

    Just because a company files for bankruptcy doesn’t mean the end for that company. Why won’t you look up the meaning of the word before you start using it.

    #37 5 months ago
  38. NocturnalB

    @dreamcastnews

    It doesn’t. The only people who wish for it are cynical, egotistical, immature, small minded, willfully uninformed, ignorant, arrogant, delusional, sociopathic desk jockeys with an insufficient grip on reality (much less the concept of how a multi-billion dollar corporation is financially operated), selective literary comprehension, and who comment for the reasons of either talking for narcissism’s sake, or as desperate attempt to establish a sense of self worth under the guise of being a self appointed expert in every subject they deem worthy of gracing with their invaluable (and usually invisible) knowledge.

    #38 5 months ago
  39. Eregol

    @NocturnalB
    https://3beautifulbamfs.files.wordpress.com/2011/10/the_rock_clap_clap_gif.gif?w=529

    #39 5 months ago
  40. Gheritt White

    Okay dipshits, lemme see if I understand this correctly.

    “In addition, certain restructuring charges are expected to be recorded ahead of schedule. As a result of these factors, an additional total amount of approximately ¥30 billion in expenses is anticipated to be recorded in the fiscal year ended March 31, 2014.”

    So this means that a $30Bn USD cost that *should* have gone into their 2015 financials has reported early? So, effectively, they’llbe able to report what amounts to a 30 billion dollar upside (or lack of downside, in reality) for the next financial year?

    That’s pretty enormous and is sure to have a positive impact on their share price not too far down the line.

    Did I get that right?

    PS: PS4 IS DOOOOOOOOMED. /sarcasm

    #40 5 months ago
  41. super3001

    #40

    yen. not dollar

    #41 5 months ago
  42. Gheritt White

    @super3001 Oh, right. So what, that;s like… 30, maybe 40 pence? :-)

    #42 5 months ago
  43. ManuOtaku

    Increased losses are never good, but thats not reason to call doom or bankrupt either. They need to focus more on the divisions they have big competotion, tv, laptops, etc or keep only in the side of the business they are doing well.

    They Just need to find the balance between quality and price, and taje the necesary steps to find that balance in those business.

    #43 5 months ago
  44. zoopdeloop

    @Mike W @37
    He is stupid and naive :P

    ps to the retarted (DMan)Super i don’t own a ps4,neither i’m planning to anytime soon ;)

    #44 5 months ago
  45. melonbuster1

    @Mike W I’m just messing with him. I don’t want Sony to go. I have owned every Playstation since the 1st. I have had many ps games and fun times. I love games I was just pulling old dudes chain

    #45 5 months ago
  46. dazedonthemoon

    @melonbuster1 zoopdeloop game_on nickwpearce… Do you guys even realize how terrible the industry would be if Sony failed? With no competition you can bet your little fanboy tushies that Microsoft would raise prices on games from $70 to $80 and upwards. Don’t even wanna think what the price of systems would be. Capitalism is all about competition, without it they will milk as much money from consumers as possible. You call yourselves gamers? Just masses of ignorant internet hatred that isn’t helping anything. Only showing how ugly humanity can be behind a veil of internet anonymity.

    #46 5 months ago

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