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[mocoworm]

Has this been posted? I couldn't find it.

http://www.eurogamer.net/articles/2014-09-17-sony-quadruples-forecast-loss-for-financial-year

PlayStation maker Sony has quadrupled the amount of money it expects to lose this financial year in a profit warning it blamed on smartphones.

Sony described it as "the impairment of goodwill in the mobile communications segment", which means it had another look at its Xperia smartphones business and found it in even worse shape than it thought it was in.

The impairment amounts to 180 billion yen - or a whopping £1.04 billion - and this is how it affects Sony's bottom line: in July the company said it expected to make a loss of 50 billion yen for the financial year. Now, it reckons it'll make a loss of 230 billion yen - or £1.3 billion. It now expects an operating loss of 40 billion yen instead of the 140 billion yen profit it forecast in July.

While the PlayStation business - fuelled by the success of PlayStation 4 - continues to perform well, the wider Sony Corporation is struggling. This is the sixth downward revision under boss Kaz Hirai, who took the top job on in 2012 promising to return the company to profit.

 

[weekev]

Its a shame, really hope they can turn things around. IMHO best Smartphone and console design is Sony's.

 

[Sephiroth_GR_]

Blame smartphones

 

[KyleCross]

Thanks casuals. /s

 

[Averon]

Blame smartphones

Yup. Sony's silly mobile strategy finally caught up to them.

 

[SgtCobra]

They won't catch a break financially.
Oh yeah, doooooomed.

 

[Kosma]

Playstation should be split off from Sony.

 

[Suzzopher]

I really like my Xperia Z2, easily the best phone I have owned. Shame they aren't catching on.

 

[MasterChef420]

Will amazon buy Sony?

 

[coolasj19]

Yes, this is old. It's already in Off Topic where it belongs.

Let me see how much I can inb4 lock.

Sell Spider-Man.
Sell PlayStation.
Sell another building lol.
Minecraft sold for 2.5b.
SCE is gonna go into cost cutting mode. Half of WWS studios probably gonna close.
Will there be a PS5?
Dooooomed.

 

[MrCookiepants]

That's a shame. My mum has an Xperia and she loves it more than her previous Samsung. It's a nice phone.

 

[1st Course]

2 month article from WSJ: Sony's Smartphone Struggle

Edit: I don't know why link don't she the whole article. Just google "wsj sony smartphone"

Basically Chinese smartphone manfactures are eating into everyone share.

 

[DaSorcerer7]

Wow, that's pretty bad.

 

[Noisepurge]

Playstation should be split off from Sony.

indeed, or just stop making phones and tv's if they aren't selling.

 

[speculawyer]

TV division is probably bleeding a lot of money.

 

[SparkTR]

Weren't smartphones promising for them? I mean I thought it was their Vaio business that was weighing them down, and that Smartphones were going to make up for that. Or maybe that analyst that posts here is correct, and Sony is doing too little too late as the ship sinks?

 

[Open Source]

Hey, but we can buy used games on PS4, so everything will return to being sunshine and roses any day now.

 

[Zeuanimals]

Weren't smartphones promising for them? I mean I thought it was their Vaio business that was weighing them down, and that Smartphones were going to make up for that. Or maybe that analyst that posts here is correct, and Sony is doing too little too late as the ship sinks?

The Z2's release had a lot of issues, though. Did it even release in the US yet? Also, it's not available for all carriers.

 

[kinoki]

I also blame their smartphones. While being incredibly functional. Probably the best smartphones on the market they're totally tonedeaf when it comes to market wants and needs. Their naming of the products is confusing and downright counter-productive for the consumers. What's best a E1 Dual or a Z1 Compact or perhaps a T2 Ultra Dual?

Cut 90% of the products offered in smartphones. Change their naming policy. Stream line the products for the market.

 

[Averon]

TV division is probably bleeding a lot of money.

Nope. It's the mobile unit this time. Sony tried to flood the market with cheap low and mid range phones in an attempt to gain market share. People didn't buy them, so now they have to write down $1.7 billion worth of value from their mobile unit.

 

[mocoworm]

Yes, this is old. It's already in Off Topic where it belongs.

I don't see how it is off-topic when division budgets are set by the higher company. If they are losing so much money then those budgets could be affected, including gaming.

It's like any company. I work in the marketing dept of my company. If there is a cashflow problem, our marketing budget is cut in line with ever other dept. Everything is offset with everything else. There is always a finite pot of cash.

 

[Mihael Mello Keehl]

If they are blaming smartphones..did they stop making smartphones?

 

[coldone]

$1.67B is just on phones. The total loss is a staggering $2.1B for the year.

sony-forecasts-2-1-billion-loss-this-year-due-to-its-smartphone-business/

 

[romulus91]

stop spending money on stuff losing money, spend money on stuff making money = make more money

forgive my corporate ignorance but what stops a subsidiary from spinning off ? Shareholders? Ensuring sony stays solvent?

 

[Gorillaz]

So many dead limbs in the competition, wonder how fucked they would be without Playstation division and there side hustle of life insurance

 

[Mael]

Yes, this is old. It's already in Off Topic where it belongs.

Let me see how much I can inb4 lock.

Sell Spider-Man.
Sell PlayStation.
Sell another building lol.
Minecraft sold for 2.5b.
SCE is gonna go into cost cutting mode. Half of WWS studios probably gonna close.
Will there be a PS5?
Dooooomed.

Wut?

 

[Percy]

They'll be gone by 2016.

 

[spwolf]

Has this been posted? I couldn't find it.

http://www.eurogamer.net/articles/2014-09-17-sony-quadruples-forecast-loss-for-financial-year

they are writing off value of smartphone business in the books, not actual loss from the mobile, apparently they expect sales to be steady.

As previously disclosed, in light of the historical results and the operating environment surrounding the MC
segment, Sony began a review of its MRP for the MC segment in July 2014 and has revised the MRP for the MC
segment. This new MRP reflects lower expected future cash flows compared to the previous MRP. As a result,
Sony determined that the fair value of the MC business has decreased. Accordingly, Sony will record an
impairment charge of approximately 180 billion yen, the entire amount of goodwill in the MC segment, in the
second quarter of the current fiscal year.

 

[rrc1594]

$1.67B is just on phones. The total loss is a staggering $2.1B for the year.

sony-forecasts-2-1-billion-loss-this-year-due-to-its-smartphone-business/

So Notch just made more money then Sony this year?

 

[mocoworm]

So Notch just made more money then Sony this year?

I hadn't thought of that. That is INSANE.

[EDIT] Notch made more than the SONY losses I mean.

 

[Thoraxes]

Holy shit.

 

[AniHawk]

So Notch just made more money then Sony this year?

i would bet almost everyone on neogaf is making more money than sony this year.

 

[Lionheart]

I always thought it was a bit optimistic to double down on smart phones so much when the market is (and was) so crowded already. Then again, any popular electronics market seems crowded nowadays. What's left where Sony still has much of a chance to play a big role in consumer electronics? Cameras and gaming? Audio?

 

[Oublieux]

Nope. It's the mobile unit this time. Sony tried to flood the market with cheap low and mid range phones in an attempt to gain market share. People didn't buy them, so now they have to write down $1.7 billion worth of value from their mobile unit.

It's kind of sad. The Sony phones are actually pretty damn good. My friend nabbed an Xperia Z2 a few months ago, and I can easily see myself getting it or its successor. For the price, it has a bevy of functional features in comparison to other premium phones and can run for about two days between charges.

 

[rrc1594]

i would bet almost everyone on neogaf is making more money than sony this year.

LMAO

 

[SgtCobra]

So Notch just made more money then Sony this year?

Even I made more money than Sony today.

Insane huh?

They'll be gone by 2016.

Okay, doomed confirmed

 

[AniHawk]

They'll be gone by 2016.

i keep seeing this sentiment, but what's the reasoning behind it? i know they're in debt and they keep posting losses, but don't they have enough other stuff that they can basically be in business for another decade or so before things get really dire?

i had no idea they cycled through four presidents since 2000 though. that can't be normal.

kunitake andō becomes president of sony corp.
fy ending march 2001: $134 million net income
fy ending march 2002: $115 million net income
fy ending march 2003: $963 million net income
fy ending march 2004: $851 million net income
fy ending march 2005: $1.5 billion net income
half-decade: average yearly net income: $712 million

ryōji chūbachi becomes president of sony corp.
fy ending march 2006: $1 billion net income
fy ending march 2007: $1 billion net income
fy ending march 2008: $3.6 billion net income
fy ending march 2009: $1 billion net loss
howard stringer becomes president of sony corp.
fy ending march 2010: $3.1 billion net loss
half-decade: average yearly net income: $500 million

fy ending march 2011: $2 billion net loss
kaz hirai becomes president of sony corp.
fy ending march 2012: $4 billion net loss
fy ending march 2013: $1 billion net income
fy ending march 2014: $640 million net loss
fy ending march 2015 (projected): $2 billion net loss
half-decade: average yearly net loss: $1.5 billion

 

[spwolf]

So many dead limbs in the competition, wonder how fucked they would be without Playstation division and there side hustle of life insurance

Playstation business is actually the lowest earner of them all, after mobile. Presumably because they are investing a lot in both of them.

It is hard for people to get that because they are #1 in gaming and are turning profit. They are projected to make a lot more money from Camera's, Sound and BD/DVD discs, Semiconductors, Pictures, Music and Financial segments.

 

[LicenceToK1ll]

Thats too bad because they make great smartphones but people rather buy a crappy Samsung or Chinese knock-off it seems.

 

[Garrett Hawke]

Why don't they drop the businesses that aren't working for them, and focus on the ones that are?

I'm sure it's not that easy, but something along those lines?

 

[Infinite Xero]

Seems like all Sony can do is lose money. They have so many divisions in different industries yet the still lose money. Smh. Is it really THAT hard to accurately scale your production Sony? How can they continue doing this for so many years? It's truly unbelievable.

 

[wapplew]

Why don't they drop the businesses that aren't working for them, and focus on the ones that are?

I'm sure it's not that easy, but something along those lines?

Lots of people's jobs on the line?

 

[AniHawk]

Why don't they drop the businesses that aren't working for them, and focus on the ones that are?

I'm sure it's not that easy, but something along those lines?

i think they're doing that - shutting down pc and spinning off tvs. not sure what the fate of smartphones will be after this. they also are getting into real estate.

 

[sono]

They should have concentrated more on Vita

 

[SparkTR]

So Notch just made more money then Sony this year?

YOU made more money than Sony this year.

 

[El-Pistolero]

These are paper losses, as in write-offs. So the company could be making money and doing okayish. One should have a look at the cash flow statement as well.
Still, quite grim prospects for the futur if a segment as promising initially as that of smartphones fails to deliver. Sony should consider further downsizing...

 

[Ethelwulf]

Honest question: How can a corporation this big survive after such a loss? Aren't these very bad news?

 

[Ramrock]

i keep seeing this sentiment, but what's the reasoning behind it? i know they're in debt and they keep posting losses, but don't they have enough other stuff that they can basically be in business for another decade or so before things get really dire?

i had no idea they cycled through four presidents since 2000 though. that can't be normal.

kunitake andō becomes president of sony corp.
fy ending march 2001: $134 million net income
fy ending march 2002: $115 million net income
fy ending march 2003: $963 million net income
fy ending march 2004: $851 million net income
fy ending march 2005: $1.5 billion net income
half-decade: average yearly net income: $712 million

ryōji chūbachi becomes president of sony corp.
fy ending march 2006: $1 billion net income
fy ending march 2007: $1 billion net income
fy ending march 2008: $3.6 billion net income
fy ending march 2009: $1 billion net loss
howard stringer becomes president of sony corp.
fy ending march 2010: $3.1 billion net loss
half-decade: average yearly net income: $500 million

fy ending march 2011: $2 billion net loss
kaz hirai becomes president of sony corp.
fy ending march 2012: $4 billion net loss
fy ending march 2013: $1 billion net income
fy ending march 2014: $640 million net loss
fy ending march 2015 (projected): $2 billion net loss
half-decade: average yearly net loss: $1.5 billion

Last time I've looked into all of this (~December 2013), Sony has about ~160 billion dollars of assets. Additionally, Sony has ~19 billion dollars cash on-hand.
So they still have stuff to work with for a long time.

 

[Odah]

They'll probably sell some buildings again.

Can they?

 

[stryke]

How well would SCE survive if it were to be spun off?

Where would it get the capital to invest in expensive stuff like tech R&D?

(yeah, I'm pretty fucking naive about this shit)