Critically, the core business is actually marginally profitable and they decreased their net indebtedness by around $500m over the year and increased their revolving finance facilities to over $7bn (access to money if they need it, Moody's am cry). A lot of the losses over the last few years have been paper losses, asset impairments, DTA write downs and such. What that means is money either spent in the past or in the case of a DTA, the asset taken on for tax losses carried forwards, are now being written off as they are not going to get that money back. They spent the money, previously and now they won't get it back through their normal operations.
It is a huge difference to a company that actually loses money outright where their normal operations cost more than the revenue they generate from sales. Nintendo are in this category which is why their situation seems worse than Sony's and they don't really have a clear path to recovery like Sony (getting rid of the TV division) because their problems stem from deeper issues such as smartphones killing their handheld business and being stupidly uncompetitive in the home console market.
For all their current faults, Sony still have a profitable smartphones division, a hugely profitable financial services division, their content division (pictures+music) reliably makes $1bn per year in operating profit and their games division seems to be recovering very nicely after the PS3 caused so much turmoil. In essence if they jettison the TV division they would be pretty healthy and though they would hold a significant amount of debt but they would be profitable, more than enough to redeem bonds and meet their financial obligations. I guess the issue is that it has cost Sony $1.7bn to exit PCs and I expect the cost of exiting TVs would be double because all 30,000 employees would need paying off and the losses on current stock and contracts would need to be written off.
Essentially, though it is true they lose money, a lot of it is on paper, and the core business is generating cash.
I wonder how much their current financial situation is affecting 1st party development. Maybe this is why we have had such strange news post PS4 launch with their studios.
Unbelievable. When are these guys going to finally fire Iwata?
Interesting, didn't know that.We have accurate figures now:
2011/12 - 29bn yen operating profit.
2012/13 - 1.7bn yen operating profit.
2013/14 - (8.1bn) yen operating loss.
Sony have restated some of their historical obfuscations. That graph can be reasonably updated now with these figures as they are, to my knowledge, accurate and represent the games+SEN division only.
Network Services is SEN/PSN, a core part of the games business. It is all part and parcel of delivering games content. PS Now investment will be what is causing the losses for that segment. It should be included for the purposes of the graph as PS+ sub fees are probably recorded in that division.
Sure, they will all buy Samsung and LG...
The PC division is set to lose another 80-90bn yen in the coming year with very little income from it (almost none). That wipes out their profits and then some. Other than that it is the same issues as before. Sony are still paying too much tax, their costs are still too high, and they are involved in far too many commodity markets.
Nothing to report really, without knowing the mix of the 17m units they expect to sell over the coming year passing any kind of judgement is tough. I have it down as 4m PS3 and 13m PS4, but it could be different. I also think 17m is a conservative estimate, I think after years of downgrading forecasts they want to give some upside throughout the year. 17m is still a decent YoY increase and a good starting base for them.
Profitability should return as they ramp up network services, that they have included SEN in the division name is a good sign.
The hardware forecast also means there is little to no chance of a PS3 price cut this year unless they expect fewer than 10m PS4 sales.
Vita = dead.
There are no building sales gains booked in the last fiscal year that I recall.Thank you for the overview!
Would you happen to know how much did the sale of the buildings affect the results? Were they added to the core business or were they calculated separately. I see that they sold them form 2.2 billion, so I presume these numbers would be uglier without them?
Have they officially offloaded the PC division ? Are they going to get rid of TVs?
PS3 is deteriorating much more quickly than I expected. That thing was a loser from end to end.
Sony is doomed?
Even without the PC software impairment of 6.2 billion yen, Game business would still have lost 1.9 billion yen.
Tired of rolling my eyes at Sony restructuring segments again.
I don't know what the hell "Network Services" they're including with Game are, but I know they''re not a good thing.
Game operating income
FY2013
without NS: -8.1 bn
with NS: -18.8 bn
negative impact of 10.7 billion yen
FY2012
without NS: +1.7 bn
with NS: -3.7 bn
negative impact of 5.4 billion yen
Some terribly lossy operation.
And the old style:
More charts will be difficult until Sony start reporting Game separately again. =\
Bingo.Unbelievable. When are these guys going to finally fire Iwata?
1) you are seeing negative articles and reporting in the Real Adult financial press. It's the top story in the WSJ this morning.Bingo.
Funny that we aren't seeing tons of articles declaring the end of Sony.
Hopefully they can get their shit together soon but I don't have any faith.
That Sony is in real trouble but it seems mostly glossed over by gamers and the gaming press.1) you are seeing negative articles and reporting in the Real Adult financial press. It's the top story in the WSJ this morning.
2) the games press, like most gamers, is not trained at reading and reporting financial news. So asking why you don't see reporting calling for the end of Sony is like asking why you don't see articles asking where the sun went overnight. Eventually people learn they don't get it.
What's your point?
It's pretty disappointing they continue to have to state so much in paper/non-cash losses. The restructuring effort is taking too long and costing too much. EBITDA looks healthier and I believe, just from doing super quick math, they have positive FCF.
They need to really make some decisive moves around restructuring. And I'm also tired of seeing their core business impaired due to shitty stuff happening. Battery impairment. Smh.
We shall see.Yeah, you gave the games press exactly how much time to react to this news?
17 million consoles and 3.5 million handhelds sounds a bit aggressive, no?
The PS3 has dropped off a cliff and PSP and Vjta (in the west) are almost nonexistent..
Handhelds: 1.5 million for Vita in Japan + 1 million elsewhere + 1 million PSPs for developing world. Don't think that is too aggressive
Consoles: 5-6 million PS3s and 11-12 million PS4s. I don't think that is too aggressive either with holiday spike for PS4. Even PS3 did over 13 million during its peak year and PS4 is market leader.
It's pretty disappointing they continue to have to state so much in paper/non-cash losses. The restructuring effort is taking too long and costing too much. EBITDA looks healthier and I believe, just from doing super quick math, they have positive FCF.
They need to really make some decisive moves around restructuring. And I'm also tired of seeing their core business impaired due to shitty stuff happening. Battery impairment. Smh.
More like 13-14 million PS4 and 4-3 million PS3.
Last gen is dead.
It's pretty disappointing they continue to have to state so much in paper/non-cash losses. The restructuring effort is taking too long and costing too much. EBITDA looks healthier and I believe, just from doing super quick math, they have positive FCF.
They need to really make some decisive moves around restructuring. And I'm also tired of seeing their core business impaired due to shitty stuff happening. Battery impairment. Smh.
I'd rather see Sony die trying than sell their TV division. I will never buy any TV that is not sony.
The game division lost $78M? Shit, how is that possible? What was driving this? The Vita????
Bingo.
Funny that we aren't seeing tons of articles declaring the end of Sony.
Hopefully they can get their shit together soon but I don't have any faith.
Launching a new hardware is not cheap. They lost money during launch years of PS1, PS2 and PS3 too
No webm.
Both aont leverages debt they are both in crazy debt and have something like 10bil in cash and cash like assets.Does Sony have a pool of funds like Nintendo that these losses come out of, or is Sony in debt?
Hope Sony can turn things around, I would hate to see their TV, and console business go belly up
Maybe their PlayStation business can be spun off as a separate entity if everything goes south...
Bingo.
Funny that we aren't seeing tons of articles declaring the end of Sony.
Hopefully they can get their shit together soon but I don't have any faith.