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Sony expects to post a fiscal-year loss of more than $2 billion

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Kysen

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Oct 6, 2012
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They are just another me too manufacturer in the mobile space. Totally eclipsed by Samsung ad dollars and undercut by the rest.
 
Apr 10, 2007
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Sure this happened after he became president but you can't put that on him.

Sony will hpefullyvsell their TV division and become a leaner company. I believe that's kaz's vision. This is likely the blast year Sony will post a net loss so WSJ is just hyping it for clicks.



I actually didn't know this. What type of insurance?
Kaz, is that you?
 

Hindle

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Apr 7, 2012
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I think they'll start downsizing the PS division, make a profitable division even more so. They own way too many studios.
 

nhlducks35

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Mar 25, 2012
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Oh, it's a write off? That's still terrible but not as horrible as I thought before.




Vita
Yeah, it just means that the sum of future cash flows for goodwill will be less than the carrying value, so a write-down to the market value of the asset is necessary.

Sony isn't actually losing any cash in this case.
 

freddy

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Jun 7, 2007
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Losing value is pretty bad if it's a trend. I'm seeing people say it's turning around but there's only so long you can blame things on the past administration. If the turnaround doesn't come in the next year or show an upward trend then Kaz will be in trouble.
 

LaserBuddha

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Jul 31, 2007
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Sony spent years making overpriced, underpowered, shitty android phones, and now that they've gotten around to redeeming themselves with the most recent sets, people act like they don't know what the hell you're talking about when speaking of their poor reputation.
 

AniHawk

Member
Jun 7, 2004
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Sure this happened after he became president but you can't put that on him.
i looked up everything for roughly the past 15 years:

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

what was going on in the last decade? why were they cycling through presidents like that? is that normal behavior? was it a knee-jerk reaction to sudden losses?
 

FZZ

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Jun 5, 2013
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I made a prediction a while back Sony would go under 2015.

Maybe 2017 seems more apt.
 

liquidtmd

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Jun 10, 2012
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I made a prediction a while back Sony would go under 2015.

Maybe 2017 seems more apt.
I think the streamlining in terms of laptops et al they are currently doing will start to return them to profitability around 2016 tbh. 2005-2012 just saw them overstretch themselves and lose a focus.
 

mrklaw

MrArseFace
Jun 10, 2004
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What happened? PS4 is doing well, their losses were being stemmed fairly ok recently (2bn - 1bn - 500m). Should have been looking to break even soon.
 

xbhaskarx

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Aug 13, 2007
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What does a fail blog know about a thriving business.
fy ending march 2009: $1 billion net loss
fy ending march 2010: $3.1 billion net loss
fy ending march 2011: $2 billion net loss
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
$11.75 billion total loss over the past 7 years... I'd hate to see what a struggling business looks like.
 

c0de

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Aug 22, 2012
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Precisely! There isn't a problem. This is some fanboy gloom and doom bullshit! Plain and simple. Sony has been losing billions for years now and they're still going. They release good products with descent to god-tier quality and they have the #1 console in the world. Driveclub is coming out and they have Bloodbourn. Destany which launches on PS4 as the premier console has sold nearly a $1billion. I can go on about the new IPs and indie games that lead on their platform. No man's sky, and they also have steam on the PS3. Its the most extensive ecosystem for games and they're not spending their money to buy exclusives. As you stated, they make excellent phones and tablets too. People knock them because they're coming out of a terrible mess made by someone who doesn't understand how a Japanese company works. Kaz is fixing things and we just need to give Sony more time. Let Engadget write their ketchup article. What does a fail blog know about a thriving business. Remember the PS3? Now look at the PS4 -- yeah, exactly! Movies, TV, computers, portables.... never count out the comeback kid <3
Wow, so much compressed love for a company...
Btw, would be a nice nick...
 

FZZ

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Jun 5, 2013
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I think the streamlining in terms of laptops et al they are currently doing will start to return them to profitability around 2016 tbh. 2005-2012 just saw them overstretch themselves and lose a focus.
Idk I just don't see Sony products resonating with consumers as well as they used to. They make amazing hardware and it's a shame they were mismanaged for so long.

And in 2 years you can change your prediction yet again. Are you an Analyst? ;)
Lolno I'm an 18 year old business student. I know jack shit, I made that prediction when I was 16 and pulled it outta my ass. I just don't seem them becoming consistently profitable anytime soon so I don't think they can keep bleeding billions for that long. But again I'm still learning about this stuff so I don't know how long they'll last.
 

coolasj19

Why are you reading my tag instead of the title of my post?
Jul 3, 2013
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I think they'll start downsizing the PS division, make a profitable division even more so. They own way too many studios.
Mmmmmm yummy fudge.

Anyway, what's the cause of this one? Is it the Vaio write-off or something similar? Seems like they overpredicted their phones revenue and finally sucked down the loss, like what Nintendo did for the WiiU earlier this year?
 
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liquidtmd

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Jun 10, 2012
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What happened? PS4 is doing well, their losses were being stemmed fairly ok recently (2bn - 1bn - 500m). Should have been looking to break even soon.
In terms of the Playstation division, they are doing well. The couple of years pre-launch and usually initial year or so are always difficult as you factor in R&D costs / Launch Marketing etc. Unfortunately Sony's problem is that they have their fingers in too many pies. They really need to cut down the sheer number of models they launch under their other divisions and really focus on what they do well.
 

Member876

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Mario007

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Not sure if serious? The Xperia line is one of the top tier quality handsets around right now. The Xperia Z3 Compact is a beast
The problem is Xperia Z line is doing great. Anything else is a throwaway product that seems to underperform. In 2012 Sony was known for its mid-range and entry level phones. These days those are exactly the type of phones you should avoid. They fucked up majorly this year in those segments because they thought "ah sure we'll just release a lot of models and that should increase our marketshare". The Z line is fine...but the problem is that's the only line that IS fine in the smartphone division.
 

Averon

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Aug 27, 2008
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Makes you wonder what the hell went down at Sony. I mean, wasn't the mobile division profitable past three years? I even remember the division having upward trend from YOY in regards of sales and profits. They weren't making big numbers but profit nonetheless.
They flooded the market with cheap low-end and mid range phones that had razor thin profit margins that didn't sell. That's what happened. They also stubbornly refused to engage the NA market and gave their phones confusing names that differ only by a single letter.

They should focus on the Z and Z compact lines. Those actually sell and have positive consumer feedback. Jettison everything else.
 

liquidtmd

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Jun 10, 2012
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Makes you wonder what the hell went down at Sony. I mean, wasn't the mobile division profitable past three years? I even remember the division having upward trend from YOY in regards of sales and profits. They weren't making big numbers but profit nonetheless.
As as big Sony phone fan (currently a proud Xperia Z1 compact owner), I'll tell you what the problem is - a quick Google Search will show you 40-50+ makes and models released in the last 3-4 years.

That's crazy for the scale of some of these launches. They're competing against themselves as well as their rivals with some of their products.

The problem is Xperia Z line is doing great. Anything else is a throwaway product that seems to underperform. In 2012 Sony was known for its mid-range and entry level phones. These days those are exactly the type of phones you should avoid. They fucked up majorly this year in those segments because they thought "ah sure we'll just release a lot of models and that should increase our marketshare". The Z line is fine...but the problem is that's the only line that IS fine in the smartphone division.
Exactly, sorry the guy I was replying to seemed to imply 'LOL Sony phones, they suck'. They don't. Even the mid-range ones assessed on their own merits were OK. They just oversaturated an already oversaturated market.
 

zomgbbqftw

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Jan 21, 2011
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On the one hand it is a goodwill impairment, so it won't really effect the bottom line, on the other it means Sony have effectively declared that they aren't going to make significant profit from the division any time soon.

On wonders why they didn't do this with VAIO back in 2012 or earlier. Personally I don't think any of their electronics divisions can claim to have long term profitably and this should have happened years ago.

Otherwise the projection is just 180bn yen lower than before so the actual operating outlook hasn't changed significantly. One does wonder why this charge had been included in the Operating results though, surely this does not count as an operating cost, rather a one off impairment, especially since they are writing off the entirety of the goodwill associated with the mobile division.
 

Member876

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Jul 26, 2014
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As as big Sony phone fan (currently a proud Xperia Z1 compact owner), I'll tell you what the problem is - a quick Google Search will show you 40-50+ makes and models released in the last 3-4 years.

That's crazy for the scale of some of these launches. They're competing against themselves as well as their rivals with some of their products.



Exactly, sorry the guy I was replying to seemed to imply 'LOL Sony phones, they suck'. They don't. Even the mid-range ones assessed on their own merits were OK. They just oversaturated an already oversaturated market.
Oh, ok. I have only seen them selling the flagship models here, so I thought they were already focusing only on the premium phones. Z2 is easily the best phone I have ever owned. The build quality alone is such enormous step ahead the competition.
 

Mario007

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Dec 26, 2011
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On the one hand it is a goodwill impairment, so it won't really effect the bottom line, on the other it means Sony have effectively declared that they aren't going to make significant profit from the division any time soon.

On wonders why they didn't do this with VAIO back in 2012 or earlier. Personally I don't think any of their electronics divisions can claim to have long term profitably and this should have happened years ago.

Otherwise the projection is just 180bn yen lower than before so the actual operating outlook hasn't changed significantly. One does wonder why this charge had been included in the Operating results though, surely this does not count as an operating cost, rather a one off impairment, especially since they are writing off the entirety of the goodwill associated with the mobile division.
Yeah it is quite strange. It's almost as if the new leadership in the division was basically given a clean slate to start over again with a "it can't possibly get any worse" mentality. Seeing that you mention that it is Kaz himself taking over this, I imagine he would like to protect himself against a failure (ie needing to take an impairment loss again in the future while he's at helm) and to be able to maximise on his success (ie every bit of profit the division makes from now on basically is an added bonus).

It could also point towards the fact that the manufacturing pipeline for the next 12 months or more is already full with lots of products that Sony has no faith in (like the Xperia T, V or J that received almost no marketing push back in 2012).

The problem here is that this is yet another restructuring and change of strategy in the mobile division. SE went through at least 1 since the smartphone are began, then Sony changed its strategy after the buyout (finally offering flagships etc) and now again we are at a restructuring point.
 

One4U

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Aug 19, 2014
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It is time for Sony to join Windows Phone... Joke...

What if Sony becomes a company only for games, movies & insurance? I think under these 3 business, Sony will get profits for sure.
 

Mario007

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Dec 26, 2011
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It is time for Sony to join Windows Phone... Joke...

What if Sony becomes a company only for games, movies & insurance? I think under these 3 business, Sony will get profits for sure.
Add music and cameras there too.
 

Member876

Banned
Jul 26, 2014
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It is time for Sony to join Windows Phone... Joke...

What if Sony becomes a company only for games, movies & insurance? I think under these 3 business, Sony will get profits for sure.
They are already expanding into real estate, and are planning starting various new business divisions. Panasonic did something similar and they have managed to become profitable again.
 

zomgbbqftw

Banned
Jan 21, 2011
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Yeah it is quite strange. It's almost as if the new leadership in the division was basically given a clean slate to start over again with a "it can't possibly get any worse" mentality. Seeing that you mention that it is Kaz himself taking over this, I imagine he would like to protect himself against a failure (ie needing to take an impairment loss again in the future while he's at helm) and to be able to maximise on his success (ie every bit of profit the division makes from now on basically is an added bonus).

It could also point towards the fact that the manufacturing pipeline for the next 12 months or more is already full with lots of products that Sony has no faith in (like the Xperia T, V or J that received almost no marketing push back in 2012).

The problem here is that this is yet another restructuring and change of strategy in the mobile division. SE went through at least 1 since the smartphone are began, then Sony changed its strategy after the buyout (finally offering flagships etc) and now again we are at a restructuring point.
The mid range strategy can be made to work, the problem is that the old management are too stuck to Sony as a high end brand so even dud phones like the T3 sell for £299. No one in their right mind is going to spend £299 on the T3 and Sony are confirming that view today. However, instead of cutting prices and targeting a volume business they have decided that what they need to do is rationalise their mid range offering. That will allow them yo cut costs but it won't increase sales, Sony isn't good value for money in the mid range sector. Every single one of their mid range devices could use a £100/€120 price cut except the T2 Ultra which is competitively priced at £285.

The other issue is half arsing the lower mid range phones, the M2 has a 960x540 screen with a low DPI rating. Putting in a HD screen and 8mp camera and calling it the T3 Compact would have been the better strategy. Worse still the M2 is pretty expensive for what is on offer compared to the Moto G which is in the same price bracket. Again poor value for money because the old management want to stick to this image of Sony as a high end brand that commands a brand premium like Apple.

I made my views on the Z3 tablet compact pretty clear in the thread and I believe this write down vindicates that view. Android tablets are mid range products regardless of how well a company tries to make them premium products, coming in at a higher price than the iPad Mini retina means they will sell very few units and then be left scratching their heads as to why that happened just like this MRP.
 

Crossing Eden

Hello, my name is Yves Guillemot, Vivendi S.A.'s Employee of the Month!
Feb 14, 2014
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Precisely! There isn't a problem. This is some fanboy gloom and doom bullshit! Plain and simple. Sony has been losing billions for years now and they're still going. They release good products with descent to god-tier quality and they have the #1 console in the world. Driveclub is coming out and they have Bloodbourn. Destany which launches on PS4 as the premier console has sold nearly a $1billion. I can go on about the new IPs and indie games that lead on their platform. No man's sky, and they also have steam on the PS3. Its the most extensive ecosystem for games and they're not spending their money to buy exclusives. As you stated, they make excellent phones and tablets too. People knock them because they're coming out of a terrible mess made by someone who doesn't understand how a Japanese company works. Kaz is fixing things and we just need to give Sony more time. Let Engadget write their ketchup article. What does a fail blog know about a thriving business. Remember the PS3? Now look at the PS4 -- yeah, exactly! Movies, TV, computers, portables.... never count out the comeback kid <3Kaz has been fixing the problems caused by Stringer. Why would you get rid of the guy who is effectively healing the company?
Yet another fiscal year of profit loss isn't a problem? I don't think you should ever be in business. Also Activision made most of the profit off of "Destany," not Sony. And DriveClub most likely won't make a billion profit or anywhere near close to "Destany's" profits. This isn't a console war, this is a company losing yet another shit ton of money. >.>
 

Radec

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Sep 2, 2010
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It is time for Sony to join Windows Phone... Joke...

What if Sony becomes a company only for games, movies & insurance? I think under these 3 business, Sony will get profits for sure.
They won't let go of their Camera division.

Too many companies rely on Sony's sensors nowadays. DSLR, Mobile Phone, Mirrorless.
 

Lubricus

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Mar 21, 2014
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Maybe a new phone company?

In a news release, Sony said it would focus more on its higher-end phones and cut the number of phones in its midrange lineup. It also said it would change the strategy for the division in certain areas without elaborating.

Last year, Sony’s mobile phone division was its most profitable, but the company has faced falling sales as competition from Asian rivals in midrange smartphones has intensified. For instance, in the world’s largest smartphone market, China, companies like Huawei and Xiaomi have become dominant.

Meanwhile, at the higher end, the company faces tough rivals in Apple and Samsung. Analysts said that Sony’s new Xperia Z3 smartphone could struggle as its release coincided with the announcement of the new Apple iPhone 6.

Still, others have been positive about Sony’s handset unit, pointing out that a more modest plan aimed at the company’s strongest markets, like Japan, could prove successful.

“This seems to be the end game for Sony as a major player in consumer electronics; it’s a bit of a bellwether moment,” said Pelham Smithers, managing director of Pelham Smithers Associates.

Mr. Smithers said he believed devaluation of the mobile communications unit could lead to a spinoff of the company’s mobile phone division in what would be the final step of the company separating itself from its struggling major consumer electronics divisions.This year, Sony sold its computer division and spun off its TV group into a separate unit.

“Going forward, Sony’s exposure could essentially be to specialist areas like cameras and video games, software, Sony pictures and Sony music,” Mr. Smithers said.
http://www.nytimes.com/2014/09/18/business/international/sony-widens-expected-loss-to-2-14-billion.html?src=busln&_r=0
 
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