Sony reports annual loss of $1.25 billion despite strong PlayStation 4, smartphone sales

[Shawn Knight]

Despite a strong showing from the PlayStation 4 and its line of smartphones, Sony on Wednesday reported a ¥128.4 billion ($1.25 billion) net loss for the 2013 fiscal year. Things aren’t expected to get better anytime soon either as the Japanese tech giant is expecting a loss of ¥50 billion ($489 million) for the next fiscal year ending in March 2015.

Sony said sales were up 14.3 percent compared to 2012 with the smartphone division actually turning a profit. The gaming division also turned in a solid performance with sales of $9.5 billion – that’s up 38.5 percent year over year. Overall, Sony bought in $76 billion in sales during the year-long period.

The loss is largely credited to costs associated with restructuring which will continue throughout this year. If you recall, Sony announced in February that they were selling their entire PC division to Japan Industrial Partners for an undisclosed sum and would be laying off 5,000 staff members globally.

Selling an entire division would seem like a quick way to generate revenue but the truth of the matter is that Sony had to record write-downs for excess components in inventory and compensate suppliers for unused components that would have went into their spring PC lineup.

Sony also cited shrinking demand for disc-based media as another reason for the loss.

Do you think Sony’s woes are indeed temporary and will pass once the restructuring efforts are complete or are its better days in now in the rearview mirror?

Permalink to story.

https://www.techspot.com/news/56763-sony-reports-annual-loss-of-125-billion-despite-strong-playstation-4-smartphone-sales.html

 

[Jad Chaar]

"Sony also cited shrinking demand for disc-based media as another reason for the loss."
Haha wow Sony.

 

[treetops]

" If you recall, Sony announced in February that they were selling their entire PC division to Japan Industrial Partners for an undisclosed sum and would be laying off 5,000 staff members globally."

So we really do not know if they did better or worse last year.

 

[davislane1]

If there is another forum I am supposed to post this to, my apologies. A suggestion for Techspot articles concerning company financials: Don't cite sales numbers without proper context.

For instance, the article above makes the following statement:

"The gaming division also turned in a solid performance with sales of $9.5 billion – that’s up 38.5 percent year over year. "

So their gaming division is doing pretty well, then? Not as well as the preceding statement would lead us to believe. From the article linked in the post (emphasis added):

"All in all, sales across the gaming division were up 38.5 percent, raking in a whopping $9.5 billion for the company. All that money couldn't help the gaming division shake off an operating loss of $79 million, however, which the company attributed to both the cost of launching the PlayStation 4, as well as a $60 million write-off PC titles from Sony Online Entertainment."

Sales figures always have to be coupled with the costs of doing business to get an accurate picture of what's happening within the company. Omitting the latter makes the information unusable. Their overall performance was framed correctly in the opening paragraph, but the same things needs to be done when referencing specific divisions.

Hopefully you guys find this helpful.

 

[tipstir]

Everyone online playing PC multi-player games around the clock. I don't see the draw into spending for console systems when PC's can be has powerful. SONY has SOE Games so they know already the draw to online games. Perfect World (ARC), SONY (SOE) and Kixeye just some of the most popular and more of the draw.

 

[Skidmarksdeluxe]

What these huge manufacturers tend to forget is that we're still in the throes of a worldwide recession, everybody's feeling the pinch (well I am at least). When it finally lifts I'm sure they'll come out swinging.

 

[Guest]

Well maybe, Sony just, reported a loss, and thought, oh well, restructuring, recession.
The only questions, seem to come from the article writer themselves, and leave you thinking, "what will Sony ever do now?" or "what can this mean to me?".

Nothing. Now go on with your lives.

And to bring the whole console < PC argument up again. Jeez. Give it a rest.
Especially when the Gaming division, which I would assume deals with consoles or their games too, made all the money. Developers love consoles. Its free money. Charging twice as much to console owners who can't wait for price drops.

 

[Aric B]

The man has a point, I am tired of seeing numbers without more solid evidence... To many people claiming something, and a couple years later ending in lawsuit.