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Sony CEO Apologizes as PS4 Maker Restructures for Growth

Chief Executive Officer Kazuo Hirai apologized to investors after the company forecast a sixth loss in seven years, and he pledged that his restructuring efforts would fuel the electronics maker’s long-term growth.

“Sorry that we failed to meet shareholders’ expectations,” Hirai said at the company’s annual meeting in Tokyo. “We will bear responsibility to complete restructuring in fiscal 2014, with a strong sense of crisis and without further delay.”

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bloomberg.com
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DLConspiracy766d ago

Kind of scary.. Hope they get it together. SONY I mean. It affects everything they do NOT just PS4. Including the music software I use for a living.

bicfitness766d ago (Edited 766d ago )

Read the article? Its the TV buisiness that's killing their profit, movie, cellphones and gaming are all doing quite well. He's turning it around, its just not happening fast enough for some investors. Its all written in the article. No concern trolling is necessary.

Septic766d ago

"No concern trolling is necessary"

Alright calm down mate. Its not exactly trolling is it? (Hardly on the level of what you do on here).

But yeah, I do agree its a lot of unnecessary gloom and doom from investors.

"“The shocking thing for me was too many excuses,” Renate said. “Sony is really going down.”"

This just sounds like a bit too much panic. I think Sony are recovering from difficult times.

"Sony has lost 85 billion yen ($831 million) since Hirai became CEO in 2012 "

That's A MASSIVE loss so naturally, investors will be panicking but long term, I'm confident Sony will do well. Their PlayStation division alone is set to make a massive profit judging by the incredible momentum it seems to have.

Volkama766d ago

"with a strong sense of crisis"

^^That is from the CEO of the company.

It is cute that you are more confident, but I don't think the OP is necessarily trolling.

DLConspiracy766d ago (Edited 766d ago )

Trolling? I was genuinely concerned and have been since. I wasn't rude about it. Just because a division is doing well doesn't mean the company as a whole won't have to shift money around from different divisions. In fact their software division could be affected since they are more hardware oriented.

Gamer1982766d ago

TV is killing them as they charge silly prices for there TVs in which they used to dominate but now companys like SAMSUNG and LG are just as good when it comes to TV technology and quality but a lot cheaper..

King_many_layers766d ago

Samsung and LG have yet to reach the quality of Sony's top 2012 models. This is a unanimous statement shared majoratively through tech websites and such.

People simply buy into marketing which Sony cannot compete with.

DigitalHope766d ago

As someone who works in big box retail selling home theater, I can tell you Sony is poised for a comeback in TVs in 2014.

The quality has always been top notch but the value has never been there as Sony TVs always cost way to much. Now they are more competitively priced and since early may when the 2014 line ups came in Sony has been top seller so far. Followec by LG then Samsung.

Things are changing slowly.

Arkardo766d ago

That is a fact, Sony TV'S are way more quality than Samsung and LG, costs are the problem here, but as others said people buy marketing and cheap prices not quality.

rdgneoz3766d ago

"Samsung and LG have yet to reach the quality of Sony's top 2012 models."

Sony's TVs are better quality, but some people would rather spend a little less. Hell, you could use the money you'd save from getting a Sony TV and use it towards a larger LG / Samsung TV.

DigitalHope765d ago

@rdgneoz3

Thats not true anymore. This year Sony TVs are lower cost than comparing models in Samsung. LGs still have a lower cost and better panels than Samsung this year. Really have not liked samsung TVs in 2014. Just their curved TVs.

Baccra17765d ago

I forget the guys name, but there is an american investor that wishes for Sony to break apart and sell certain assets away, like movies. I wonder if this apology is because that guy is trying to rally everyone again and force Sony to sell off pieces of itself again.

Kribwalker765d ago (Edited 765d ago )

The company as a whole is only worth $17 billion dollars now. Down from over $120 billion. This kind of loss is no longer sustainable

"While investors aren’t calling for Hirai’s job yet, they do want the turnaround to show traction after the company cut its earnings three times last year. Sony is now worth about $17 billion, compared with a market valuation of about $120 billion in 1999."

Giul_Xainx765d ago

I lost interest in big screen tvs 2 years ago after I bought a beautiful monitor that has In Panel Switching between my computer's input, and my ps3's HDMI input.

I know most console gamers are couch potatoes, but my desktop setup is much better.

Pogmathoin765d ago

Markets are affected by any kind of negativity news. Hirai is simply trying to allay those fears, but being honest by telling everyone that the waters will be choppy before it calms. Nothing new in any business. Sacrifices were made, and because of other external forces in the world markets, it has taken longer than projected to correct the ship.

fr0sty765d ago

Sony has taken a beating in the TV market, which is why Kaz chose to spin off the TV business. A wise move I say, as TVs are not anywhere near as profitable of a market as they used to be and there are other name brands that have gained dominance in the market. This sort of restructure isn't done overnight, though investors are chomping at the bit to see results right now.

Is it a crisis for Sony? Most definitely. Is it the end of Sony? Only if they keep the businesses that are bleeding red ink. If they drop their losing interests and stick to the ones making money, they'll be fine.

Microsoft, while not in as dire a position, is also involved in a lot of markets that are draining its blood. The Xbox division has only lost billions, and as a division has never once turned a dime of profit. This is why investors, Bill Gates, and the current CEO have all stated they are open to spinning off Xbox. Microsoft also keeps failing in the mobile market.

Both companies have fat to trim as far as investors go, but only one of them is dealing with investors telling them to make their gaming division part of that fat to trim off.

Buff1044765d ago

PS4 is doing great, no doubt, but it's still bad news for shareholders. Business is business. I think some of the PS4 fans on this website don't understand this.

FanboyKilla765d ago

@kribwalker. That cant be true. By your calculations it will be bye bye sony in a matter of years. Or at least sony as we know it.

Sabo765d ago

Sony's restructuring will help them back to profit after these next waves of losses from TV and PC, which they took care of.

As a gamer I am just so happy to see them doing great with the PlayStation!

kenshiro100765d ago

You know how some people are bicfitness. Don't even bother.

iamnsuperman765d ago

I feel Sony need to relook at how they do the TV space. The problem is most people rather have value for money and buy low to mid range TVs since the common man can't really tell except for size. Sony should look into mid range TVs

user3050031765d ago SpamShow
saber00005765d ago

Didn't they already sell their TV division?

Sabo765d ago

^
They did a spin off for the TV business and completely sold the PC biz..

guitarded77765d ago

Yes, SONY TV's are expensive compared to the competition, but SONY's vision has been to lead through innovation in technology. This has a cost.

What should SONY do? Should they create an affordable line of TV's with less features? Maybe. But they have to do something to keep the TV line going. If it wasn't for SONY in the TV making business, we'd see far less innovation. SONY is a leader there.

I have SONY, Samsung, Toshiba and LG TV's in my home. Honestly, the SONYs have the best, most natural picture, but I don't think they are worth more then the Samsung. SONY really needs to get into that middle market.

tokugawa765d ago

lol @ frosty desperately needed to inject some microsoft doom and gloom into the comments as well.

i can imagine you moping your brow and taking some deep breathes as well lol

there are some truly pathetic people on here

http://www.forbes.com/compa...

http://www.forbes.com/compa...

that should cheer you up a bit lol

thorstein765d ago

Yes. I think the TV business needs to take a lesson from the other parts of SONY. I want a SONY TV, but the Samsung is cheaper.

Yes, I want a cheaper SONY TV.

fenome765d ago (Edited 765d ago )

It's defintely their TV market, their prices have been way too high. Just last year their 4K TVs were like $25,000, now they're in the $2,500+ range and they keep emailing me 'deals' for like $1,100 off (on the $3,000+ models anyways).

They've also started releasing cheaper models of LEDs that are more affordable, hell you can get a 40" Sony LED at Walmart right now for $350. Walmart never even used to carry Sony TVs because the price-range was too high, so you can tell that they're working on it.

http://www.walmart.com/sear...

Amputating their computer department should help a lot too, it was just bleeding them out.

+ Show (23) more repliesLast reply 765d ago
king_ps4766d ago ImmatureShowReplies(2)
ThroatPunch765d ago

As much as you troll IGN, I disregard your fake concern.

DLConspiracy765d ago (Edited 765d ago )

You consider anyone who sheds a positive light on the xb1 as trolling though. I like both consoles and I have said it hundreds of times. Doesn't change the fact I still use Sony's software to create music.

truefan1765d ago

Sounds like the CEO is banking on China to help sell ps4's. According to the n4g analyst, consoles won't sell in China. Maybe that was just when it looked like XB1 will the the only console in China for the foreseeable future. China is defintely an interesting dynamic.

LeCreuset765d ago (Edited 765d ago )

I wouldn't bank on China. Fortuantely, FROM THE ARTICLE, it looks like PS4 doesn't need to:

"There are some positives for Hirai as Sony extends its lead in video games and the film unit rebounds.

"The PS4 beat Microsoft Corp. (MSFT)’s Xbox One in U.S. console sales in May, extending its lead for a fifth month, according to Port Washington, New York-based NPD Group Inc. Sony last month took steps toward selling consoles in China, agreeing to form two ventures after the government lifted a 2000 ban on sales of the machines.

“'One senses that Sony is building a solid momentum and a viable ecosystem” around the console, said Amir Anvarzadeh, manager of Japanese equity sales in Singapore at BGC Partners Inc. “Sony is doing many, many things right, not to mention its decision to ignore Mr. Loeb.'”

For all of your implications of N4G pro-Sony bias and hypocrisy it is interesting that when I questioned the mods on why this story about MS http://n4g.com/news/1455378... was failed for the reason "Seriously quit beating a dead horse this belongs on tech spy not n4g," I was told, "The issue is they talk about xbox once but the pieces are over all surface, and other product not about the xbox." Funny, as anyone can click on the failed story and see that its focus was on what recent investor pressure meant for the Xbox division, unlike this story, which has lured you in, which only mentions PS4 briefly.

fr0sty765d ago

Yeah, the console maker that is moving more consoles and selling more games than any other manufacturer on the planet is banking on China to move more consoles.

Your idiocy blows me away sometimes...

kenshiro100765d ago

What the heck are you talking about? The PS4 has been selling very well. What does the sales of the PS4 have to do with the article?

XiSasukeUchiha765d ago

Apologies accepted Sony now come so I can give you guys a hug!

Volkama765d ago

They were not apologising to you...

randomass171765d ago

@Volkama He says a lot of strange things. Let him be. :P

monkey48765d ago

I think he just reads the headlines and Comments. Sony is going to turn it around, if they stop over pricing their TVs and being competitive with Samsung, LG, Panasonic etc they would probably do better. I mean their name as a electronics giant is still big.

UltraNova765d ago

Sasuke

Are you a Sony shareholder?

No? The apology wasn't towards you mate...;-)

OT: Shareholders only care about instant profits which isn't gonna happen this kind of re-structuring and 'revival' takes a lot of patience and time!

+ Show (1) more replyLast reply 765d ago
3-4-5765d ago

Sony.......You obviously have the wrong people in charge of designing and making your High Quality Tv's at a profit.

It can't be that hard to figure out.

Grow a pair, fire that person, and hire somebody from WITHIN who has seen and experienced this failure, and can make a quick adjustment based on EXPERIENCE.

DO NOT bring in another " Money Guy".

All they do is screw things up, take their bonus, and run to the next company to screw them up.

I'm guessing this is how you ended up in this position in the first place.

I hope things work out for them.

Muzikguy765d ago

I don't understand why it's so hard for companies to realize this! +1 my friend

zeuanimals765d ago

Most TVs don't cost as much as Sony's to manufacture and TVs don't sell well in general. When most people do buy TVs, which is about every 5 years, they tend to go for the cheaper ones. That means Sony's sells worse than most others because of the high price and because TVs already don't sell well.

If Sony wants to make a profit from the TV division, they're gonna have to drop the quality and make crappy TVs like everyone else. I'd rather they just drop the division because we don't need anymore crappy TV manufacturers.

xtremeimport765d ago

they need to drop the prices of their tvs.
they're overpriced and its killing them.

incredibleMULK765d ago (Edited 765d ago )

Its too late. With exclusives like ratchet and clank, Jack and Dexter, sly, PS all stars Sony is going down like the titanic. Mouthfart!

This isn't an opinion piece this is news. Best to be like Sega and go third party developer and rake in the bucks from PC Ms, Nintendo android, iOS. Make movies, PS , games and phone and ditch everything else.

Or Sony will die out like kill zone....a popcorn fart.

180 billion to 17 billion??
Ouch.

GW212765d ago

Aww, you're adorable. Look at you, thinking you have any idea what you're talking about.

RATEDAFORADULT765d ago SpamShowReplies(2)
wannabe gamer765d ago (Edited 765d ago )

ppl are trolling the OP here OR they are not reading well and comprehending it. he said "it affects everything they do "NOT just PS4"
pretty easy to see that he is concerned that what other divisions of Sony fail at could affect the company overall. Which is correct, but as usual people on N4G just see what they want and then use that to bash people. stop reading into what people are saying and coming up with something other than the words they actually used.

seriously its like the entire audience of commenters here are average age of 14.

LordDhampire765d ago

Sony just needs to work on marketing their TVs, Most people just by samsung these days.

Many people may not know this but Sony TV's have the lowest input lag around 9-20ms while samsungs have around 50ms creating noticable lag while gaming. Vizios and other offbrands and such are around 30 to 40.

To put this in perspective a gaming monitor for a pc generally has 5ms or lower, 2ms is the gold standard.

showtimefolks765d ago

people want sony to be fixed over night just like people wanted Obama to fix USA's problems overnight. A company worth 120 billion to now 17 billion, Kaz is doing his best but things will take time.

I think after the PC sale goes through and TV re branding we will see sony get on a more positive road ahead

if i had money i would buy sony outright for 20 billion, and just focus on stuff that's gonna do well. Gaming,Music,Movies and smart phones

sAVAge_bEaST765d ago (Edited 765d ago )

so what do you make your music at? 432hz or 440hz? Very Important Question.

(for those that ARE in the KNOW)

DLConspiracy765d ago

No frequencies range is safe from my brain.

+ Show (10) more repliesLast reply 765d ago
randomass171766d ago

Man, that is tough... I'm remaining optimistic though. PS4 practically guarantees a profit for Sony so they will pull through this just fine in the long run.

ats1992766d ago (Edited 766d ago )

Yea the ps4 will bring sony profit but the ps4 cant save them from the situation they are in. It seems they need to look at their other departments and fix them because thats whats dragging them down.

randomass171766d ago

Pardon the simplicity in my comment. I'm aware it will take more than market share success for Sony to get out of their funk, but the recent downsizing is demonstrating how Sony is taking initiative to deal with these issues and recover promptly.

Nekroo91766d ago (Edited 766d ago )

The ps4 is enough to grow the company 5 to 10% starting in 2016.

If im not mistaken theres 46 million xbox live accounts thats arround 3 billion dollars a year.

Sony will reach that number easily within the ps4 lifecycle, the company will grow and nothing can stop it.

in 2015 it will register a small loss or almost even but starting within the 2016 financial report its going to be positive and it will continnue to grow. Not only due to the playstation but a strategy for the company itself.

The only doubt i have is 2015 because if they launch project morpheus that year it will increase the production costs and i have no idea how much they spent in Research and Development to make that product a sucess

LeCreuset765d ago

"It seems they need to look at their other departments and fix them because thats whats dragging them down."

Or just do away with them if they can't be fixed. I'm not a Sony fan. I'm a fan of good products. So if they can focus support on their good products by trimming the fat that is their unsalvageable products I'm all for it.

jackanderson1985766d ago

isn't the PS4 itself selling at a loss? they need software and PS + sales to make it profitable

PS4isKing_82766d ago

Actually Sony just said last week ps4 is already making a profit.
http://www.polygon.com/2014...

hello12766d ago (Edited 766d ago )

Wasting your time telling Sony fans the basics. They think the PS4 selling well means Sony is doing great. Even though the facts on the ground tell a different story.

E3 was prove they aren't doing great.

The order 1886 was shown at e3 last year.

uncharted we knew it was coming too.

The only triple AAA game Sony had not announced officially and was shown aT E3 was bloodborne.

MysticStrummer765d ago (Edited 765d ago )

@KNWS - Most of us have seen enough of your posts to know that to you "the basics" means fanboy BS and FUD.

@Jack - If by "profitable" you mean what each unit costs to build vs it's selling price, PS4 has been profitable all along. If you add in things like advertising and R&D, it's not, but the same goes for XB1.

OT - It's a good thing for Sony that PS4 is doing so well. Shareholders need good signs to hold onto during a time of restructuring, but their patience will only last so long.

Magicite765d ago

you are living in the past or simply not informed enough.

BlackTar187765d ago

Hey KNWS,

What Triple AAA gam edid MS show that we didn't know about or wasn't shown last year or talked about?

PLEASE PLEASE PLEASE SAY HALO REMASTER

+ Show (2) more repliesLast reply 765d ago
NeverStopGaming766d ago

Right that ship. Sony will come through this. Kaz is making the tough decisions that needed to be made years ago.

mrpsychoticstalker765d ago (Edited 765d ago )

Kaz is a failure as CEO of Sony *opinion
He was great just handling the PlayStation division. I understand this sounds harsh for the majority of ps fans. But it's the truth.
Empty promises and apologies will not make Sony shine as it did before. Shareholders will probably give him another year and if he fails again I'm sure they will ask for his resignation.

LOL_WUT765d ago

It's mostly the TV division they overprice most of their electronics when the competitions offer a similar product for less. Heres hoping they can turn it around ;)

ThatOneGuyThere765d ago

Sony makes the only LCD displays I can tolerate. Samsung makes displays that look "good", if you consider "good" a psychedelic mushroom trip. The colors are entirely unnatural.

F4sterTh4nFTL766d ago (Edited 766d ago )

Microsoft should buy Sony and combine Xbox and Playstation and call it Playstation X. That should solve all problems for Microsoft and Sony.

GarrusVakarian766d ago

Terrible idea.

Competition is needed.

Kiwi66766d ago

True about competition maybe you should tell that to the people that post on here about how microsoft should sell its xbox division despite doing ok

BitbyDeath766d ago (Edited 766d ago )

Sony is the biggest entertainment business in the world, MS could not afford to buy the entire company.

MeliMel766d ago

I beg to differ. MS is actually one of the handful of companies that could probably buy Sony outright or atleast own majority stake in company.