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“The Outlook is Negative”: S&P Downgrades Sony’s Financial Rating, Warns of Further Action

With Sony losing money for four straight years in a row – over $2 billion in the last quarter alone – credit rating agency Standard and Poor has downgraded the company, citing “a massive erosion of prices, falling demand, and harsh competition” across Sony’s main businesses. - PSLS

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dbjj120882113d ago ShowReplies(6)
decimalator2113d ago

Thanks a lot Sir Howard...

Christopher2113d ago (Edited 2113d ago )

I don't blame Sir Howard. He went into a company that had compartmentalized itself to such a point where divisions refused to share technology in order to make the company as a whole grow. Through his leadership the company has been a lot more open to sharing technology and growing together in various manners.

What they need to stop doing is relying on high end products and learn to make some mid-level options that are more affordable to the general public and can compete against the pricing and offerings of their competitors.

moparful992113d ago

@cgoodno I think you hit the nail on the head, this economy exposed the biggest weaknesses in sony's market strategy. People have to be alot more thrifty with their money so they will buy a comparable product if its less. They don't seem to mind losing some of the durability and brand experience for a more affordable and slightly less performing product.. Also sony's compartmentalization was a huge weakness.. One reason the playstation side is so succesful is because the strength of all of their publishers and the way they share information and technology.. If sony as a whole begins to operate like the playstation brand and they begin to offer more affordable alternatives to their high end products not only will the ship turn around and they will be profitable again but they will also increase the demand for their higher end products.. Of course this is all my opinion.. I trust sony will get this figured out

superadvanced2113d ago

pretty much. apple is the strange exception here.

reynod2113d ago

Sony as a corporation was valued at 100billion USD back in 2000, Today it stands at just 19 Billion usd.

Hence they have been doing pretty bad. They need to rethink their strategies if this keeps up.

RememberThe3572113d ago

reynod: They are, hence the whole management shake up. I like what I've heard from Kaz and from what we've seen so far he delivers on his word. He seems to have both perspective and ambition, which bodes well for them. I think people will be surprised by Sony's resurgence in the next decade.

RumbleFish2113d ago

Exactly, reynod! Even in their strong divisions their strategies are weak.
Just to name an example: I think it is very clear that half of the gamers prefer the dualshock controller over the XIM. How many dualshocks could have been sold to PC gamers all over the world? Instead they have to rely on a homebrew driver for using the dualshock with their PC.
SONY has some of the best products but fails to sell them properly.

gamingdroid2113d ago

@reynod

I agree! Sony is an aging company that has a culture that is destroying it. I'm not sure what Sony can do, I mean other than lowering prices they are kind of screwed. To top it off Sony have little experience with creating quality products at affordable prices.

Sony is used to creating quality products and way over price them.

Death2113d ago

Sony isn't a "high end" company. They do offer products that can be considered high end, but they also have a pretty big presence at Walmart. If anything, their cheap products have dillited the Sony name. Other than the occasional comment on N4G, not many associate Sony with higher quality anymore.

-Death

moparful992112d ago

@DEATH so the ps3 isn't considered a high end quality product? Ok logic obviously eludes you...

Death2112d ago

No. The PS3 isn't considered a "high end quality product". It's simply a game console.

For something to be considered "high end", there needs to be a base line to compare it with. Seiko and Timex make some really nice watches. I paid close to $500 for mine. It was at the high end of Seiko's line, but doesn't hold a candle to an actual high end watch like a Rolex.

Sony does make what can be considered high end electronics, but you don't see them at Walmart or Costco. If you are buying the $449 Vizeo at Walmart instead of the $479 Sony, it isn't because the Sony is high end, it's simply because you are an idiot. The majority of Sonys sales are coming from their low to midline product range. The struggles they are having is due to increased competition from LG, Samsung, and Pioneer who also make very good products in the same price range.

-Death

+ Show (6) more repliesLast reply 2112d ago
JohnnyMann4202113d ago (Edited 2113d ago )

Delete Me Dupe!

JohnnyMann4202113d ago (Edited 2113d ago )

Sony needs to shed areas that it's losing in the most. Hopefully next gen Sony doesn't hurt itself like it did with the PS3. Selling a product for 200 dollars less than it costs to make it will still pay off since it won the Blu Ray war. But how long with physical media last? I have bought two BluRay discs total.

I am not ripping on Sony, I am just worried. I want to see a PS4 and with me buying a Vita soon, it is kind of scary that Sony may one day be out of business.

Christopher2113d ago

Sony isn't going out of business anytime soon. Sony could sell its TV divisions and survive with a nice profit as it is now. The company will remain, but they may end up selling off one or more part of it if they don't learn to solve their issues.

JohnnyMann4202113d ago

@cgoodno, yeah I don't know how much capital they have, but you are right. I want to look into if as a whole the PS3 has made them money or not. Did they lose that much the first few years that it wont be green for awhile? Also they won the HD wars so money earned there makes the PS3's losses look more like an investment. I have faith, they are a smart company.

DeadlyFire2113d ago

Well I am worried as well with Sony's rumor of disregarding Power7 design it had in the works for PS4. Although if true they might be saying screw it and wait for Power8(2013). Which is what I hope. Holding down the one division of your company that gives you your money is a bad idea.

sikbeta2113d ago ShowReplies(1)
sikbeta2113d ago ShowReplies(1)
trancefreak2112d ago (Edited 2112d ago )

Anyone read all the way to the bottom of the article where it says TELEVISIONS. The TV business has been failing the over a decade that's crazy. I thought they made a great TV with exception of price and preference, I like Samsung TV's better.

I wonder if it is because Sony try too hard to push to much different tech like 3d and other developments which hurt them financially. Sony needs to rethink their game and start by trying to stop being the forerunner on tech and just go with status quo for awhile to recoup their losses. Ever since PS3 has been released they have been losing out. The economy and pricing didn't help either.

I really hope they can hire some new figure heads to turn this company around. You guys already heard about Kodak closing shop today?

otherZinc2112d ago

I told people "sales matter"!

salinidus2109d ago

these guys explain the situation for those of you who want a brief summery

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Mikhail2113d ago

All japanese companies are downgraded. Panasonic, hitachi etc. Even toyota has some negative outlook. Must be time for the korean companies. I expect fanboys to go into here without full understanding of economics and business. This news should be in some other sites and not gaming sites

Pintheshadows2113d ago (Edited 2113d ago )

Agreed, but let the clueless fanboys have their fun. They have empty lives otherwise.

If I remember correctly Honda is about the only Japanese company to escape unscathed. Frankly it's not just Japan. Big companies worldwide are under massive strain and it's going to get alot worse. When countries are bankrupt you know you're in massive trouble.

mcstorm2113d ago

I agree with you here but sony have been in trouble for quite a few years now.

Sonys biggest problem is the price of there devices. Sony were all about being the top brand 10 to 15 years ago. You wanted the best tv or sound system sony was one of the names to pickup but it had a high price tag.

Now sony still make quality products and i still love there tvs and audio equipment but they are not cheap. When you look at some of the samsung tvs they are just as good as the sony tvs now but half the price and this is now sonys biggest problem.

Sony have started to bring out cheeper tvs ect but when you put them up against tvs that are the same price the sony stuff offers less then a tv from samsung ect at the same price.

I do think sony will get back ontop of things again but it will take a few more years ye for them to do this.

Frankfurt2113d ago

Nintendo proves your argument to be BS.

RememberThe3572113d ago

Haha I love it when people call out fanboys thinking they're going to get hated on and the opposite happens. I wonder if you guys get disappointed when it turns out there aren't as many fanboys as you think.

Japanese companies have been having issues and many are not their own fault. The rising Yen and the seemingly endless about of disasters that have hit these companies are a large part of their struggles.

ronin4life2113d ago (Edited 2113d ago )

Was Nintendo vastly downgraded?
Edit I'm asking an actual question. Disagreeing seems kind of pointless.

Soldierone2113d ago

Yes, but then Wii managed to sell well.

MrDead2113d ago (Edited 2113d ago )

Yeah Nintendo’s TV, movie, camera, phone, music.... etc division are making loads of money.

Nintendo are a games company, Sony is a huge media giant and are more likely to suffer in a global financial downturn.

ronin4life2113d ago (Edited 2113d ago )

@soldier
Well, I meant recently...
@mrdead
Being bigger with a wide range of diverse products sounds more like it would make a company wether such troubles better, not worse; you have more sources of income.

[email protected]
I see. That makes sense.

Christopher2113d ago

***Being bigger with a wide range of diverse products sounds more like it would make a company wether such troubles better, not worse; you have more sources of income.***

Not during economic downturns. It means you have to spread less money around more than being able to focus all your money in one area. You have to compete on all fronts whereas another company only worries about one.

Perhaps if Sony had a huge control of the market, kind of like Microsoft and their software business, they would have more to work with. But, Sony has strong competitors in every single one of their arenas, so it costs money to stay competitive with all of them. A lot of money.

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MasterCornholio2113d ago

I know what you mean. I expect that some fanboys will make claims that the Vitas performance in Japan has something to do with this. That is the way N4G is.

XperiaRay

indysurfn2112d ago

You hit it dead on the head. Both statmentss this has always been a 85% Sony fanboy gathering place. Let's see Nintendo's 3ds is selling will actually smashing the ds sales at the same age. But somehow it is the economy fault? Let's see Vita is good quality(i hope) but look at the price 249-299 I should have a console for that amount please! And it does not have two screens or even 3d even though it had time to add it? Most people can get a cell phone with 3d and 3d glasses less screen way better than the vita's graphics (I paid 1 cent for mine on Amazon) and look Sony is charging at LEAST $49 dollars more.

MrDead2113d ago

You are wrong! This is N4G everyone is an expert in business and world finance. Just because there was a global financial crisis and middle to high end companies like Sony suffer greater then focused or low end companies doesn’t give them a reason to be struggling........... Oh, yes it does, less disposable income means reduction in sales and people are more likely to invest in cheaper alternatives.

Pintheshadows2113d ago

Everyone is also quick to forget the tsunami which only added to Japans financial woes.

They were in trouble anyway due to the emergence of competition in Korea and China. They essentially manufacture the same products (cars, tv's) but sell them at a reduced price. The longer this continues the more the Japanese economy will struggle. It used to be assumed that a country with a solid base of manufacture would be stable but this is no longer true as supply now vastly outweighs demand in what should be considered luxury items.

Apex132113d ago

Nintendo has not been downgraded. Sony was great in every area a few years back but their products run of Sharp or Samsung parts and charged at a higher cost, so why by Sony when the companies that supply them have higher spec products for a lower price? Maybe it's all Japanese co that just don't like change.either way it's fucked them up but now they got the greedy westerner out things may change.

Phantasm2113d ago

It's not time for the Korean companies just yet.

Samsung just reported record quarterly profits. - http://blog.gsmarena.com/sa...

LG also reported profits. - http://www.engadget.com/201...

hellzsupernova2113d ago

I have a sales background and to be honest in TVs i would only buy 3 brands LG, Panasonic or Sony. Sony have realised their mistake and here they have lowered their price BELOW the competition and actually have a better product then the competition (apart from panasonic)

I hope Sony does pull through and the Vita is succesful they may be a huge corporation that doesnt care about me but they have given me so much joy in my childhood that i hope for the best.

indysurfn2112d ago

You proved why you always sale to a sales man. Did your reginal manager pump you full of that? The Panasonic is the WORST lasting TV on the surface of the earth! All there tv's have power related problems! It May (may) last you past the warranty, but you will see TONS of complaints of people saying panasonic is not really honoring their warranty, and is ignoring complaints. And Samsung outside of plan lcd is the most reliable brand out there! For awhile I have to admit Panasonic had the best 3d impact. But it would not help with your tv refusing to power on! The only brand of your three I would buy is LG. But they are tied with Samsung not Sony.

dredgewalker2113d ago

@Mikhail

So true, Korea's electronic products are booming because they have so many offerings that cater to different types of customers. Their pricing is very competitive, while being able to manufacture so many new technologies in their country. Samsung has also been recently entered the pc market and I'm certain that they're not gonna have a hard time being successful.

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cervantes992113d ago

The U.S. Government was downgraded too.

Apple is about to take over the world!

Dee_912113d ago (Edited 2113d ago )

i want the poeple who makes pop tarts to take over the world.Surely they can do no worng.... and dont call me shirley

kaveti66162113d ago

Yup. France was as well. And Greece is a vortex of doom for the EU. They made a huge mistake in letting Greece into the EU.

thebudgetgamer2113d ago

Is this Playstation focused or Sony as a whole? If it is shouldn't it be on techspy.

smashcrashbash2113d ago

No one really cares. They just heard the words 'downgrade Sony's financial rating' and started to rejoice. They don't know how much this affects the PlayStation or anything.That is the gamer norm these days.

LX-General-Kaos2113d ago

Im reading through the comments and i dont see many people blaming anything on playstation. All i see is a lot of people constantly repeating this has nothing to do with the playstation. Its almost like a small form of damage control.

Kurt Russell2113d ago (Edited 2113d ago )

this guy has got it^