Sony announced a £4 billion annual loss today, filling the PlayStation doom-sayers’ guns with some monumental ammo. Don’t call the firing squad just yet, says Rob Fahey. The round you’re polishing is a dud.
It is a disaster
Compelling argument. You should join the debate team.
This loss was a long time coming. If sony hadn't bought out all those movie studios to go exclusively blu-ray, things would have been alot worse.
@Brosy, what movie studios did Sony buy?
So basically they lost a potential 4billion quid?I didnt know that I thought they lost actual.. money Eh idk
I'd say you should be a comedian but... you did make me laugh a lot. Bubbles for you sir.
Even if it's not PlayStation/gaming related lololol
Read the freaking Article first before commenting ppl! The article clarifies that most of that $4 billion losses came from losing the Tax credits Sony had with the U.S. Govt which are considered losses for accounting purposes!
Awesome_Gamer You have a future within the political branch, the way you misleaded everyones attention over to MS. A seasoned news reporter would problably follow up with a question of: "But what does that have to do with the 4 billion loss?"
From the bbc "Sony's performance has been dragged down by its television business which has lost money for eight years" "Selling around 20 million units a year is too small to be price competitive and too big to be a niche player" This has got nothing to do with gaming,nor their music or films so i don`t know why its on ere,but then again anything anti sony/ps3/vita gets approved.Can see why alot of users have left ere,its less news and more a Sony flamebait site. MS lost billions due RROD with shareholders wanting MS to dump the gaming division to this day and that is gaming related. It happens end of,look at apple and their massive turn around.
Wait, so the parent company of a gaming giant announces record losses, and you don't think it should be covered by a gaming site? How narrow minded are you?
Candy coat it any way you want. This IS a disaster. Sony has a ton of issues. And some of them are in gaming too. This started with the inclusion of Blu-ray in the PS3. No Blu-ray and Sony is still on top of gaming. That leads to more games sold. More consoles sold for a profit. More advertising money. Money to stay in deal with Samsung. Money to continue shrinking the die size of the chips in the PS3 to increase profits. And it wouldn't hurt if they charged something for PSN. Even just enough to offset the cost.
He is talking about the fact that it is not directly related to gaming news, and PlayStation is making a profit, if anything, it will almost definitely keep going, so it is not going to affect the gaming side of things. So his point is valid (this is a techspy story), and kwyjibo, your point is not. @dcbronco - Honestly, it actually isn't that big a deal. This amount of debt already existed for the company, they just have to pay it off straight away rather than deferring it over a period of time like many other companies do, due to the losses they incurred overall. Also as I said earlier, the PlayStation division made a successful turn around and is profitable now, so I have no clue what you are talking about. These losses are the last year's financial losses, not any time before that. And if you think that simply removing Blu-Ray from the PS3 would have been enough to keep Sony in profits, you are living in a dream world. The PS3 cost over $850 to manufacture at launch, and imo it was well worth paying the $599 for just because of that.
"And if you think that simply removing Blu-Ray from the PS3 would have been enough to keep Sony in profits, you are living in a dream world. The PS3 cost over $850 to manufacture at launch, and imo it was well worth paying the $599 for just because of that." It was so expensive because of the inclusion of blu ray. Which certainly made it a fantastic deal for the consumer but very risky for Sony. "This IS a disaster. Sony has a ton of issues. And some of them are in gaming too. This started with the inclusion of Blu-ray in the PS3. No Blu-ray and Sony is still on top of gaming." I think it paid off for Sony in the end as including a blu ray player in all PS3s played a massive part in guaranteeing the success of blu ray.
To those suggesting it won't have any effect on the PlayStation brand, I offer this brief analogy. "Well, the gangrene is only in his legs. Losing those shouldn't impact the rest of his life too much."
"MS lost billions due RROD with shareholders wanting MS to dump the gaming division to this day and that is gaming related. . ." There it is ladies and gents, the whole reason for that rant/cry, microsoft is thriving and making profit(they've even recouped all their rrod losses and have made a profit as a whole on the 360) and this guy just cannot take it.
FinancialGamer said "they've even recouped all their rrod losses and have made a profit as a whole on the 360)" Really? Microsoft broke down their 360 numbers since launch separate from the division as a whole and announced they 360 made back all it lost? Fantastic! Can you link me to that info? I'd love to see it. What part of that was software? What part XBL? What's the warranty costing them now on an annual basis compared to what the 360 brings in? I never thought we'd see the day that Microsoft broke all that down for us. Again - I can't wait to see your link to that info. They've only ever given the division as a whole past releases.
Since Q1 of 2011, MS has posted about a $17 billion gain year on year, with a slight decrease last year from competition w Apple, who posted $20 billion. It was the first time Apple had surpassed MS. The entertainment division had posted a $1.8 billion gain from quarter to quarter. http://betanews.com/2010/10... Of course we're still waiting to hear how they did this year. But because software is so much less volitile than hardware, you shouldn't expect any kind of loss.
Even if it's not PlayStation/gaming related.
@dcbronco S**t coat it any way you want, it isn't a disaster. Ps2 sold 154 million systems, so they have plenty of money to... .....See how easy that was? To simply reverse the argument and talk about old losses/gains? I'm sorry, but what you're suggesting is very hypothetical. Simply having the lesser losses doesn't mean that they would have put it to good/bad use. It doesn't mean that they would/n't be in a similar position.
gaffyh, It is a big deal because the tax credits were based on future revenue. If they think they aren't eligible for them anymore it is because they believe their revenue will be lower. And they can't just pay it off. If they were making money they would be having losses. They have lost money every year for the last four or five. Not sure how things work where you are, but in most countries people owing less than they make can't just pay off their bills. Sony also owes billions on top of those losses. And these losses will lower their credit rating. That will make it harder to get loans and credit lines. And it will make the debt they have cost more. If Sony hadn't added Blu-ray they would have been making a profit from the PS3 a long time ago. They would have sold more consoles. Made more money. All of the complaining about not advertising comes from Sony not having the money to advertise. Selling their Cell plant. Because they needed the money. Not shrinking the dies on the PS3 chips because they didn't have the money. Blu-ray led to all of that. They shouldn't have added it. It cost them too much. Sony's lack of money caused them to miss out on things that would have kept them profitable. Wh15ky, Blu-ray isn't that successful. Look at the announce that Kaz has made this year about changes at Sony. One of the things he mentions is they are expecting to sell fewer Blu-ray disc this year than they did last year. Blu-ray sales are shrinking. At least according to the President of the company. FatGayandbald, You're right. Sharpe is doing bad too. Guess who isn't. Samsung. They are doing great. Guess who used to be their partners. Sony. But Sony couldn't come up with their share of the money for new plants so Samsung went on alone. And now they lead the industry. darkride66, MS has made plenty on the 360. The console has been profitable for years. Live makes plenty of money. You have to realize that the 360 isn't in a gaming division. It has a lot of products in with it. Some that don't generate income. Some that aren't supposed to. For instance, one year MS spent 400 million advertising Office for Mac. They charged it to the Devices division that the 360 is in. Income from sales of Office for Mac went to the Software division. That is an instant 400 million loss for that division. SilentNegotiator, Actually not so simple. Sony has had losses for years now. The money they made on the PS2 is long gone. Dividends, loan payments, R & D. Sony isn't MS or Apple. They don't have a huge warchest. They have debt. MS has 40 billion sitting in a corner. They make 16 to 20 billion a year in profit. Opposite of Sony. Simply put it is like a rich guy and a poor guy going to Vegas. They rich guy can lose a million dollars and laugh it off. A poor guy doesn't have a million to lose. Sony is a corporate poor guy. He has credit card debt and a sh--ty job right not. MS is Bill Gates. Losing a few billion on RRoD doesn't faze them because they 40 more in a drawer. And will make another 16 or twenty in the next year. Look at it like your finances. Your job is the company. Sony works at McDonald's and MS runs a major company. And that may never change. Unless Sony becomes the new Apple.
@above - It wasn't until recently that Apple was suffering majorly and had to actually get financial help from MS. It's only in the past 15 years that they have become a stronger company. But it's clear that you don't understand that business accounts are very different to your household accounts, and whilst this loss is a bad thing for Sony, it is in no way a disaster. A disaster would be if the whole company needs to close down, that's not going to happen, and because PlayStation is profitable, if the company was to close down, PlayStation would likely keep going.
@fatgayandbald.. MS did not want to dump the gaming division, because its making massive profits. I do agree with everything else you said though, the sony gaming division isnt the only division making losses, the entire company is apart from the film business.
gaffyh, I think you and other are too focused on gaming and not on the entire business. And also not applying real world business realities to Sony's current situation. I'm not saying Sony is doomed. But they are on the edge. Just like GM and Chrysler a few years ago. Kaz himself said the company was in serious trouble if things didn't turn around soon. Considering he's the President of the company I will trust him on that. Sony not only has losses, they have debt too. They recently had a drop in their rating. to BBB. It means they are considered troubled company and people are less willing to loan them money. It also means the debt they have could be charged at higher interest rates. They owe billions so that is a lot of interest. A big part of the financial crisis is businesses can't get credit lines to do their daily business. Sony will start to have this problem because people are beginning to doubt that they can pay their bills. Sony does have a lot of physical assets. They will most likely start selling some of them. They have enough to sell to keep the company going. But some of the things they might have to sell are parts of divisions. Not just buildings, tech and whole product lines. They will probably close more gaming studios. Sucker Punch isn't raking in the cash for example. They will be doing fewer in-house exclusives. They need to stick to sure things like Uncharted. No more big budget games like Killzone. Keep everything in the 30 million range. Standards and Poor already said that they will revisit Sony's rating in 6 months to a year and this report means that rating will most likely be going down further. Maybe even to junk bond status and Sony being removed from the stock market. Most likely Sony will shrink considerably. They may even file for bankruptcy protection so that they can reorganize. But they will definitely become a much smaller company. And more focused on a few well done things and a lot less of trying to have a hand in everything. And Apple got back Steve Jobs. He was that company. And Yes MS did save Apple. The problem might be that MS can't resurrect Steve Jobs to work for them. I like Kaz. I hope he can get it together. But they have a lot of knuckle heads that live in a dream world within Sony. They resisted Stringer making the same changes that Kaz has to make now. Maybe the treat of losing it all is what Sony needs to prosper again.
Losing money, not a disaster. This is news to me.
Lossing money is never a disaster unless you don't know how it happened and you can't rebound from it. Sony knows how it happened and it taking steps to recognized their business. Businesses make and loss a lot of money over their life times. You will never reach greatness unless you risk failure, but neither should ever be the end. Sony will keep trying new things until they get it right, but it sounds like it's going to take a while. Good thing the gaming division is doing well now.
With 4 billion, i would live at least 10000 year with this money :)
"isn't the disaster it seems"... ok if you say so, but any time you have to cut 10,000 jobs -it can't be a good thing... -_- .____........___...____ .____||......||.......____|| ||.........___||.......____||
Not to mention those cuts is rumored to be overseas firing and not local. So whoever these "Japanese executives" are they're killing Sony with their stubbornness. By keeping a huge chunk of their manufacturing factories in Japan instead of outsourcing them will just keep Sony in the red. The Yen ain't getting weaker it keeps getting stronger in the current economic landscape. Now I can see why Sir Howard Stringer couldn't do anything when he was at the helm of Sony. Kaz indeed has a huge mountain to climb and highest ones are from within the company.
This has been coming for a long time. I am a big sony fan I like there TV's MP3 Players and Playstation products but sonys biggest problem is the price. Sony was knows for its quality and with that quality there was a price too but with LG and Samsung giving us the Quality with there cheep priced TVs people will not look at Sony. With Apple killing off the Mini Disk and MP3 Walkmans as well as smartphones killing off sonyericsson phones and Sonys below part Smartphones it has left them in a mess that they are finding it hard to get out off. Also the Playstation brand is not as strong as it was over the last 2 gens. They have lost a lot of exclusive support to Microsoft and around 70 to 80% of Multi platform games sell more on the 360 than the PS3. Then we have the low sales of the PSV too as well as the cost to make the PSV and the PS3. I think Sony need to take a step back with there products and offer some Mid range TV's and MP3 players Laptops ect as well and lowering the cost of there consiles and maybe not put as much power in them as they have done with the PSV and PS3. Yes they have given us some amazing looking games like UC KZ but this is not what the PS brand was about at the beginning (don t under estimate the power of playstation) was the logo of the PSX and I think sony should go back to this with the PS brand. Im not saying make a under powered console at all but maybe look at the insides a different way to help get the price down and also close some of the studios that are not making money and lean on 3rd party abit more. Some people will read this the wrong way but at the end of the day Sony are a business and every business is set up for one thing and that is to make money and im not saying what I say is right but from looking on the outside in Sony need to re think how the company is run if they are going to start getting back to the height of 2000.
£4 billion ain't shit to Sony. Ain't shit to ChadWarden either.
ChadWarden ain't $#&! either.
losing that much money is a disaster for any company. you can put a dumb in a box and not call it a dump, but when you open the box, peer inside, its still a stinky dump.
...but it would be a travesty for them to exit the game industry. I would much rather see them merge with MS to create a console powerhouse. Having Sony concentrate on the hardware while MS concentrate on the software and online aspect would be something special. With the economy the way it is, I dont see that being too far off from reality in the next 10 years especially with exclusivity starting to fade. I love both of my consoles since they both have pros and cons, but all in all I would love to see them create a console that rivals the PC. I actually think they can do it considering where we are technically in this day and age.
This is a nice article, based on what he wrote I fully understand what is meant by the 4 billion dollar loss.
I have no idea about these type of issues so i'll wait for more well informed people to explain deeper
Well, competition from Samsung and Apple against all their product hit them hard. Apple for premium and Samsung as the price leader. Their strengths lies only to their cameras which is competing with Nikon and Canon fairly well, their gaming division, their entertainment division (music mostly) and lastly life insurance and banking. Add some economic woes of Japan, the earthquake and then Thailand flood. Boom, all japanese companies are suffering. These would lead to restructuring much like what Apple did when they were in deep red on the 90's. And we know what happen next. They have tech and capabilities to do it much like how Apple has the tech and software to do it before. BUT, they can fail as hard too. Its 50/50 going here for Sony.
How is Apple a major Sony competitor outside of mp3 players? They don't compete for TVs, or audio equipment, or video games. They *maybe* compete for laptops, I guess, but Sony's main competition on that front is other Windows laptop manufacturers.
frosty, Apple competes with Sony in the phone and tablet.
don't forget the strong Japanese Yen contributing to Sony's struggles.
@torchic The strong yen is a major factor that is causing massive loses amongst all the Japanese CE companies.
People used to pay a premium price for Sonys brand, now they know Samsung/Panasonic etc are just as good.
Well, because now it's pretty much true. Sony TVs are still slightly better, just not so much so that it justifies the price. But in the past, Sony stuff WAS totally better.
Not even close to better , not for years . It took Sony three iterations to begin fixing crosstalk issues on their 3d sets , that are absent on their rivals' equivalents . Ironically most Sony hdtvs for the past 5 years werent even that good for gaming , with the amount of input lag included in most bravias and too many lame post processing effects , even actually from some of its top of the line models . 3d was also , yet again ironically , badly implemented , despite the price . The issue with Sony tvs , is that they havent been in any way better than their Samsung (and some lg even) lcd equivalents , for prices that range from double to triple the amounts of said samsung tvs . Meanwhile , Samsung's tv wich were full of flaws ; were still great for their price range , and kept improving and improving ... now even improved enough to challenge Panasonic/ Pioneer's defunct kuro line , quality wise . Hardcore tv tech afficionados get other brands than Sony's or even PC top of the line monitors , because they have specific needs and stuff appealing to them . While the general public , not only couldnt afford those sony set , but now are realising they arent that good , while cheap brands are getter a whole lot better . Hell look at Vizio even releasing quality sets . People can be as big a fan of Sony if they want , it's not even about the game division , but they need to realise such reality check was much needed before it led them to death . PS : some can disagree all they want . Saying there might be better sets , quality wise , at better price range , isnt an insult to their own sony set . I you're satisfied , great for you . It is just however something you can check in enough tech oriented places or on your own for each individual models . The bravia brand alone encompass a multitude of screens ranging from mediocre to truly great
Sony offer the same as everyone else - Android, Windows 7, standard TVs, headphones - re-badged with SONY with a jacked up price. They offer no extra quality over Samsung/Toshiba/Panasonic/Senn heiser etc. Why is the higher price justified??
Where do you guys shop that makes you think Sony TVs are so expensive? If you compare similar TVs from the big guys (Sony, Samsung, Sharp etc.) the prices are always within a few % of each other. There is a bit more variation at the very high end but if you're willing to pay $4000+ for a TV then you probably aren't the type to worry about a couple hundred $.
Except there is a huge price disparity . The 1700-1900 sony tv sets of late werent even as good as some 800-1300 dollars Panasonic or Samsung . And it's ludicrous to release a 3000-4000 dollars tv with big flaws missing from your competition . Something Sony did multiple times already An example ? Take the Sony HX929 / HX920 , one of their top of the line 3d tv LED set of 2011 . For ta much bigger price than the Panasonic Viera VT30 , you had a screen with crushed blacks , especially in games , Movie presets not on par with the THX mode of the Viera , Some heavy reflection from the glossy plastic of its bezel , color banding issues that shouldnt be there . Sony HX929 even has some problems distinguishing all of the dark color shades . Sd quality picture is just ok , a far cry from the viera line . Lots of noticeable halos from the local dimming system while watching different HD sequences . Input lag was measured to 30 ms without MotionFlow. That is too high for serious FPS console gaming or foghting games . And even if not caring about that aspect , you certainly wouldnt expect such an expensive and hyped tv to be flawed that way . And while sony fixed and improved major issues over that precise area , TVs like the Veria line and the Sharp LE931 have better 3D picture quality based on lower crosstalk and better 3D depth. It's still a good tv , but not worth its price and direct rivals . Examples like that have been numerous and even far worse , for most bravia models circa 2009-2011
Thursday we well see a turn round plan Kazuo Hirai is hard at work
I sure hope not
Use punctuation. It helps get a point across.
Try telling that to the people who think the sky is falling because of the announcement. I said Hirai may be the right man for the job and I get disagrees instead of an argument as to why I'm WRONG. I love N4G./s EDIT: I'm not painting PS3 fanboys as saints but this is bad for any company. I would have sai the same thing if it was MS going through this situation.
I read on GameTrailers it was 6.4 billion? Anyhow Sony cut 10,000 jobs and Im guessing Zipper interactive was part of the cut list, As I said before its very unfortunate for PS owners to see a game company get cut like that.
Sony denied the cut. And Sony will expand its market. They will not make the same mistake with the PS4 that they did with the PS3 launch (losing for each console sold for YEARS). The blu-ray market is also expanding, the 3D and virutal reality features will be used in a near future...Sony's department of TV's, cameras, TV shows/channel and music/cd's is going strong. They just need to drop the mobile phones and mp3 market that is being monopolized by Apple. They are losing a lot, that's true, but they are not in a free fall, they got strong departments and a solid market structure that will prevent them from falling that easy. You don't need to be an expert to understand that a billion dollar company with such a variety of markets and departments won't collapse like this because of a rought year (or a couple of them). If Sony actually makes the right decisions and improves, they'll recover soon, but if they keep on making the mistakes that made them lose this much, not today, but in 5 years they might be in a much bigger trouble.
Hirai will most likely be the one to make sure they don't make those mistakes. Time will tell.
"Anyhow Sony cut 10,000 jobs" 10,000 jobs will steadily be cut throughout the year in a cautious shaving as part of the new "One Sony" strategy.
A loss of revenue,while not necessarily disastrous,is unfortunate and definitely a concern. The only option is cuts and expenditure reduction.Sony will be fine going forward with an emphasis on cost effectiveness.
A loss and profit is a everyday cycle in a company. Nothing new here.
not for companies to remain. loss of profit for a quarter here and a quarter there is fine, this is the 4th straight year sony has posted losses. not fine. now is it the disaster people think? prob not yet. they have the money needed to bounce back but this def hurts.
Oh yeah its all fine man.This is just normal "Japan's Sony Corp flagged a RECORD $6.4 BILLION ANNUAL LOSS, double an earlier forecast and a FOURTH STRAIGHT YEAR OF RED INK, as it writes off deferred tax credits, heaping more pressure on its new CEO to turn around the electronics giant. Sony, which PLANS TO AXE 10,000 JOBS - around 6% of its global workforce - according to media reports this week, has been HAMMERED BY WEAK DEMAND FOR ITS TELEVISIONS and overtaken by more innovative gadget rivals such as Apple Inc and Samsung Electronics." http://www.hindustantimes.c...
It's funny as H#LL reading some of the comments on this site and definitely SAD, that there are those who rejoice to the fact that any once profitable company is suffering serious setbacks and loses! When in truth most of us have lived with these very same companies in the span of most of our lives! And have no idea how the lost of just one of these companies can impact the other companies and how that can ultimately impact us! Seriously people need to grow up! I for one for one couldn't even imagine things without Nintendo, Microsoft or, Sony. Because truth be they have all made contributions to the life as we know it.
Sony could go bankrupt tomorrow and its smarter competitors would simply take over its business.
Sony or Playstation?
Sony this has nothing to do with the PS brand lol.
This information is about Sony as a whole company! Sony is the parent company of any of their respective branding divisions... Does that mean the Playstation brand is their problem issue, no! But this is no different than when the auto-industry was in its dier-straits and even though it wasn't every brand under say GM that was failing for the company. But the parent company had to file for bankruptcy to rid itself of its dead weight as well to keep those valuable assets in their fold
Its still a loss. Kaz will turn this around tho. He seems like a pretty realistic guy and I hope he tells those stubborn sony japanese executives to shove it.
sonys got to take a risk with their next gen platform something powerful that no ones expecting its the only choice
yes because hardcore market is as big as casual. We are talking money here. If they wanted as much as they could get they would go casual. They probs wont but i doubt there best choice is extreme power and high costs.
They already tried that with the ps3 and that is probably part of the reason they aren't doing that well nowdays