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Sony’s haemorrhaging money

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Sony’s announced its latest batch of financials – and things are not looking particularly rosy for the global electronics and media giant.

For the fourth year in a row, the company will be posting a staggering loss – this time to the tune of $2.9 billion.

Sony’s suffered from poor sales, spurred on by the floods in Thailand (which ceased hard drive production) and the earthquakes in Japan. With the strong Yen, it also means fewer dollars coming in for its products. For a long time, the video game business  was Sony’s only really profitable arm – but even that’s changed. They’ve  launched a new handheld console in the PlayStation Vita (in Japan, with a western launch this month) which has failed to ignite the sales charts as yet. Releasing new hardware is always an expensive endeavour. Sony’s also been forced, as a result of slow to cut its forecasts for the PlayStation 3.

It’s a tough time for the company, and former PlayStation boss Kaz Hirai, the company’s new president and CEO has a tough time ahead of him.

"It won’t be easy for Sony to regain its lost ground under new leadership, as its overall competitiveness has sharply weakened," said Shinhan Investment Corp analyst Kim Young-Chan, to Reuters. "It’s got structural problems that will take years to fix. "It’s not just Sony but Japanese IT firms have similar problems. They are failing to innovate and produce industry-leading products in almost every major area from TVs to displays, tablets and smartphones."

Do you think Kaz is the right guy to bring Sony out of its rut? Word is he’s planning to integrate many of its divisions, unifying the company instead of having it operate as a collection of sub-companies – and that could be a good thing. What this does all mean is that the likelihood of a PlayStation 4 any time soon is approaching zero – which is good news for wallets, but bad news for gamers.

I really hope Sony can reverse its fortune – because no more PlayStation would be even worse.

Last Updated: February 2, 2012

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