Sony slashes losses in the last quarter

The Japanese media and electronics giant has been hemorrhaging cash for four years but it looks like Sony's latest strategic switcheroo has finally narrowed losses.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013

Sony has had a tough few years. Spread very thinly across manifold sectors, from TVs to music to mobile, it was battered by the 2011 tsunami, behind the curve on smartphones and interconnected media, hampered by stubbornly high production costs, and nobbled by a painfully high yen, even as the Koreans (Samsung et al) churned out their gadgets with higher and higher margins.

However, it looks like Sony’s fortunes may be about to change. Net losses for the three months to December fell to 10.8bn yen ($115m; £73m), from 159bn yen for the quarter in 2011, with sales up 6% to 1.9bn yen.

Sony Pictures has proved the star turn of the financial year, racking up a decent profit off the back of Skyfall, and generating substantial revenues from the home entertainment market with The Amazing Spider-Man and Men in Black 3. The music division also made a profit of 16.4bn yen, mostly due to the enduring appeal of fresh-faced boyband One Direction and Alicia Keys’ Girl on Fire.
 
This takes total losses at the Playstation and Bravia-maker to 50.9bn yen for the nine months to December end, a 75% fall on the previous nine months.

According to Kazuo Hirai, who took over as president nine months ago, Sony should return to profit by the end of the financial year in March. How? With the release of a series of ‘wow’ products, he says.

It’s about time that Sony innovated its way back into vogue. The Xbox has almost KO-ed Playstation device and game sales. No one’s carried a Sony Ericsson phone for years, and even its much-vaunted TVs are far too expensive to produce to turn a decent profit. Sony needs to come up with a product like the Walkman - the star gadget of the eighties – for the modern age in order to get rid of all that red ink for good.

And that’s exactly what the firm plans to do. New mobile devices, cameras and interconnected gadgetry are in the pipeline, according to Hirai. And word on the blogosphere is that a new-generation Playstation 4 console is imminent. ‘Sony is reinventing itself to deliver new and exciting experiences,’ promises the website.

The markets seems convinced:  Sony's share price rose 2.5% off the back of the financial report. But it’s hard to imagine what could come out of Sony’s R&D department that could truly rival Apple’s roster of products, or halt the ascent of ‘Sony-killer’ Samsung…

Find out more about the fall of the Sony empire here.

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