Sony may be the lead dog in the console wars for the moment, but it’s still struggling financially. Earlier this year, the company had to revise its economic forecast and account for additional losses. In a speech at Sony’s Corporate Strategy Meeting, President and CEO Kazuo Hirai spoke about the company’s past and future.
Hirai was very direct in addressing his mission to return the electronics divisions of the company to profitability. He didn’t pull punches when admitting he has not been able to do this:
“When I was appointed president, I made revitalizing the electronics business my highest priority, and we have since executed many initiatives. Yet, while the Entertainment and Financial Services businesses posted results that met or exceeded our projections last year, I am extremely disappointed that we have not been able to complete our electronics turnaround. In particular the fact that we have recorded a net loss for two successive years is something I take very seriously, and being unable to meet the expectations our stakeholders is something I deeply regret.”
It boils down to Sony needing to change a lot of long-term strategy and adapt to its marketplace. Sony is still in process of selling its PC division to Japan Industrial Partners and spinning off its television division into Sony Visual Products. Expectations are that these and other restructuring moves will still result in a 30 billion Yen(300 million US dollars) loss for the 2014 fiscal year.
One thing that is helping to keep these losses down is the power of PlayStation. Even selling units at a loss is helping the company. This is mostly due to the adoption rate of PlayStation Plus with approximately half of all PS4 owners as subscribers. The number of PS Plus subscribers total about 52 million worldwide. PlayStation will continue to help the company’s financials by being a portal to other services such as Video Unlimited, Music Unlimited, PlayStation Now, as well as the PlayStation Store.
Competition is a bigger key to survival than consoles for Sony. Even if it has the better console(which is still a debatable point) it won’t matter if they fail to deliver content. Even worse would be for Sony to crumble as a whole and not have the resources to support one of its most profitable units. Microsoft has made big changes to their console efforts recently in an effort to take the top spot back from Sony. Clearly in the bullseye, Sony needs to heal its wounds and become stronger.
Paul Novak is a self described Polish ninja toiling away as an IT professional but more into gaming and writing. Physically existing in the west side of the Commonwealth of Pennsylvania yet existentially flowing with the ether of the Internet. Found here at What’s Your Tag? and on the Twitter @dudewantshisrug. Game on with Team XBRO!