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Sony downgrades forecasts as it dumps PC business
Sony downgrades forecasts as it dumps PC business
May 1, 2014 | By Mike Rose

May 1, 2014 | By Mike Rose
Comments
    8 comments
More: Console/PC, Business/Marketing



While the PlayStation 4 is exceeding sales expectations for Sony, the company's large-scale restructuring to its PC business isn't working out so well, as Sony downgraded its full-year fiscal forecast today.

In February, Sony said it would sell off its PC business and lay off around 5000 employees, and suggested that, as a result, its full-year losses would total 110 billion yen ($1.1 billion). This was down from the 30 billion yen ($295.6 million) the company had previously forecast.

Now Sony says that the situation is worse than previous thought, with additional expenses of 30 billion yen ($295.6 million) related to exiting the PC business. As such, the company now forecasts losses of 130 billion yen ($1.3 billion).

PC sales in February underperformed, said the company. "Sony has determined that it does not expect to generate sufficient cash flow in the future to recover the carrying amount of long-lived assets, resulting in an expected impairment charge," added the company.


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Comments


Aiden Eades
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Honestly even at the large cost, it's the right choice. It's better to lose that what, 1.5 billion? Now, than to hold on to everything and bleed out more over the next few years.

Amputation vs Infection.

I think sonys problem was it got too big personally, I'm no business analyst, but they expanded in to all sorts of different markets, TV, music, game, video, film, camera, phone and it kinda seems like they tried to bring the same strategy into each market, and that just doesn't work.

It used to be (or felt like) sony was a premium for the quality the brand name gave you, but in some areas that just isn't worth it. Laptops come to mind. I always saw sony laptops and thought "wow that looks nice" then I'd see the price tag and think "I could buy a mac for that... or a better laptop... better laptop it is!"

Rob Wright
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Yeah, Sony's biggest problem for its Vaio PC business was that it charged Apple-like prices for Windows PCs, and that just doesn't fly in today's world. Even with Sony's (former) reputation for quality, they couldn't find a place in the consumer or commercial PC markets charging premium prices.

Ian Uniacke
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That's not the biggest problem for Sony at the moment. The biggest problem for Sony is a ballooning debt. 1.5 billion loss is on top of several years of billion dollar plus losses. I think they're somewhere at about 12 to 15 billion dollars in the hole at the moment? The more divisions they lose the less revenue they will make and that will make paying interest on this debt harder and harder and they will continually find it harder to make a profit.

Ian Uniacke
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Oh and I pretty much agree with most of what you guys are saying by the way.

Jennis Kartens
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Oh they want to sell their PC branch?

So basically SOE in its entirety? What else do they have? What about multi-plattform tiltes like PlanetSide 2?

Rob Wright
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Sony already sold its Vaio PC biz to Japan Industrial Partners (or at least, they signed an agreement to sell it -- the acquisition won't be completely for several months).

Christian Nutt
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PC hardware, not PC software. SOE is under SCEA.

Harvard Bonin
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SOE is not a part of the PC hardware branch. They are separate.


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