Sony Q3 2013 Financials: PC Division Will Be Sold, PS4 Pushes Income Up

[Karloff]

Sony Q3 2013 Financials: PC Division Will Be Sold, PS4 Pushes Income Up

The TV segment has yet to see a profit, but restructuring will help ease the pain. However that comes at a price for Sony's workers.

It's no longer a rumor [http://www.escapistmagazine.com/news/view/132014-Report-Sony-Looks-to-Sell-PC-Division-to-Japanese-Investment-Firm]: Sony will sell its PC business, passing on the VAIO brand. It intends to concentrate on smartphones and tablets, and can't afford to keep its PC business going. Sony expects to reach agreement with the buyer, Japan Industrial Partners, by the end of March 2014. Sony promises aftercare services for existing customers, but expects to pass on some of its PC division employees - about 250 to 300 people - to VAIO's new owner.

Sony's Game Division is doing very well, after the successful launch of the PS4, and helped to push operating income up to ¥90.3 billion ($860 million), an increase of 94.6% year-on-year. The Game Division increased sales by 64.6% year-on-year, for a total ¥441.8 billion ($4.207 billion). Sony admits PS3 sales took a tumble, but isn't too worried about that given the circumstances.

Sony's TV segment isn't losing nearly as much money as it used to, thanks to significant cost cutting measures. The TV division is still in the hole, and isn't expected to reach profitability in this financial year, despite Sony's previous high hopes. Even so, Sony's happy with its TV division; it's the number one brand in Japan, and claims to have the dominant market share in the US for 4K resolution TVs. It hopes, through further cost-cutting, restructure of the division, and innovation, to return its TV division to profitability in FY2014.

But all this comes at a price. What with two of its most significant divisions either being sold off or restructured, there isn't need for as many staff. Headcount will be reduced by about 5,000, most of whom are overseas workers. Approximately 1,500 of those about to be fired will be Japanese workers.

What of Sony's Pictures Division? Things are looking slightly better, since RoboCop [http://www.escapistmagazine.com/videos/view/the-big-picture/8620-MovieBobs-Best-of-2013], don't forget - which could indicate stormy weather ahead for Sony's Pictures Division.

Source: Sony [http://www.sony.net/SonyInfo/IR/financial/fr/index.html]


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[Roxas1359]

Honestly Sony, just drop the television sector already. While the PC sector was draining, the TV sector is doing the same. I mean it's good that they are selling their PC division, since Sony's PCs tend to be overpriced, but Samsung is just destroying Sony in the TV sector.

 

[Erttheking]

Well, I'm glad to hear that the PS4 is serving the company well. I remember hearing that if it didn't they might have had to shut down their gaming division, glad that isn't going to be happening.

 

[Roxas1359]

Honestly Sony, just drop the television sector already. While the PC sector was draining, the TV sector is doing the same. I mean it's good that they are selling their PC division, since Sony's PCs tend to be overpriced, but Samsung is just destroying Sony in the TV sector.

They are Sony is spinning the TV division off into an independent subsidiary to make it easier to either sell off or become independent entirely if the restructuring doesn't work.

http://www.reuters.com/article/2014/02/06/us-sony-results-idUSBREA150AK20140206

Well after reading that I think Hirai has the right idea about it. I mean hell, they've lost 7.8 billion in that sector over the last decade according to that article. I mean Sony TVs are too expensive, and cost too much to repair when or if they break. Meanwhile, their attempts at Smart TVs have been crushed repeatedly by Samsung and it's just putting them further in the whole.

 

[Lightknight]

Honestly Sony, just drop the television sector already. While the PC sector was draining, the TV sector is doing the same. I mean it's good that they are selling their PC division, since Sony's PCs tend to be overpriced, but Samsung is just destroying Sony in the TV sector.

Samsung and several other budget TVs that do the same thing for hundreds cheaper. If they can maintain anything like their current quality and then join the rest of the market on price then I'm sure they'd do well. I would rather have a Sony TV than both brands I currently have in my house. Those brands work but I do prefer Sony electronics as a reliable brand. I'm just not going to throw $400 or more for the name.

Also, Samsung is already waiting for Sony in the handheld and phone sector that they're planning on focusing on and that's already a hard market. Harder than the TV market even.

I think Sony is capable of competing in the TV market. It's nice to hear that the PS4 is already boosting sales. That's a huge turn around from the PS3 launch. But if they're going to compete in the TV market then they're going to have to compete on price point if they can't come out with something that really distinguishes the quality. Personally, I've had my Panasonic and Dynex TVs for four years now and they're already 1080p with high refresh rates (less so for the Dynex). At this point I'd consider their purchase to have been well worth it.

 

[Remus]

Sony's TV division might do well if their TVs weren't so expensive! For a 55" LED 1080p smart TV, I spent $600 on a Vizio. A similar Sony TV was double that, over $1200. People can't afford brand loyalty when the price difference is this much. So, TV division, here's hoping that the new owners are more sensible.

 

[Hairless Mammoth]

[Sony] claims to have the dominant market share in the US for 4K resolution TVs.

That right there might explain one reason why their TV division is in the hole. Along with what others above had said about Sony's high priced TVs, the whole industry is trying to force the latest gimmick on consumers to get them to continue buying new things even in the recession. Blu Ray hasn't replaced DVDs as the go to physical medium, yet, and digital distribution is threatening it's dominance. 3D TV failed so hard it makes this former cinema projectionist laugh with evil glee. 4K isn't ready to come out; the internet infrastructure can't handle streaming it, and bluray players will need major updates to play a 4K disc. 4K will remain a useless selling point gimmick for years until blurays or channels start broadcasting in 4K. Only PCs with bitchin' video cards with be able to use 4K properly for a long time. The whole industry's trends are hurting the sales of the self proclaimed market leader.

It's sad to see people get the note to pack up and take the help wanted ads on the way out. But Sony should of toned down their PC prices years ago. Most of the PC makers made decent quality machines that lasted just as long as a Vaio with the same specs for less. Apple has the excuse of having an exclusive OS that according to their ads is better. Sony tried to be the luxury company in a really competitive and fast moving market and lasted until the tablet/recession/don't-need-to-upgrade-for-a-long-time crunch hit the whole PC sector.

 

[PoolCleaningRobot]

I guess when you have companies like Asus able to make sleek laptops with decent specs for around $400, Sony's Vaio line couldn't cut it anymore. Kind of a shame

Samsung and several other budget TVs that do the same thing for hundreds cheaper. If they can maintain anything like their current quality and then join the rest of the market on price then I'm sure they'd do well. I would rather have a Sony TV than both brands I currently have in my house. Those brands work but I do prefer Sony electronics as a reliable brand. I'm just not going to throw $400 or more for the name.

Also, Samsung is already waiting for Sony in the handheld and phone sector that they're planning on focusing on and that's already a hard market. Harder than the TV market even.

I think Sony is capable of competing in the TV market. It's nice to hear that the PS4 is already boosting sales. That's a huge turn around from the PS3 launch. But if they're going to compete in the TV market then they're going to have to compete on price point if they can't come out with something that really distinguishes the quality. Personally, I've had my Panasonic and Dynex TVs for four years now and they're already 1080p with high refresh rates (less so for the Dynex). At this point I'd consider their purchase to have been well worth it.

I totally agree. Sony makes good products, my parents had a Sony tv that lasted 25 years, but they're becoming so expensive when compared to everything else. We recently bought a 1080p 40" Visio smart TV that was about $100 cheaper than a not-smart Sony Bravia of the same size. Granted I could tell the Bravia had a more accurate color balance, but that didn't matter to my mom who liked the more saturated color of the Visio. At least they're making themselves stand out in the Android market with their water-proof devices and high mega pixel cameras and have good support for developers, but they're still in Samsung's shadow. Right now I'm looking for a decent tablet for my parents and I like the Xperia Z but the $500 asking price when it first came out was way too much for its specs and its current price of $430 is still pushing it.

[Sony] claims to have the dominant market share in the US for 4K resolution TVs.

That right there might explain one reason why their TV division is in the hole.
*snip*

Let's not forget that 4k isn't even necessary unless you plan on buying a 120 inch tv. These companies are just assuming they can hype up the average consumer with 4k buzz words but anyone who takes a minute to do some research before they blow $2000 is going to see that 4k isn't needed. And anyone in who sees a 4k and a 1080p tv side by side in the store won't notice a difference except for the price tag

Apple has the excuse of having an exclusive OS that according to their ads is better. Sony tried to be the luxury company in a really competitive and fast moving market and lasted until the tablet/recession/don't-need-to-upgrade-for-a-long-time crunch hit the whole PC sector.

One of Sony's CEO's said in an interview that Steve Jobs wanted Sony to make Vaios that ran Apple OS in 2001 but Sony turned them down because they wanted to focus on one OS. Given that Apple's become more popular over the years, things would probably be different for Sony if they agreed

 

[Deathfish15]

I didn't see anything in the article about Sony Online Entertainment (SOE). Sure it mentioned "gaming division" with key notes to the consoles of PS3 and PS4, but none about the PC software investment. I'm talking in particular about the future of EverQuest Next, Landmark, and the unnamed "next game for SWG vets". I'd like to know how Sony's financial situation effects the development and future existence of those games in the long run.

 

[Hairless Mammoth]

Let's not forget that 4k isn't even necessary unless you plan on buying a 120 inch tv. These companies are just assuming they can hype up the average consumer with 4k buzz words but anyone who takes a minute to do some research before they blow $2000 is going to see that 4k isn't needed. And anyone in who sees a 4k and a 1080p tv side by side in the store won't notice a difference except for the price tag

Yeah, I completely forgot about that. Plenty of idiots see that 4K bullet point on the tag as a reason worth spending more money with no questions asked, though. Too bad for Sony, those idiots are starting disappear.

One of Sony's CEO's said in an interview that Steve Jobs wanted Sony to make Vaios that ran Apple OS in 2001 but Sony turned them down because they wanted to focus on one OS. Given that Apple's become more popular over the years, things would probably be different for Sony if they agreed

Ooh, that might be leaving a bitter taste in some Sony employees' mouths. I couldn't even imagine what would have happened with the Mac Vaios when Jobs' 2003 promise of a 3.0 GHz G5 cpu never came true. They might have had a major OS X market share between 2004-2006.