14 DAY TRIAL // Sony, the owner and maker of all things PlayStation-related, is apparently not doing very well as far as the other facets of its business are concerned, having just announced that the amount of money it expects to lose this financial year quadrupled from initial estimates.
The company blamed the situation on the state of its smartphone business, which apparently was in an even worse shape than Sony initially thought. The Japanese corporation said that "the impairment of goodwill in the mobile communications segment" led to its revised forecast, quadrupling the financial loss for this year.
What is going on with those crazy mobiles?
The impairment amounts to 180 billion yen ($1.7 or €1.3 billion), and comes after Sony took another look at its Xperia branch, and it affects the company's bottom line profoundly, as it now expects an operating loss instead of the significant profit it forecast in July.
The smartphone market saw Sony dropping from being one of the primary market share holders to barely breaking even, cutting down expected sales considerably. The company sold 39 million phones during the last fiscal year, and it now cut its forecast to 43 million units, from the initial estimate of 50 million.
The Japanese electronics maker's TV business also has a troubled history, struggling to become profitable for around 10 years and finally showing signs that it might return a profit over the course of the current fiscal year.
One of the reasons the company might be struggling is the reduced availability of its Xperia phones in many areas such as the United States, and another factor is their price, as the smartphone business is becoming increasingly competitive in the low to mid-end sector.
The PlayStation brand is going strong though
The PlayStation 4's success is a boon to Sony's electronics business, raking in hardware and software sales, as well as licensing fees. The company has also revealed that around half of the PS4 owners are also subscribers to its PlayStation Plus service.
The corporation's latest home console sold over 10 million units across the world, in the 58 countries it's currently available in, and isn't showing any signs of fatigue for the foreseeable future.
However, the company that was once famous for its innovative products has been lagging in that department over the last few years, and it needs to step up its game in order to become the titan it once was.
Sony is not in any real danger anytime soon though, but if these types of downward revisions and profit losses continue, the company might find itself outmatched.
For the time being, Kaz Hirai, the company's boss, is focusing on the premium lineup of Xperia smartphones, planning to reduce the number of mid-range models it offers, and Sony will most likely make a push for Remote Play compatibility, just like it does with the PlayStation Vita, in order to entice PS4 owners to show brand loyalty with their choice of smartphone.