Sony Struggling Despite Success in Gaming Industry

Sony in Gaming Industry

Sony, the Japanese multinational conglomerate corporation reported Friday that their revenue was down to 10.8 percent with a reported profit decrease of 74.3 percent year-on-year. An unexpected increase in gaming revenue has helped counter the shrinking business in smartphones with the impact of the Kumamoto region earthquakes impacting the production of the camera sensors that Sony supplies to various smartphone vendors such as Apple. The increase of revenue for its game and network services grew to 14.5 percent largely in part due to the significant increase in the PS4 software sales through the PlayStation Network.  PS4 games consoles sales rose from 3 million to 3.5 million compared to the same quarter in the previous year.

With the games and network services unit becoming the largest segment of Sony’s business revenue the company has understandably devoted more resources to further invent in it by launching Sony’s new PlayStation VR virtual reality system which is scheduled for launch in October of this year. In contrast, the company has begun pulling out of all of its non-core businesses with the most recent plug being pulled, the sale of almost its entire battery business to Murata.

Sony has also reduced sales of all their mid-range smartphones as well as pulled the reins on sales in what is deemed unprofitable geographical areas while focus more on the high-value-added models. As a direct result of the actions taken and the changing market, Sony’s smartphone business has dropped from 7.2 million to 3.1 million compared to the same quarter in the previous year. This is an astronomical reduction of nearly 33.7 percent year-on-year. Furthermore, the semiconductor side has also a considerable hit due to the image sensor production experiencing a mammoth impact from the Kumamoto earthquakes.

Sony is now revising its forecast for its fiscal year with revenue expected to drop by 8.7 percent. Sony also has forecasted lower revenue from smartphone sales for the year with only 19 million sold as oppose to 24.9 million the previous year versus the 20 million PS4 consoles sold this year compared to 17.7 million consoles sold last year.

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