If you happen to own any Sony stock, we’d recommend you sit down and pour yourself a strong drink before reading what we’re about to type. If the company’s latest financial reports are to be believed, the giant megacorporation isn’t doing so well. That said, there’s also a silver lining to the dark cloud we’re about to drop on you, so feel free to cling to that if it keeps you from leaping off the roof of your office building.
According to Sony’s Consolidated Financial Report [.pdf] for the first quarter of 2012, the company posted a $312 million loss. The culprit? A shaky global economy, “unfavorable foreign exchange rates,” and a PlayStation division that saw a 14.5 percent decrease in sales over the same period last year. “The operating environment surrounding Sony in the first quarter continued to be difficult with the economy slowing in many areas of the world and the trend toward appreciation of the yen taking hold,” the company claims, before noting that despite these losses it’s still doing far better than it was only a year ago. As IGN points out, Sony posted a $3.2 billion loss as recently as the third quarter of 2011, so comparatively this $312 million hit is a drop in the bucket.
It should also be pointed out that Sony is an utterly gigantic corporation, of which the PlayStation division is only one of many wings the firm contains. Granted, it’s Sony’s third-largest division, but in light of this fiscal loss it’s helpful to remember that the company’s home entertainment division saw a 26.2 percent year-on-year decrease in sales over the course of Q1 2012. Sony attributes this entirely to sluggish sales of LCD televisions in North America and Japan, noting that TV sales alone plummeted by 35 percent as compared to the first quarter of 2011.
Supporters of Sony’s gaming wing will certainly be pleased to hear that the PlayStation division isn’t single-handedly sinking the company, though it bears noting that it’s also far from leading the pack of the firm’s most profitable divisions. During Q1 2012, Sony’s mobile communications wing managed to increase its sales by a massive 132.9 percent, despite the company’s overarching losses.
That’s all well and good, but let’s get back to Sony’s grim news. Why, specifically, did the gaming division find itself floundering so badly throughout the start of this year? According to Sony people just aren’t buying home consoles as often as they used to, and the PlayStation Vita hasn’t quite been the smash hit that the company had hoped for. “This decrease was primarily due to lower sales of hardware and software of the PSP (PlayStation Portable) and PlayStation 3, partially offset by the contribution of the PlayStation®Vita introduced from December 2011,” the financial report states before noting that though Sony initially projected that the PSP and Vita would combine to sell 16 million units during the entirety of the 2011 fiscal year, it was later forced to downgrade that estimate to a comparatively paltry 12 million.
As for the future, Sony believes that next year it will be able to match these results, at the very least. The company is certainly going to try to post a profit of some kind, but in an effort to conservatively appease shareholders it can only really guarantee that its overall fiscal losses for the first quarter of 2013 won’t top Q1’s $312 million.