Staggered television sales; the continuing death of the compact disc; the research, development, production, and release of a new high-end handheld gaming system; the acquisition of Ericsson’s stake in a shared smartphone business and the development of gaming-centric smartphones; two tablet releases ignored by consumers; a massive earthquake that crippled the company’s corporate and production centers in Japan; riots in the United Kingdom that saw a warehouse of DVDs and CDs destroyed; a hacking scandal that saw the company’s gaming network down for over a month and consumer confidence in the service shattered.
Sony had an expensive year.
Just how expensive is becoming clear. Reuters reported on Tuesday that Sony has doubled its forecasted loss for the last fiscal year, $6.4 billion. The PlayStation makers attribute the record loss to tax charges in the U.S. but the train of calamities, unfavorable market conditions, and declines in its formerly popular businesses certainly didn’t help.
One-time PlayStation boss Kaz Hirai will take over as Sony CEO in June and the man is working hard to get his company back into the black after reporting losses for the past four years. Cost-cutting measures include massive layoffs. Sony also announced that it would cut 10,000 jobs, 6% of its total global workforce, on Tuesday.
Sony’s financial reality at the beginning of 2012’s second quarter tells us a few things about what we can expect of its PlayStation business in the next couple of years.
A 2013 release for PlayStation 4/Orbis is unlikely. Sony spent monumental sums of money developing and releasing the Vita in the past year. Vita has proven itself as a machine that hosts great games—just look at Mutant Blobs Attack and Sound Shapes—but it has a long uphill battle in front of it as far as establishing itself as a viable money making platform. No doubt Sony is still spending heavily on R&D for a new home console, but the cost of marketing, producing, and developing software for a new machine in the next twelve months is prohibitively high, even for a company that isn’t attempting to consolidate its many failing branches (TVs, physical media, etc.) while trying to bolster healthier ones (PlayStation.)
With plans for a next-generation console pushed back until at least 2014 though, Sony can be expected to do everything in its power to reignite PlayStation 3 sales. It will do this by potentially further cutting the price of the device, but also by releasing more major games for the system. Naughty Dog’s The Last of Us and Team Ico’s The Last Guardian will not be the last of Sony’s marquee PS3 titles, if the company wants to bolster the profitability of its PlayStation unit. With Heavy Rain-creators Quantic Dream showing off new PS3 technology and God of War 4 heavily rumored, this scenario seems likely for the company.
Sony is hurt and bleeding money, and that means gamers hungry for technology will just have to wait. For those still enjoying the PlayStation 3 and that are excited about its potential integration with Vita, all’s not lost.