Despite the bruising from PS3’s dismal sales, Sony announced booming net profit in the last quarter, rising 43-fold to $646.7 million. Taking the credit is a strong electronics division, and the popularity of Sony films Superbad and Spider-Man 3.
Digital Journal — With each passing month, Sony is returning to its glory days in both financial success and public impression. Not only did it recently cut the price of its money-losing PlayStation 3, but Sony unveiled optimistic results from its latest quarter. The numbers are staggering: net profit soaring by 4,300 per cent from last year, and operating profit at its electronics division increasing 12-fold to $939 million.
One of the biggest stories from Sony’s past quarter is the recovery of its electronics division, which accounts for 70 per cent of the company’s annual $70 billion in worldwide sales. What were some of Sony’s smart moves? It resuscitated TV sales by partnering with Samsung in a screen-producing venture; it strengthened its Cyber-shot digital camera lineup last year; and CEO Howard Stringer scrapped unprofitable products, like the robot dog Aibo.
Masayuki Otani, an analyst at Maruwa Securities in Tokyo, told the New York Times:
Sony’s strategy of returning to its electronics roots is paying off. Sony knows it needs to be pouring money into new technologies to stay a step ahead of the Chinese and South Koreans.
Also helping Sony’s cause was the publicity and investor confidence it received after announcing the launch of a new TV technology called organic LED. The ultra-thin screen will debut in Japan on Dec. 1.
Not to be forgotten is Sony’s motion picture division. Sony Pictures Entertainment got a big boost from two blockbusters this year: Superbad raked in $121 million (on a $20 million budget) and Spider-Man 3 grossed $336.5 million (on a $258 million budget).
But it wasn’t all shiny happy news for Sony. Its gaming division suffered a few blows to the midsection — its quarterly operating losses swelled to $848 million, double the amount from last year. As advanced as the PlayStation 3 is, the powerful console isn’t built to be a money-maker for Sony. As the Guardian notes:
The PS3, with its Blu-ray high-definition DVD recorder and high-performance microchip, is the most sophisticated console on the market. But the cost of the components and the time required to develop new software to do the machine justice have hit sales and forced Sony to implement several price cuts, at the expense of profits.
The PS3 has fallen behind its rival Nintendo Wii, despite Sony’s push to market Blu-ray movies to PS3 consumers. Its poor position in worldwide console sales has persuaded Sony to release a less expensive PS3 model on Nov. 11. Whatever the reason, Sony wants the PS3 to outperform expectations this holiday season. And no matter how profitable the entire Sony corporation will be in the coming quarter, Stringer and company will do everything in their power to keep the PS3 from becoming an ugly albatross hanging around their head.
