Hard times for SONY

Discussion in 'Joker’s Funhouse (Off Topic)' started by TheBirdOfSteel, May 14, 2014.

  1. TheBirdOfSteel Committed Player

    Sony released their finacial figures and have lost $1.2 billion despite rising sales.

    Apparently this is due to the restructuring goign on after selling off their PC business and no matter how good the PS4 sells , the lack of PSP/Vita and TV sales are causing the company to haemorrhage money rapidly.

    So now they have execs taking 50% paycuts , they are selling off departments and even have SOE shutting down some MMOs (Not DCUO) all while expecting another loss of $487 million. :eek:

    Im no business expert but its not looking good at the moment at all , however apparently after the next 12 months the money loss should stabilize and Sony can focus on gaining profit again.

    Although if it doesnt Sony will have to sell off what it has less , including Playstation to another tech giant like Samsung.

    It doesnt sound right at all to me, imagine , the Samsung Playstation 4. :confused:

    Its bizarre seeing such a huge company like SONY taking such a hit but coming to think of it , nowadays theres not many SONY products id purchase other than the PS4 (which i did) and the Xperia Z2 smartphone. Would love a 4K TV but my God the prices are too high right now.

  2. Deathmike Loyal Player

    I don't really get this obsession with other people's money.
    Personally, I'm just concerned with my own finances. Sony can fend for themselves.

    Deathmike out.
    • Like x 2
  3. Octantis New Player

    Sony has so many things that they dump their money into that's it's hard to tell where the hit's coming from. They're a multinational country subject to probably more than a contries' tax laws as well, with the U.S. especially increasing taxes on businesses and wages (obviously not for the Japanese execs, but on their American branches, sure).

    You have payroll costs, medical coverage (which became a nightmare for any American branches), investments, general overhead, property tax/leasing, marketing, legal, etc. etc. Any number of small things add up, like an increase in rent or amenities at their office locations.

    As you say, though, if they're getting an increase in revenue, that's a good sign. A loss in profits, then, is environmental, economical, political, or some combination. The rising sales shows the company is still "growing" despite its financial obligations. But that's pretty much the same story for many companies, not just Sony. A lot of them are dealing with unexpected hikes in overhead costs, forced wage increases, medical changes, and taxation, and have listed losses. They've been doing it for the last several years since the world economy collapsed.

    But growth is good, no matter how much baggage it comes with. None of it will be enough to make them sell their Playstation brand. If anything, they'll sell Sony Pictures first, considering how many flops it's made lately (Cloudy with a Chance of Meatballs 2? Really, Sony?)

    Also: I am a business expert ;)
  4. TheBirdOfSteel Committed Player

    Thanks for your indepth response bud!

    Enjoyed reading that , learnt a few things!

    Fair enough , but its the world we live in to be concerned/interested about companies finances. Especially one as huge as SONY.

    I for one am not interested in any ones money other than myself and friends/family.
    • Like x 1
  5. Amanda Bailey Devoted Player

    I hate that when Sony suffers, the game suffers, and the ultimately we all suffer. Get your **** together Sony...
    • Like x 1
  6. Octantis New Player

    From the sound of it, they are. You don't cut executive pay unless that's a last resort (ethically that should be the first thing you do, but you know how corporations work ;) ). Even selling off departments and cancelling low-returning investments are a good sign. There's only so much overhead you can reduce before you make actual cuts.

    Take Target, for example. About 7 years ago they nationally enforced keeping all stores closed between 11pm until 6am. No more night shifts. This allowed them to save on energy costs. They even replaced every light in every building (a massive undertaking) into energy saving ones. Those changes alone saved them several million. if changing lights and power usage can make such a difference, imagine what selling a department does.
    • Like x 1
  7. Amanda Bailey Devoted Player

    I know they're doing better because the game is doing better IMHO. Remember when they cut a bunch of people off? I bet that was when Sony hit the ground at first or right before, now that the Devs are hiring more people, Sony Corp is next :)
  8. Octantis New Player

    True story. Hiring new blood is a very good sign. Not only does it mean that the product is making a return on its investment, but that the company has faith enough in its future to invest more money into it :)
    • Like x 2
  9. Breakforce Loyal Player

    Heh that gave me a good chuckle.

    I don't see them selling off the Playstation brand any time soon. It is too big for them, both in name and revenue. Likely, their smaller weaker performers will be the ones to go.
    • Like x 1
  10. Burning_Baron Loyal Player

    The last thing they would do is seel play station. If worst comes yo worst they restructure the company and split it up into smaller things. Playstation would likely be its own company with the same personal
  11. Octantis New Player

    I hardly think layoffs are a sign of poor decision making exclusively. Hundreds of companies have been forced to downsize their workforce over the past half-dozen years. Decision making in business amounts to just "Where should and shouldn't we invest our assets?" A poor decision in business is not seeing a return on your investments.

    Sony is seeing a rise in profits, which indicates that the company is making good investments, and therefore good decisions for their shareholders (which is their first and foremost responsibility, regardless of what consumers believe - shareholders ALWAYS come first). The decrease in revenue can ONLY be explained by an increase in costs. There is absolutely no other explanation. The only conclusion we can draw is that Sony's decisions in what to invest their money in is paying off, but it's not enough to recoup their costs.

    From a business perspective, Sony is doing the right thing, and is also doing what many many many companies are doing right now to survive the now 6-year global economic callapse. It sounds like you have a jaded consumer perspective, though, which I'm sad to say that consumers to a corporation are the fourth most important people: 1) Shareholders, 2) Executives/Management, 3) Employees, and in last place 4) Consumer. It's not that they don't care about you, it's just that their money legally obligated elsewhere first. Again, that's "legally obligated". That's why they make all consumers sign Terms of Service Agreements that essentially say "We don't have to care about you, but we can claim everything you do or say as our own."
    • Like x 1
  12. Octantis New Player

    You may not want to debate, and that's fine, but I will get the last word in. I took a look behind me. There's no one there forcing my words. But what is influencing them is decades of schooling, practice, error, observation, and research.

    The world revolves around money, and it would behoove people to understand it. You may not have and audible "sound" of being a jaded consumer, but your word choice clearly emphasizes it. If my word choice paints me to sound like a corporate lapdog, then so be it. I'm not, and I quite hate corporations ever since the Supreme Court ruled that the existence and sole responsibility of a corporation is to ensure its shareholders don't lose money - I always felt that their responsibility should be to making quality products for consumers, but apparently a person who loans money to someone is more important in terms of getting that money back than is a person who buys their products.

    That's just the way the world works. I'm not spewing corporate garbage. I can't lie about companies needing to pay rent, or pay employees fair wages, or paying tariffs, or shipping costs and electrical bills, medical coverage for their employees, dividends, all the while seeking how to expand and keep up with competition, research and development, marketing to influence the public to buy their products, annual taxes, fees to lawyers and law firms, strict adherence to federal guidelines and fees associated with them such as the half dozen business licenses they need for each county (yes, county) they plan to do business in, and et cetera times about a thousand. It's dizzying the stuff that goes on a balance sheet.

    There's a reason I got out of the Business business, let my wife join the armed forces, and opted to become a stay-at-home dad. It's a simpler world when I only have to worry about dirty diapers and dinner instead of dealing with headaches associated with running my own business for the better part of 10 years.
    • Like x 5
  13. Breakforce Loyal Player

    Well if this is not the pot calling the kettle black I don't know what is.

    There are many reasons that a company may lay off employees. Some may be from poor decision making by the company, others may actually be from making good decisions. Eliminating redundancies and creating more efficient processes and workflow for example.
    • Like x 2
  14. The Enquirer Steadfast Player

    He tends to avoid trying to hold conversations for too long in the fear he's actually wrong or it actually turns into an intelligent debate I've noticed. I wouldn't bother much with him.

    OT: Did you know microsoft (I'll have to find more recent figures to confirm this now as I have no idea how Xbox One sales effected this) has never made a profit off of it's xbox division? However the Playstation is one of the few things Sony has now that is proving successful. It's more likely they would convert to a gaming only company rather than selling the Playstation brand. Which would actually be pretty cool because they have done a lot of nice things with the PS4 that may lead to me eventually getting one.
    • Like x 3
  15. Octantis New Player

    But Sony's revenue is up. That's a fact.

    It's below the 19% growth margin that is, at this point, the industry standard, but it is nonetheless up from last year (in fact it's at over 11%). I agree that lay-offs are signs of things going sour, but you have to look at the cause of what's making things go sour. You can't just see lay offs and assume the company isn't making money. In Sony's case, they are, and they made more this year than last year, but they're still at a deficit. So what changed?

    That was my point, if revenues are up, something else is eating up their money. There are two equally likely scenarios: 1) you're correct in that it's just inefficiencies in various places in their business model, or 2) I'm right in that is geopolitical issues, general overhead cost increases, increases in taxes, etc., but basically their costs went up. My guess, though, is that they're just making investments where they shouldn't. I mean, 22 Jump Street? Why, Sony? Why?

    Things to note: Sony's revenue is up from last year by 11%, and it's debt-to-earnings ratio is low.

    The problems seem to come from unprofitable sections of the company (such as their tv manufacturing, which apparently have been hurting for a decade), and a transition out of the PC market. Apparently the losses in overall profit can be accounted for by simple (I say that term loosely) restructuring. One thing is apparent, though, that they're not losing money because they're evil.

    Regardless, there is doubt on their CEO as to whether or not he can completely revive Sony, whose stock is continuing to fall, but only by a few points at a time - which is normally nothing to worry about, especially in this global economy, but it is a trend. You'll probably see him step down or replaced after the shareholders call for his resignation. Personally, I don't think that, for a company as big as Sony, $490 million in loss is that big of a deal.
    • Like x 1
  16. MetaMax75 Devoted Player

    We need a new multinational conglomerate to get into the electronics business named BRO (Business Relations Omnipresent). They could then buy Sony and rebrand the PS4 as the BROStation 4 or BS4.
    • Like x 2
  17. Octantis New Player

    Their marketing campaign could include a bunch of college guys in polo shirts calling each other "Brahs" and saying you could be a Bro too by getting a BROStation.

    Additionally, when someone wants to sell his BROStation to someone else, the latter can say "I don't need your BS."
    • Like x 1
  18. Octantis New Player

    Ooh!! And for the BROStation, they could make one of these:


    And call it the:

  19. MrMigraine Devoted Player

    All Sony has to do to get back into the black is sell the movie rights for Spider-Man back to Marvel/Disney for a huge windfall. :D
    • Like x 1
  20. Breakforce Loyal Player

    So it is a poor decision for a company to not have invested in a more efficient technology that DID NOT EVEN EXIST ten years prior?
    • Like x 1