Sony has revealed that it now expects to post a loss of around $2 billion for the financial year. This is four times what the company had originally forecasted, showing that the tech company is in even worse shape than was previously believed. The huge loss is being explained due to the poor performance of Sony’s smartphones, with the Xperia division causing a $1.7 billion loss due to a large impairment charge.
This is the sixth downward revision that Sony has had since Kazuo Hirai took over as Chief Executive. Hirai took the job promising to get Sony back into profit by focusing on its mobile, gaming and imaging divisions. This had originally involved expanding the smartphone business but with sales of the Xperia well below target the Chief Executive now wants to change strategy and instead cut staff and focus on high-end models.
The PlayStation brand is still performing strongly for Sony however. The tech giant confirmed earlier in the year that its gaming division was in profit and outselling it main rival. For the quarter ending 30th June 2014, PlayStation consoles had sales almost double the previous year and sold three times as many units as Microsoft did with their Xbox consoles.
PlayStation still remains a small part of Sony’s overall business though and with the company facing further losses it could negatively affect further development, although it seems more likely that with the PlayStation 4 performing so well they may invest more in the division to help maximise their profits. Especially considering it is currently leading the next-generation console war by a significant margin in terms of sales, putting distance between it and both the Xbox One and Wii U.
Whatever the case it is clear that Sony faces a tough challenge to get back in profit.