As expected, the big cash injections come from one-off events and a weak Yen.
When Sony’s Kazuo Hirai gave up his bonus earlier this month, he said at the time that Sony would post a profit in the financial year ending March 2013. Now we can see how much: Sony’s published results show a ¥230.1 billion ($2.44 billion) operating income profit, as compared to the previous year’s ¥67.3 billion ($677 million) loss. As expected, this profit was attributed to one-off factors, mainly the sale of office building and stock portfolio assets, and a relatively weak Yen.
Sony’s sales were modestly good, but were offset by poorly performing key electronics products; Sony’s LCD television units, digital and video cameras were among the poor performers. That said, Sony’s game segment also did not fare well. Sales in Japan dipped 12.2%, year-on-year, while sales to external customers dropped 22.5%, and this was attributed primarily to a decrease in unit sales of PS3 hardware, PSP hardware and software, and PS Vita hardware. Only a favorable exchange rate stopped the sales dip from becoming worse than it already is. However Sony hopes to significantly improve sales in the next financial year with the launch of the PS4, even though, Sony admits, research, development and marketing expenses will have an impact on profits.
“At the time we developed PS3, we made a lot of in-house investments to develop the chip, the Cell chip,” said Sony Chief Financial Officer Masaru Kato, in an investor call shortly after the results were announced. This meant that the PS3 effectively sold at a loss, a fate Sony thinks it will now avoid, because most of the real work has already been done, or is being done by other companies. “We already have existing technology to incorporate,” says Kato, “and also product investment and all the facilities will now be invested by our partners, other foundries, so we don’t have to make all the investment in-house.”