Sony Eyes Healthy Profits By 2018 With New Focus On PlayStation And Entertainment

Sony announced its latest corporate reshuffle which will see it focus on its PlayStation and its entertainment businesses, as well as its CMOS image sensor unit, as it bids to return to healthy profit levels by 2018.

The company has reported six net loses over the last seven years, but it said that this new three-year strategy is aimed at delivering a 500 billion yen ($4.2 billion) consolidated operating profit for its fiscal 2017. Sony recorded a $1.2 billion loss for its last full year of business (fiscal 2013) last March, and it is expected to post another loss — albeit a slimmer one — for FY2014.

PlayStation and entertainment (Sony Pictures and Sony Music) aside, its other business interests will be managed in two ways — as units that can provide “stable profit” levels, or higher risk business where Sony will focus on “volatility management”. Its ‘Imaging Products & Solutions and Video & Sound’ business, for example, falls into the former category — because Sony doesn’t see the general market for these products changing massively. Meanwhile, its mobile phone and TV businesses are in the latter basket because “both markets are experiencing intense cost competition and commoditization.”

The new focus will see Sony’s video and sound business spun into its own organization — as it did with its TV business last year. The Japanese firm said that it will also “move forward with preparations for splitting out other business units,” although it hasn’t specified which ones at this point.

Sony is giving these units more freedom and autonomy in order to give each one a clearer focus on its business and profits, and the ability to make faster decisions. Those ingredients will help bring the best out of the more struggling areas of the company, Sony said.

Reuters early reported that analysts are tipping the Japanese giant to eventually pull out of its loss-making mobile business altogether. That’s not entirely clear from today’s announcement, although the as-yet-unnamed businesses that will be spun out could include mobile… and those units could follow the path as Sony’s Vaio PC business, which was sold last year as part of a reorganization.