Sony Updates 2008 Forecast, Expects $2 Billion More in Losses


Posted January 22, 2009 - By Brian Leahy

Before we kick this off, I want to give a shout out to Raymond Padilla for giving me yet another negative Sony story to write. He loves throwing me to the fanboys. Now, onto the story:

We already knew Sony was going to post its first operating loss in 14 years and the company expected losses of $1.1 billion. That figure has now been revised to a whopping $2.9 billion. At over 100% more than its original estimate, Sony cites the strong performance of the yen and lowered worldwide demand for its products as the culprits.

As previously mentioned, it looks like Sony will be fast-tracking its planned restructuring, which would cut 16,000 jobs by March 2010. The games division (PlayStation) was also cited for underperformance and is expected to lose $338 million.

This is quite a turn from a little over 10 days ago when the number was $1.1 billion. Oh, and before we go any further, I'm going to remind everyone that although Sony's games division is involved, this is so far from a "LOL PS3 vs. Xbox 360" argument. In fact, the main reason appears to be stalling sales of Sony's BRAVIA line of HD televisions. In fact, Sony will be closing one television plant in Japan, as well as cutting design employees by 30%.

Back on the gaming side... With analysts continually pointing to a price-cut for the PS3, it just may not be possible at this point. Sony doesn't make a profit on the PS3 hardware yet, and probably doesn't want to start losing even more money for each unit sold. This is a dilemma as they definitely need to grow their install base in the U.S., but can't afford the financial hit right now. I don't think we'll be seeing a price cut in April, especially since that's just 1 month after Sony's 2008 fiscal year ends in March.

Anyway, I'm sure you guys will find someway to talk about Killzone 2 (FEBRUARY 27th!!!!!!11!one1!) anyway, but hopefully that got it out of the way. FORE!

Sony Updates 2008 Forecast, Expects $2 Billion More in Losses


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