Forums - Sony Discussion - Sony rejects investor's proposed sale of entertainment business

Sony CEO Kazuo Hirai says the company will not spin off a portion of its entertainment business, responding to investor Daniel Loeb of Third Point LLC'sproposed plan to boost performance at the Japanese electronics giant.

In his four-page letter to Loeb, Hirai wrote "after careful review, the Sony Board of Directors has unanimously concluded that continuing to own 100% of our entertainment business is the best path forward and is integral to Sony's strategy."

"Sony Pictures and Sony Music are critical elements of our strategy and fundamental drivers of Sony's growth for the future," Hirai wrote, later adding, "I am personally involved in the oversight of these businesses and firmly committed to assuring their growth, to improving their profitability, and to aggressively leveraging their collaboration with our electronics and service businesses."

On the electronics front, Hirai said Sony is committed to revitalizing the division, saying, "While the industry environment for our electronics business remains challenging, we have made significant progress over the past year, and we are confident that we are on the right path." Hirai touts the well-received Xperia line of smartphones and Sony's Cybershot RX1 camera, explaining that the turnaround of Sony's television business is "progressing as planned."

"We are also encouraged by the positive feedback from the announcement of the PlayStation 4, which is highly integrated with our leading networks and mobile businesses," Hirai wrote. "We are investing in Mobile, Imaging and Game, and these business units are inextricably linked to our One Sony strategy."

In May, Loeb urged Sony to let investors to take up to a 20 percent stake in Sony Entertainment and implored it to better focus its efforts on Sony Electronics.

"Sony Electronics has suffered frustrating results for the past decade, brought about by low margins, persistent losses, and weak returns on capital," Loeb wrote in his letter to Sony. "While it is true that Sony has excellent products, such as the PlayStation, Xperia smartphones, and mirror-less cameras, several of Sony's product lines — e.g., personal computers and DVD recorders — lack scale and provide commoditized products at high costs to secularly challenged markets."



You bet against Chris1596, You lose its that simple.

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YES! Loeb seems like a typical rich toolbag. George Clooney had nice words for him.

George Clooney slams Daniel Loeb over Sony.

Actor George Clooney has criticised one of the most famous hedge fund managers on Wall Street, calling billionaire Daniel Loeb a "carpet bagger" who "knows nothing about" the film industry.

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/10221328/George-Clooney-slams-Daniel-Loeb-over-Sony.html

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Dont mess with Batman!

 

Good, The idea sounded stupid to begin with.

Potential is there for more money. Selling you stand still. The gaming division makes sense to sale because they lost more money than they put into it(ps3).Sony doesn't need the gaming division but more importantly they don't consoles. But will that change with ps4? Maybe. But I doubt it will be big enough to justify.



"Excuse me sir, I see you have a weapon. Why don't you put it down and let's settle this like gentlemen"  ~ max

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ninetailschris said:

Potential is there for more money. Selling you stand still. The gaming division makes sense to sale because they lost more money than they put into it(ps3).Sony doesn't need the gaming division but more importantly they don't consoles. But will that change with ps4? Maybe. But I doubt it will be big enough to justify.


I disagree, Sony needs the gaming division.  It was during the PS2 and I think PS1 their most valuable asset.  I'm pretty sure that was also while the rest of Sony was actually doing great.  While they haven't made much money with the PS3, it was really just one "failure", not something they can't turn around.  It seems that with the PS4 it will be a big turn around, I believe they said they are not going to lose money day 1 on the PS4.  



Thank God, Loeb was nothing more than greedy crook. Good thing that Kaz is in charge and saving this company.

Predictions for end of 2014 HW sales:

3DS: 53m   PS3: 88m   360: 85m   PS4: 15m   XBO: 11m       WiiU: 10.8m   Vita: 10.2m

 

the-pi-guy said:
ninetailschris said:

Potential is there for more money. Selling you stand still. The gaming division makes sense to sale because they lost more money than they put into it(ps3).Sony doesn't need the gaming division but more importantly they don't consoles. But will that change with ps4? Maybe. But I doubt it will be big enough to justify.


I disagree, Sony needs the gaming division.  It was during the PS2 and I think PS1 their most valuable asset.  I'm pretty sure that was also while the rest of Sony was actually doing great.  While they haven't made much money with the PS3, it was really just one "failure", not something they can't turn around.  It seems that with the PS4 it will be a big turn around, I believe they said they are not going to lose money day 1 on the PS4.  


Not disagreing about turn around. But the question is will the games by Sony on the console will make a profit. Sony problem will be getting that money back for next quarter. Let's be honest kill zone isn't going to sell 2 million in 3 months. Knack probably not even a million. 3rd party will be fine because multiple consoles/PC. I wondering how they will profit next quarter.



"Excuse me sir, I see you have a weapon. Why don't you put it down and let's settle this like gentlemen"  ~ max

ninetailschris said:

Potential is there for more money. Selling you stand still. The gaming division makes sense to sale because they lost more money than they put into it(ps3).Sony doesn't need the gaming division but more importantly they don't consoles. But will that change with ps4? Maybe. But I doubt it will be big enough to justify.

 

 

 

Yeah... no. That's got to be the worst thing Sony could do. Ps4 will change it because they won’t losses their ass with every system sold. There's a big difference between ps3 and 4. 4 looks to be making profit right out the gate, or at least shortly after.



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ninetailschris said:
the-pi-guy said:
ninetailschris said:

Potential is there for more money. Selling you stand still. The gaming division makes sense to sale because they lost more money than they put into it(ps3).Sony doesn't need the gaming division but more importantly they don't consoles. But will that change with ps4? Maybe. But I doubt it will be big enough to justify.


I disagree, Sony needs the gaming division.  It was during the PS2 and I think PS1 their most valuable asset.  I'm pretty sure that was also while the rest of Sony was actually doing great.  While they haven't made much money with the PS3, it was really just one "failure", not something they can't turn around.  It seems that with the PS4 it will be a big turn around, I believe they said they are not going to lose money day 1 on the PS4.  


Not disagreing about turn around. But the question is will the games by Sony on the console will make a profit. Sony problem will be getting that money back for next quarter. Let's be honest kill zone isn't going to sell 2 million in 3 months. Knack probably not even a million. 3rd party will be fine because multiple consoles/PC. I wondering how they will profit next quarter.

I'm very certain they are going to make a profit, maybe not in the short run, but in the long run they will.  Out of the 60$, Sony will make about 7$ for each game for 3rd party.  You can see that in the link.  So if a PS4 Call of Duty sells 500,000, even though it wasn't published by Sony, they get a platform royalty, so they made about 3,5000,000$.  Add up all the other 3rd party, I think it's a safe guess they'll remain profitable.  Then the first party games should get 34$ rather than the usual 27$ because otherwise they'd be paying themselves.  So first party games don't need to sell as much to make a profit.

http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/02/anatomy-of-a-60-dollar-video-game.html