HappySqurriel on 30 December 2008
With how the economy has pushed people's spending lower, a falling stock price and missing sales forecasts are not as bad this year as they were in previous years ... Sony (as a company) has a lot of problems though
- Sony (in what appeared to be a good move at the time) built a fairly large financial and insurance division in the 1990s, which was one of their most profitable divisions leading up to the credit crisis, but in recent times is much more of an unknown liability (like every financial institution around the world)
- Sony's Electronics are positioned in the market as a luxury brand and (in recent years) have been facing increasing competition from other premium brands as well as the rise of inexpensive Chineese manufactured products. In order to maintain their market position they have to spend a lot of money on Research and Development which means that (even with massive revenues) the division struggles to be profitable. Recently, the slowing economy is making people more careful with their money, and Sony is positioned to be a big loser as people favour inexpensive products over luxury items.
- Sony's gaming division was (in my opinion) their strongest division because the division would take small losses up front when launching a system, soon reduce costs on the console to (essentially) breaking even, and pull in a lot of money from licencing and game sales.
Sony also has several other divisions, some of which produce content like movies and music which have their own problems and strengths, but I think I covered the main ones that are hurting Sony at the moment.
