Will sony make it out of this recession?

[NJ5]

Being big is not going to save them. In fact I think they'll get a lot smaller in an attempt for profitability.

Currently they are surviving purely because they can borrow money at fairly good interest rates. However they already had a downgrade in their credit worthiness:

http://www.reuters.com/article/rbssConsumerElectronics/idUST28190220090527

This means two things... first it should be getting more expensive for them to borrow money (as investors see them as more risky to lend money to), second if they keep losing money, that can well result in another downgrade.

They're also getting hurt by the stronger yen, particularly against the U.S. dollar. As the U.S. dollar isn't expected to go up significantly anytime soon (due to low interest rates in the U.S., and the fact that Japan's interest rates can't go much lower than they're at already), this will probably continue to hurt them for the foreseeable future.

Finally for sales themselves. Sony is not in a good position competitively. They don't dominate any single significant market, having lost TVs to Samsung and gaming to Nintendo. While some people are expecting a real economic recovery soon (I'm not, I don't think it's a sustainable recovery), even those optimists are forecasting a very slow recovery where consumers will continue to be hurt by unemployment and low wages.

So frankly, I don't see many positive developments for Sony's situation. They have hard competition, a suffering customer base and bad exchange rates hitting their revenue directly. Whether this will result in a bankruptcy or not, depends on their actions and on how bad the economy gets from here on.