What does this mean for Sony's gaming division and Sony as a whole?

It means that they have to do something big to save cash, otherwise if the crisis goes for as long as most economists are projecting they'll go bankrupt. They could also try to sell some of their assets in order to get more cash.

Bottom line, we should see some pretty big news about Sony's restructuring sooner rather than later.

As for the gaming division specifically, no one knows yet (at least not people outside of Sony).

The numbers are accurate, but completely irrelevant.

Japanese capitalism is structured into gigantic industrial-financial networks called keiretsu. Heck, Mitsubishi Motors lost money for seven years, but stayed afloat - the MTFG keiretsu considered it was important to retain a domestic car biz.

Since Japan is, unlike the US, a net creditor in the world-system (other countries owe it money), it can bail out its electronics industry until the cows come home. It did this during the post-Bubble crash of the 1990s, and it will do it again if it has to.

Fortunately, it looks like East Asia, Russia, and the EU are all throwing money at their economies, so a global recovery should start this spring. Sony will ride out the storm with minimal damage - demand from Russian and Chinese consumers will start to compensate for the decline in US demand.

It must be nice to wave a magic wand and call billions of dollars of debt, loss and declining sales irrelevant.

NJ5, thanks for the response. Also excellent job on the thread you made the other day, about Sony and how you may be wrong. Great read.

Interesting, I had never heard of this Keiretsu name. However according to wikipedia Sony is not in that system. Is this wrong?

@Arius Dion: Good to know :)

Is it that amazing to imagine them being bailed out (Sony)? Its happening all over the world now, even here in Norway there was an emergency package set at around 80 billion dollars worth to save certain industries and I'm sure you have caught wind of the domestic packages in your own country as well. Big valuable companies will often get help in situations like these, in a worst case scenario there could be a merger or partnership with another player (Sanyo, Toshiba, Pioneer or perhaps even LG). GM, Ford and Chrysler seem to be holding fast through the shitstorm and they were in a lot deeper waters than this, so I see no reason why Sony won't pull through somehow no matter how badly many want to see them sink.

It looks like Sony would have to sacrifice control of their company to be a member of Keiretsu.  So the numbers are relevant, Keiretsu is irrelevant.

Sony will come out of it, of course, but they will likely lose a lot of assets in the process.

That's not what I'm saying. There is a lot of meat to cut in the company before any talk of bailouts can even exist. They will have to be in very dire straits to be begging for money from the government. I don't think you want to aspire to be in the auto companies shoes. Or any bailed out company for that matter.

Just because you can get a bailout does not mean that all the negative financial data is irrelevant.

This is very true, I hope no one thinks otherwise.