Sony has been a company in search of clear focus. Gone are the heydays when Sony could dabble in games, movies, music, and consumer electronics and do everything equally well. The company has been struggling with profitability. Last year, Sony had a staggering net loss of 128.4 billion yen ($1.1 billion), which was in part due to the sale of the VAIO PC business. The company, like other manufacturers, hasn't figured out what consumers are looking for next when it comes to televisions, media players, or smartphones.
For the third quarter ended on December 31, 2014, Sony is forecasting sales of 2.56 billion yen ($21.1 billion) with a net income of 89 billion yen ($736 million). For the fiscal year ending on March 31, 2015, Sony is forecasting sales of 8 trillion yen ($68.3 billion) with net loss of 170 billion yen ($1.45 billion). These numbers are higher than Sony's previous forecasts in October; still losses, but better losses than before. For Sony management, that's a win.
Last year, Sony bet the ship on its Game & Network Services division and the success of the PlayStation 4. This year, that bet seems to be paying off. Within the division, sales increased 16.8 percent year-over-year to 531.5 billion yen ($4.4 billion), primarily due to the strong sales of the PS4. Those sales came to 6.4 million units, up from the 4.5 million sold in the same quarter last year. Software was also up to 147 billion yen ($1.25 billion), over last year's 128 billion yen ($1.09 billion). This made the division the strongest of Sony's eight different groups when it comes to sales.
Unfortunately, it wasn't all roses and sunshine, as the PlayStation Vita and Vita TV are on life-support. Sony wrote-down 11.2 billion yen ($95.6 million) in components related to its Vita lineup. Total portable shipments worldwide only came to 1.4 million, down from 2 million last year; there was no breakdown given. The PlayStation Portable was on the market for 7 years before the Vita touchdown, but it's probable that a Vita successor could come much sooner. That's if a successor is even a potential idea; Sony could simply decide to leave the portable market altogether.
With the promotion of Kaz Hirai to chief executive officer in 2012, Sony has been doing its best to find a focus and cut away the arms that aren't proving profitable. The VAIO business was only the beginning of the cuts, which still accounted for heavy losses this quarter. Earlier this week, Sony announced that it had sold Sony Online Entertainment to investment firm Columbus Nova, with the studio being re-branded as Daybreak Game Company. The sale is another write-off for Sony, this time to the tune of 6.2 billion yen ($52.9 million).
Those write-off costs were related to the games SOE currently has in development, including Everquest Next, Landmark, and H1Z1. It seems Sony wasn't interested in the costly business of developing online titles anymore, instead choosing to focus on console game development.
"We've concluded this was best for both of us," a Sony spokesperson told the Wall Street Journal.
For the new Daybreak, the sale represents a chance to expand beyond the confines of a single platform holder. Now, there are no limits outside of logistical problems. If they want to develop H1Z1 or DC Universe Online for Xbox One, it's simply a matter of hiring the right people.
"As part of this transition, SOE will now become Daybreak Game Company," said the company in a Reddit statement. "This name embodies who we are as an organization, and is a nod to the passion and dedication of our employees and players. It is also representative of our vision to approach each new day as an opportunity to move gaming forward."
"I can confirm that all SOE games will continue on their current path of development and operation," a Daybreak spokesperson told USgamer in a statement. "In fact, we expect to have even more exciting developments available as a result of this acquisition. You can also expect to see us focus more on our untapped potential as a multi-platform gaming company too."
For Sony, divesting itself of the former Sony Online is a question of focus. The company is still figuring out what it wants to be and removing the divisions that aren't fitting the company vision. The PlayStation 4 means the Game & Network Services group is riding high, as is the Mobile group with its Xperia line of phones. Unfortunately, Sony Pictures is a big drain on the company, especially following the hack that saw The Interview removed from general release and various production info leaked to the masses. In fact, the earning forecast shows the company paid $15 million in investigative costs related to the attack.
The Sony we have now isn't the Sony we had five or ten years ago, and there will probably be more cuts made before the company figures out who it wants to be in the 2015 and beyond. Bright side: At least we know the PlayStation 4 is in for the long haul.