Sony’s Revenues Rise with PS4, But Layoffs and Shifts in Operations Are Coming

Sony's games division (which covers PS Vita, PS3, PS4, Sony Computer Entertainment, Sony Online Entertainment, and PlayStation Network) recorded sales and operating revenue of 441.8 billion yen (or $4.35 billion USD) for the quarter ending Dec. 31, 2013. That's a 64.6 percent year-on-year increase thanks to the launch of the PlayStation 4 in major markets around the world last November. Sony also noted in reporting that its financial results that favorable exchange rates contributed to the sales and operating revenue increase, but were partially offset by a "significant decrease" in PlayStation 3 hardware and software sales.

The games sector reported an operating income of 18 billion yen ($172 million) for the quarter, a 13.4 billion yen increase on the same quarter in the same period a year ago, thanks to an increase in sales and favorable exchange rates. Results were partially offset by the costs associated with manufacturing the PS4. Operating income for the quarter also included a 6.2 billion yen ($59 million) write-off of certain PC titles sold by Sony Online Entertainment.

Overall, Sony reported 2.41 trillion yen in sales and operating revenue ($22.99 billion), a 23.9 percent increase over the same period last year and an operating income of 90.3 billion yen ($860 million) for the period, an increase of 43.9 billion over the same quarter last year. Sony reported 5.9 trillion yen in operating revenue ($56.2 billion) for the nine months ended Dec. 31, 2013 for a 16.4 percent year-on-year increase. Sony attributed these strong results to the launch of the PS4 and smartphone sales; however, they are offset by poor performance in the IP&S sector.

On a related note, Sony announced plans to divest itself of its Vaio PC business. The company will sell the division to investment firm Japan Industrial Partners. That deal is expected to be finalized by the end of March. Around 250 – 300 of Sony's employees in that division are expected to be hired by the new company taking over the Vaio business. Sony also announced that it plans to increase production of 4K and 2K TVs, but will spin off its TV business as a wholly owned subsidiary by the end of July 2014. As a result of these changes, the company said that it will lay off 5,000 of its global workforce by the end of the 2024 fiscal year (March 2015).

Sources: Polygon, VG247

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