Sony to stream PlayStation games to non-consoles as part of turnaround
By Jay Alabaster
Sony will leverage its streaming technology to bring PlayStation games to devices other than dedicated consoles as part of its ongoing turnaround, but said gaming profits will still suffer and lowered sales targets for its smartphones and cameras.
The Tokyo-based company emphasized in a strategy presentation Tuesday that it met its core goal of rebounding from record losses and making a small profit last year under new CEO Kazuo Hirai. But it achieved that mainly through selling off buildings and stock holdings.
Meanwhile, despite strong products including its Xperia phones and tablets, Sony’s core electronics business remains in the red, and it cut lofty revenue targets announced last year.
Sony’s PlayStation business, an asset that electronics rivals such as Apple and Samsung Electronics can’t match, will play a key role in the company’s ongoing turnaround, with the next-generation console, the PlayStation 4, due to go on sale in time for the year-end holiday season. Sony still expects games and consoles to generate $10 billion in sales in the year through March 2015, or 12 percent of its total, but slashed its operating profit goal for the division from 8 percent to just 2 percent.
The company also hopes to expand its business by streaming PlayStation games to a wide range of devices using cloud technologies developed by Gaikai, which Sony acquired last year, it said.
Smartphone, tablet sales expectations drop
Sony also lowered expectations for its smartphones and tablets, saying it now aims for sales of $1.4 billion in the fiscal year through March 2015, down from the $1.75 billion it predicted last year.
The company is in a battle with rivals such as Huawei Technologies to become the world’s third-largest smartphone maker behind Samsung and Apple. Sony also cut its revenue goal for cameras and image sensors by 13 percent.
Sony acquired Gaikai in 2012 for about $380 million, becoming the first major game manufacturer to acquire a cloud-based gaming service. The company is already trying to leverage its gaming brand through PlayStation Mobile, a platform to encourage development for approved third-party Android devices, and has said the PS4 will be able to use smartphones and tablets as an extra screen during games.
The company also said it will bring its TV business back to profitability during the current fiscal year through March. Sony’s TV division has long been a drag on its finances, and the company has repeatedly failed to bring it back to profitability. Hirai now oversees the business personally.
Sony has been unable to leverage its large movie and music holdings to boost its electronics business, and shareholders have called for it to spin off some of its entertainment holdings, which include franchises like Spider Man and 007. The Japanese business newspaper Nikkei has reported the company is mulling a proposal from a major shareholder to sell off such assets.