Sony’s no stranger to bad news of late, but investment firm Moody’s has published a humdinger for former PlayStation president Kaz Hirai to mull over while he tucks into his early morning porridge. Much like fellow credit ratings agency Fitch, the firm has cut the company’s stock to ‘junk’ status, advising potential backers to steer clear of the organisation like the bubonic plague.
According to Games Industry.biz, the financial firm has slashed the Japanese giant’s grade from Baa3 to Ba1, which is one level below investment tier. While it’s eager to point out that it sees the electronics giant’s outlook as “stable”, the aforementioned publication notes that the move may lead to an increase in the cost of borrowing cash.
In a statement released earlier today, Moody’s stated that while the platform holder has made progress with its “restructuring” efforts, its television and personal computer businesses remain challenged. “Sony's profitability is likely to remain weak and volatile, as we expect the majority of its core consumer electronics businesses to continue to face significant downward earnings pressure,” it said.
Fortunately, the investment organisation expects the conglomerate’s gaming division to turn a profit following the successful launch of the PlayStation 4, but it doesn’t think that it will attain the same figures as 2010, when its previous platform was at the height of profitability. Assuming that the company continues its current course, though, that will come in time.
Back in October, the firm’s gaming division actually saw an increase in revenue year-over-year, but ended up losing money due to the PlayStation Vita’s price reduction and ongoing research on its next generation platform. However, that minor loss was overshadowed by Sony Pictures’ dire performance, as White House Down collapsed at the box office. Damn you, Jamie Foxx.