News Article

Investment Firm Encourages You to Steer Clear of Sony's Stock

Posted by Sammy Barker

Downward spiral

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.

[via gamesindustry.biz]

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User Comments (19)

BornOfEvil

#1

BornOfEvil said:

White House Down was actually a very good movie, I don't see why it bombed. WHD aside, I can see Sony's smartphone division doing pretty well if the Xperia Z1 Compact is well received, which it should be because it has better specs than most other popular phones.

Their TV divisions problems continue to baffle me, because they make some pretty solid TV's. I have an old KDL model Bravia TV, and the picture and sound quality are amazing.

Scollurio

#2

Scollurio said:

If sony manages to bring some of the fresh wind they're blowing in their gaming devision over to their other products they should be able to recover. If I see those VAIO lapops everywhere for almost a third more expensive than a competing product from Asus it's no wonder most of those products bomb. I do have a 32" Bravia myself and love the product, but I waited for an opportunity to pick it up for below € 300,- so... the PS4 is GREAT value for money, bring that over to your other products!

NathanUC

#3

NathanUC said:

I think their Bravia and Xperia lines really need better marketing. Both are amazing products that receive very little word of mouth/praise. Sony needs to work to get consumers excited about their products again like they were able to with the PS4. The Xperia Z line (Z, Z1, Z Ultra, Tablet Z) is absolutely fantastic in every possible way. At their time of release, each has been miles ahead of competition but I very rarely hear anything about them. Samsung and LG have really stolen the market attention in mobile devices.

The Vaio brand has been a mess lately with over priced builds. Only Apple can get away with selling such underpowered/overpriced devices.

Epic

#4

Epic said:

To tell the truth the only divisions that still makes money for Sony are the gaming, music and movie divisions the others even their smart phone division are having problemns right now and that's what it has always concerned me about Sony.
If the other Sony divisions don't get their stuff together it might affect the others that are doing good for their lack of revenue even cause them a slowly death, believe it or not the PS4 can't tank all this damage alone.

get2sammybAdmin

#5

get2sammyb said:

@nathanuc1988 For me, I think the biggest problem is that they have too many products. I know they want to cater to multiple markets, but it's confusing how much choice there is. I really feel like they should have like two different types of Xperia, and promote the hell out of them. It's crazy how they have all these options, and they have terrible names that sound like code. How does the average person ever know which to pick?

My knowledge of the smartphone business is about as good as my understanding of bird seed, so maybe I'm wrong. I just look at Sony's portfolio and want to weep, though, because they simply make too much stuff in my opinion.

Bad-MuthaAdebisi

#6

Bad-MuthaAdebisi said:

White house down was not a good movie whatsoever. It wasn't funny enough to be considered a cheesey action movie and it just wasn't good enough anywhere else to be considered anything else. Its was awful but I did enjoy it, it has at least a half an hour too long for most people imagine 2 hours 11 minutes? Also it didn't help that 'Olympus has fallen' released earlier in the year and which was pretty much the same movie. They do make too many rubbish phones. TVs and laptops are expensive if you want it. I've never owned a VAIO or a Bravia etc. I have however owned many Samsung products. Sony is getting slaughtered by Samsung.

BornOfEvil

#7

BornOfEvil said:

@nathanuc1988 Sony's partnership with T-Mobile is starting to increase Xperia awareness, but the TV's are my biggest concern. I've yet to see a commercial about any Bravia TV and then there's the insane price.

Sony needs to build a TV the same way they built the PS4 and advertise the hell out of it. They also need to advertise their phones, they can't expect T-Mobile to do all the work for them.

@RyoHazuki I've owned a lot of Samsung phones and they aren't that great, even the Galaxy S3 or 4 is overrated. Samsung and Apple phones are going to sell based on brand name, not product quality.

I was actually thinking of upgrading to a better Samsung phone, but then I used an Xperia Z1 and then Sony announced the Z1 Compact at CES - which has better specs than the Galaxy S3 & S3 Mini, which is what I planned on upgrading to - and now I don't want anything to do with a Samsung phone for a good, long while.

Bad-MuthaAdebisi

#8

Bad-MuthaAdebisi said:

@BornOfEvil just poor marketing all round but I guess that might depend on budgets for those depts. Where was the vita marketing. I had never heard of it until I looked into a ps4 pre order. I ended up buying one before my ps4 pre order. Ridiculous.

Bliquid

#9

Bliquid said:

I guess Sony should just start developing games for mobile.
Oh, wait, that was another one...

rjejr

#10

rjejr said:

"the firm has cut the company’s stock to ‘junk’ status, "

Technically the companies bonds were cut to junk status, not it's stock.

Savino

#11

Savino said:

So... Sony should stop making hardware and publish its games on xbox and nintendo?

Bad-MuthaAdebisi

#12

Bad-MuthaAdebisi said:

@Savino nope, software and home console hardware is one of the few profitable arms of the perplectapus. Its a lot of the rest that may end up getting laid to waste.

eaglebob345

#13

eaglebob345 said:

@Savino I believe that would but temporary fix, that would hurt in the long run, but only if they were selling their console for profit. If they don't make a profit off of the console early, or take a super loss with the PS3, then that would be an option, but I am hoping Sony is not dumb enough to screw themselves over again. They think they are like Microsoft, but they are not. They need to wise up before it is to late.

Edit: Trying to please the meat-headed (console) graphics whores is what got them in this mess from the PS3. Hopefully they don't blow exorbitant amounts of money on games, like what they blew on movies like White House Down, with little to no profit made.

Re: Edit: I am interested to see if they use the funds from PS Plus to supplement the company and get back on their feet, or if they risk it all on the video bonus question, err... I mean trying to buy exclusives with it like Microsoft. I mean come on, how esle would the Xbox division take a $2 billion loss in, while they siphon money from their fans from memberships? Smells like money-hatting, which Microsoft can afford, but Sony can't, and should not try.

Jaz007

#14

Jaz007 said:

Shame White House Down bombed, it was a great movie. Maybe Sony needs to expand more into life insurance? That seemed to be making them money last I checked on it. (Which, admittedly, has been a while.)

Zombie_Barioth

#15

Zombie_Barioth said:

I'm sure a lot of it is marketing. I don't think I've even heard of their Xperia line outside of the Xperia Play, much less seen one for sale anywhere.

Sony also tends to overprice themselves compared to the competition. Whether or not its due to also trying to out tech them I don't know, but whatever the reason they seem to have a knack for pricing themselves out of most peoples' price range.

I have a feeling that the sort of attitude that caused the PS3's launch price is the cause though, not just the arrogance but the overambitious amount of tech and features crammed into into it. A premium device deserves a premium price, but most people don't want that. What they do want is 'good enough' and easy to use, perceived value is whats important to most people.

-CraZed-

#17

-CraZed- said:

Sony is a troubled company. I really hope that their One Sony campaign means that they will bring their pricing in line across the board as a lot of their stuff the pricing is just too high.
Sony is a victim of it's own R&D as well. They sink a LOT of money into R&D and yet other companies continue to beat them to market with similar and many times better tech. This is true for TVs, camcorders, cameras, phones etc. The only device I can even name that is cheaper than a competing device is the PS4. Plus they are always creating new stuff that never even makes it to market.
Lastly they are always trying to push proprietary tech on consumers again the one exception is the PS consoles. PS1 did CDs, PS2 did DVDs PS3 did BR but it also used common HDD and multiple flash memory cards etc. But for everything else they try t use their magic gate cards and the like and it stinks. The Vita for instance needs to open up to less expensive SD cards etc. for it to be more successful.
Not sure about any of their other devices but my Sony handicam only used mini DVD-rs and their expensive memory cards. Plus it was a PITA to transfer recorded movies to PC.
I just hope this year Sony gets their act together.

divinelite

#19

divinelite said:

@get2sammyb well Samsung, lg, and other companies, which is not apple always have multiple products for Smart phone

I want to upgrade my Lenovo s890 to Xperia C later tho

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