The global recession has hit Sony hard--the company on Thursday reported its first annual loss in 14 years.
Sony lost 165 billion yen ($1.72 billion) in the quarter that ended March 31, the fourth quarter of its fiscal year, compared with net income of 29 billion yen in the year-ago period. Revenue for the three-month period was 1.5 trillion yen ($15.5 billion), a drop of 22 percent from a year earlier.
Adding that to the previous three quarters of fiscal 2008, the company saw an annual loss of 98.9 billion yen ($1 billion). The loss was a dramatic reversal from the preceding fiscal year, when Sony earned 369.4 billion yen. The company blamed the decline on lower sales, increased competition, the stronger value of the yen, and the sluggish Japanese stock market. Annual revenue dropped 13 percent to 7.73 trillion yen ($78.8 billion).
The downturn is forcing Sony to cut costs and staff. The company plans to shut down three manufacturing plants in Japan, reducing the number of worldwide plants from 57 to 49. Sony says it is on track to eliminate 8,000 jobs by year's end, mostly through forced retirement. The company now hopes to reduce costs by 300 billion yen for the year ahead
Despite these steps, Sony said it doesn't expect a recovery anytime soon and is projecting a 120 billion yen ($1.2 billion) loss for the fiscal year through March 2010.
Since taking over as Sony CEO, Howard Stringer has been on the move to cut costs, reorganize, and shake up the company's status quo.
Sony's business segments each saw a sales drop. In the gaming arena, revenue from the various PlayStation game consoles sunk 18 percent in the face of competition from the Nintendo Wii and DS and Microsoft's Xbox 360.
Revenue in the electronics business declined 17 percent. Sales were actually up for Sony's Bravia HDTVs, but down for camcorders, digital cameras, and PCs.
On the entertainment side, sales dropped 16.4 percent. Motion picture and TV revenues grew but were offset by a slide in the home video market.
Corrected at 11:10 p.m.: Amazon customers do not need to purchase the Sony Bravia TV before accessing the new Video on Demand download store.
Fresh from a failed attempt at online video, Amazon is giving it another go.
Amazon is opening a streaming video store, called Amazon Video On Demand, that will offer 40,000 movies and TV shows for download and rental to people's computers, according to a story that appeared Wednesday evening in The New York Times. The service will be made available to a limited number of invited Amazon customers initially and will be made more broadly available later this summer.
However, in another part of Amazon's strategy, the retailer signed a deal to include the service in Sony Bravia high-definition Television sets. To access the movies on their Bravia TVs, users must purchase a $300 Bravia Internet Video link, the Times reported. Brad Stone, who wrote the story, noted that this "was an awkward extra expense, for now."
Future Bravias are expected to have the video link built into the TVs, The Times wrote.
Amazon is looking to cut similar deals with other TV manufacturers and set-top box makers, according to the story.
Amazon faces competition from Roku, the company that makes the Netflix Player, which streams movies from the Web to an owner's TV set and costs $100. The box has been applauded by reviewers and fans alike.
In addition to Netflix, Amazon must compete with Apple, Microsoft and a host of smaller players that are trying to enable consumers to stream video to their TVs.
Seattle-based Amazon has already misfired with it's Unbox download store. In that situation, critics said the service was a bust because it required users to download a separate software application.
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