Despite the rumors surrounding Sony, the company announced on Thursday that it was not selling its picture business. The company struggled through a $1 billion writedown that was caused by the low demand for movies on disc. This ended up having Sony cut at least 11 percent of Sony’s yearly profit that estimated around 240 billion.
This percentage cut would not have affected the company so harshly had it not been for a few factors. One would be the weakness of the yen. The yen has recently been reported at its lowest in a while. The other factor that added to the severity of the cut was the demand for Sony’s image sensors by Chinese smartphone makers. The image sensor business has just recently been trying to get back on its feet from recent earthquake damage.
Yet the section that creates the image sensors, the semiconductor division, estimates a loss of around 19 billion yen in operations. That’s a relatively low number compared to the predicted 53 billion. Even though things weren’t ideal for Sony, the company holds hope of turning it around by making use of its existing movie characters and adding sales channels.
As far as its picture business goes, Sony deals with media, television programs, and other networks. Those aspects of the business were the underpinned against its electronics business which struggled against Asian rivals.
The business has more than enough potential to grow if it expands in countries like China. The movie business makes up a good 10 percent of Sony’s sales. However, it still seems that in the box office its movie studios still lag behind its rivals.
After receiving encouragement from a spin-off of its movie business, Sony sold a few of its movie assets. The electronics part of its business is also faring a bit better than before and bringing in profit. Kazuo Hirai, Chief Executive Officer, has made more a presence in Sony Entertainment which, in the future, could aid in the rise in sales.