Sony Profits Down 54% Despite Strong PlayStation Performance
Profit decrease comes as revenue drops by 7 percent.
Sony Corporation has revealed its financial results for the third quarter of fiscal year 2016/17, showing a decrease in profit of 54.3 percent year-on-year.
That's despite a strong performance from Sony's Game & Network Services division, which includes the PlayStation brand. G&NS recorded a 5.2 percent increase in sales to $5.325 billion for the three months ending December 31, 2016. Sony attributes the year-on-year increase to a rise in PS4 software sales and the contribution of PlayStation VR after its launch in October.
Meanwhile profits for the Game & Network Services division were up 24.5 percent, helped by "PS4 hardware cost reductions," says Sony.
Looking at Sony Corporation as a whole, the company recorded an operating income (more commonly known as profit) of $796 million, down from $1.80 billion for the same three-month period in 2015.
Revenue also dropped, but by a lesser amount. Sony's Q3 revenue stands at $20.668 billion for 2016, down 7.1 percent year-on-year.
Sony blames the revenue drop on "the impact of foreign exchange rates." The company claims that if you ignore those effects, "sales were essentially flat year-on-year, due to significant increases in Game & Network Services and Semiconductor segment sales." This was "substantially offset by a significant decrease in Mobile Communications segment sales," the investors' report continues.
The corporation attributes its profit decrease to "the $962 million impairment charge of goodwill recorded in the Pictures segment." An impairment charge of goodwill is generally defined as how much a company pays to acquire assets over those assets' actual value. The corporation previously said, "a majority of the goodwill that was impaired was originally recorded at the time of the acquisition of Columbia Pictures Entertainment, Inc. in 1989."
Rumors have circulated recently that Sony is looking to sell off its Pictures division. The corporation has said that its "commitment to Sony Pictures Entertainment remains unchanged," however (via Variety).
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