Sony CFO Masaru Kato

It seems Sony’s efforts to drive profitable excellence are finally paying off. The company posted a profit increase of ¥230.1 billion ($2.44 billion), and when compared to last year’s ¥67.3 billion ($677 million), the difference is quite astonishing to say the least. Sony’s net income was ¥42.8 billion ($436 million), and this comes after a rough previous fiscal year. It seems like Kaz Hirai’s efforts of reinforcing, cost-cutting, and restructuring the company during his first year as President and CEO have been successful.

Selling its US offices as well as acquiring Gakai added to Sony’s profit margin, in spite of their gaming department sales being down 12.2% in Japan. Much of the income from this segment was also down 94% ($18 million), and sales overseas were also down by 22.5%. In spite of these losses, it’s the first time the global conglomerate has reported a significant profit since 2008.

Sony reports the PlayStation 4 to be more profitable than the PlayStation 3, primarily thanks to less research and development this time around. At an earnings call today Sony CFO Masaru Kato [pictured above] admitted

Unlike PS3, we are not planning a major loss to be incurred with the launch of PS4.

At the time we developed PS3, we made a lot of in-house investments to develop the chip, the Cell chip. Development of the chip saw the silicon processing and all the facilities invested by us ourselves. But this time, yes we have a team working on chip development, but we already have existing technology to incorporate and also product investment and all the facilities will now be invested by our partners, other foundries, so we don’t have to make all the investment in-house.

Kato also stated that Sony expects sales to steadily increase as a result of the company’s newest gaming machine PlayStation 4. However, R&D and marketing expenses on the new console will cause operating income to be “essentially flat year-on-year.”

Sony is predicting sales of up to 10 million for its current generation console; a solid figure considering they have removed PS2 sales from their forecast. Sony foresees success for its home consoles, whereas only a combined 5 million units to be sold for its PS Vita and PSP handhelds.

Source: Sony, Eurogamer

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