Sony Pushes Profit Margin Target To 2013

Scribbled on November 19th, 2009 by Jonah Falcon
Filed in Industry News, Sony PSP, Sony PlayStation 3

Image courtesy GameSpot Things continue to look bleak for Sony, as CE Howard Stringer has pushed the company’s profit margin target of 5% to 2013.

This profit margin forecast has now been pushed back to March 2013. The maker of Bravia TVs and PlayStation game consoles said it would deliver on its promise to make its LCD TV and game operations profitable, launch 3D TVs and make a belated entry into lithium-ion batteries for electric vehicles.

Sony planned to cut 330 billion yen in costs this fiscal year, and has already carried out about 80 percent of the targetted reduction in the first half through September. Howard Stringer commented:

“We are better, we are leaner, we are faster. We have done some of the really difficult things, but the company still needs to be more efficient. We are not satisfied.”

Despite the boost in PlayStation 3 sales due to the September price cut, the PS3 has still sold less in 2009 than 2008, and while Microsoft is getting a huge injection of cash flow from Windows 7, Sony’s electronics income is still being stifled by the poor economy.

The other big question is the PlayStation 4. Launching a new console is extremely costly: the materials, the advertising, and so forth. If Sony doesn’t expect to have a 5% profit margin til 2013 – and is losing money now – when would a PS4 be able to be introduced?