During the 1990s, Sony transformed itself from electronics manufacturer to global entertainment company, establishing a leading position in music, movies and computer gaming. But those new ventures distracted attention from the company's core business, which struggled to maintain its prominence in a rapidly changing marketplace. Sony invented the concept of portable personal music players and dominated that sector for almost 20 years before its lead was snatched away, virtually overnight, by Apple's iPod. At the same time Samsung and LG usurped Sony's position in televisions and home entertainment appliances, myriad mobile phone manufacturers eviscerated Sony's digital cameras and camcorders, and Microsoft's Xbox and Nintendo's Wii slashed the profitability of PlayStation. A series of restructurings failed to restore Sony's lead, although at least the broad spread of operating businesses allows the company to offset poor performance in one division, usually a different business each year, with gains in another. For the past decade, the group's most consistently profitable division has not in fact been any of its electronics or content subsidiaries, but its substantial financial services arm, which offers insurance and banking services in Japan. But not even that business could offset woes elsewhere and in 2015 the group reported its sixth net loss in seven years. It was finally back in the black for ye 2016, and then reported record profits in ye 2018 of approx $4.4bn on revenues of approx $77.1bn. Sony Financial Holdings is still its most profitable division. The Game & Network Services unit - primarily Playstation - is its biggest, accounting for 22% of revenues. The once mighty Home Entertainment & Sound business (which houses consumer TVs and audio equipment) generated around 14% of topline, as did Sony Financial. The group's turnaround was led by CEO Kazuo Hirai, former head of the Playstation business. He stepped down in 2018 (though he remains chairman), handing over to Kenichiro Yoshida.
Capsule checked 19th March 2019
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Historical profile information for Sony
Adbrands Weekly Update 3rd May 2018: Sony is back with a bang after a prolonged and difficult turnaround. For its year ending March, the company reported the highest operating profit in its 70-year history, while net profit soared almost sevenfold to the equivalent of $4.4bn on the back of revenues up 12% to around $77.1bn. Currencies helped considerably, but underlying performance was also up strongly. All the group's operating divisions except smartphones reported double-digit percentage increases in revenues and high-single or double-digit growth in profits. The group's biggest business by far remains Game & Network Services, dominated by the PS4 console and its accompanying gaming and streaming network. Revenues set a new record of around $17.5bn, up 17% on the preceding year. There was also exceptional performance from Sony Music, where revenues were up by almost a quarter to around $7.2bn as a result of downloads and streaming services. The traditional consumer electronics division, now categorised as Home Entertainment & Sound, also delivered a strong recovery with revenues up 18% to $11.0bn.
Adbrands Weekly Update 8th Feb 2018: Sony CEO Kazuo Hirai announced that he will step down at the end of the company's current financial year in April, following a successful six-year turnaround that is expected to end with a record profit projected to top $4bn. "I have been running during the past six years with full force," he said, "and as Sony is going into the next stage, I thought it would be best for me and the company that I pass the baton now." He will be succeeded from April by Kenichiro Yoshida, currently CFO.
Adbrands Weekly Update 5th May 2016: Sony reported an annual profit for virtually the first time since 2008, helped by exceptional performance from its PlayStation gaming division, as well as improved profitability from cameras and other imaging products and even Sony Music. There was also a strong recovery from the hitherto ailing TV and home entertainment business. However, the smartphone business and Sony's components division both reported operating losses. The latter was hit hard by a plunge in demand and prices for smartphone image sensors, of which Sony is the leading global supplier. Full year revenues were down around 1% to Y8.1 trillion - around $68bn at annual exchange rates for the year - but the prior year's Y126bn loss turned into a Y148bn ($1.2bn) net profit. Playstation became Sony's single biggest business, accounting for revenues of around $12.3bn, overtaking mobile communications on around $10bn and home entertainment & sound on $9.6bn. However Sony's most profitable division by far remains financial services, which still contributes close to 40% of the group's combined operating profits.
Adbrands Weekly Update 4th Feb 2016: Mediacom is the big winner, and Carat the main loser, in the global Sony media review, currently drawing to a close. Precise details have yet to be formally confirmed but initial reports indicate that Mediacom has captured consolidated global duties for Sony Mobile and Sony Playstation, as well as Sony Electronics outside North America. It's unconfirmed yet whether UM will keep the account inside North America. However the Interpublic agency has retained Sony Pictures in the Americas. OMD has won Asia Pacific, to add to its existing EMEA role, and is also keeping Sony Music internationally. The Playstation account was previously shared globally with OMD and Carat. So far, Carat has come away empty handed from the review.
Adbrands Weekly Update 17th Sep 2015: Ads of the Week: "Made For Bond". Sony gets the party started in anticipation of SPECTRE - the new Bond movie - with a cool spot for its cameras and smartphones, featuring the movie's co-star Naomie "Moneypenny" Harris. Which agency? "The name is DDB... Adam&Eve DDB."
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