Sony warns of income drop as demand for disc-based media evaporates
The Japanese tech giant has offered a revised earnings statement, blaming a costly exit from the PC business and diminishing demand for disc-based media.
Sony is warning of heavy cash losses, saying that its withdrawal from the PC business and a shrinking demand for disc-based media has hit the company's coffers.
Sony, which invented such iconic tech products as the Walkman and the PlayStation, has struggled recently in the face of stiff competition from the likes of Apple and Samsung, in February revealing it would sell its Vaio PC business.
The latest financial statement is a revision of Sony's February earnings forecast. Back then the company predicted it would rake in an operating income of ¥80 billion (roughly $783 million) over the financial year, but now expects to collect just ¥26 billion (about $255 million).
Sony blames the expected cash dip on two things. Firstly, on "additional expenses" incurred in ditching the PC business, and secondly on charges related to its disc-making business, which Sony says is facing rapidly diminishing demand, particularly in Europe.
"Primarily due to demand for physical media contracting faster than anticipated, mainly in the European region, the future profitability of the disc manufacturing business has been revised," Sony's statement reads.
With the rise of on-demand streaming video from services such as iTunes, and subscription companies like Netflix, Sony's DVD and Blu-ray manufacturing business is facing obsoletion. Sony will unveil its actual earnings for the fiscal year on 14 May.
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