Sony
Sony

Sony Confirms Significant Losses Due to COVID-19

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Sony has released their consolidated financial result for the fiscal year that ended on March 31, 2020. There are three important news that raise eyebrows in the official statement to investors. Perhaps the most important statement for fans is Sony’s confirmation of the launch of the PlayStation 5 on holidays.

Regarding the launch of PlayStation 5, although factors such as employees working from home and restrictions on international travel have presented some challenges in regards to part of the testing process and the qualification of production lines, development is progressing with the launch of the console scheduled for the 2020 holiday season. At this point in time major problems have not arisen in the game software development pipeline for Sony’s own first-party studios or its partners’ studios.

While the company shares that good news, is also alarming the decline in sales of hardware and software due to COVID-19. The world is still adapting to the pandemic, situation is unique on each location of the planet. Is intriguing that Sony reports such alarming numbers at the beginning of a situation that could last at least another year.

Sony reports that the conditions of Sony’s manufacturing plants has been severely hit by COVID-19, the company counts with four plants in China , two located in Shangai, the other two are in Jiangsu and Huizhou. Those plants were closed in accordance to government mandates from January 24 until February 9. While the plants are still working, there are problems in the supply chain, and operations are slowly recovering to the efficiency they had before the spread of the virus. As it was previously reported, executives had find a hard time to attend meetings, engineers were unable to be present at manufacturing plants in order to impart key directives for the critical process of manufacture, Sony confirms.

Business has been impacted by factors such as restrictions on the movement of people across national borders, making it difficult for Sony to send engineers to manufacturing hubs such as China and countries in Southeast Asia for the purpose of helping with new product launches or giving instructions on manufacturing.

In the category Game & Network Services Results for the fiscal year ended March 31, 2020, Sony reports a decline in sales of 333.3 billion yen (14%) year-on-year to 1 trillion 977.6 billion yen (a 12% decrease on a constant currency basis). The company makes clear that this “significant decrease was primarily due to a decrease in PlayStation 4  hardware sales and game software sales, as well as the impact of foreign exchange rates, partially offset by an increase in sales for PlayStation Plus.”

On a more positive note, the PlayStation 4 is getting closer, in terms of consoles sold, to it’s predecessor the PlayStation 2. Shipping an astonishing 110.4 million units, the current gen of PlayStation lies 45 million unit away for becoming the best-selling console. While there is still a long way to go, the PlayStation 4 Pro will remain to be a very capable gaming system and will only be limited by Sony’s intention of whether support the console or not.

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