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Thursday, 2nd February 2012
In Business In Japan,

Sony Corporation announces stinging Q3 losses

One of Japan's leading consumer electronics companies slumped to a 159 billion yen (£1.3 billion) loss in the third financial quarter of 2011.

Sony, whose products are used around the world, reported a 17.4 per cent reduction in revenues compared to the same three-month period a year earlier.

Although sales of its popular PlayStation 3 hardware and software actually rose, its Consumer Products and Services division – including Sony Computer Entertainment – saw revenues slump by 24.4 per cent, resulting in losses of £695 million.

This was attributed primarily to poor sales of its LCD television units due to the global economic situation and strong competition, as well as the recent flooding in Thailand, which caused disruptions to the supply of components to many of Asia's largest electronics companies.

Sony also highlighted unfavourable exchange rates, with the strong yen continuing to exact a high toll on companies from the country who export a significant amount of their merchandise to Europe and the US.

On a more positive note, Sony announced that it had sold 6.5 million units in the three months, which was an increase of 200,000 and brought total global sales for the console up to 66.2 million, an increase of 13 per cent compared to last year.

The news comes as Sir Howard Stringer, president, chief executive and chairman of Sony Corporation, plans to step down on April 1st.

Kaz Hirai, his appointed successor, has promised to cut costs and improve efficiency across a company that has been mired by project delays and duplicated efforts across different departments in recent years.

Upon the publication of the financial report, he said that user experience would help turn things around for Sony rather than hardware.

"We can't just continue to be a great purveyor of hardware products even though some people expect us to do that," he said.

Written by Mark Smith