Sony Suffers Huge Loss Thanks to Video Game Blunders

It was revealed on Thursday that Sony

posted a huge $5.6 billion annual loss, a company record not helped at all by the economic crisis that, in truth, every company of a similar nature has had to deal with, as well as the earthquake and tsunami that devastated much of Japan and the floods in Thailand. There can be no doubt about the fact that it has been an extremely difficult 12 months for Sony and, as a result, the electronics giant has seen revenue fall 9.6% to $79.2 billion in the fiscal year that ended with March. Those numbers are down from $87.8 billion in 2011. And the numbers just keep getting worse for Sony, who lost $5.6 billion, or $5.55 per share, which is nearly twice the previous year's loss of $3.2 billion. The company can scramble around for the right words to say that will appease or at least slightly calm investors, analysts and shareholders, but the fact is that a $5.6 billion annual loss is going to sting. There isn't a company in the world who wouldn't feel that loss, at least slightly. The blame can partially be placed at the feet of an 18.5% decline in the sales of LCD TVs, digital cameras, personal computers and PlayStation games machines, which together make up roughly half of Sony's total business. Sony has made a string of errors with its gaming systems losing money all across the board on the Playstation 3, the PSP Go, and the PS Vita. The aforementioned Thailand floods left factories closed for weeks, which meant that the manufacture of digital cameras slumped, as did sales as a result. That meant that the company lost sales of $170 million according to Sony, while repairs to the facilities cost an additional $160 million. Again, those sort of numbers would hurt anyone. If there is a bright side, it came from SNE's movie business which posted an operating profit of $416 million on $8 billion in sales. That came from the TV business, video-on-demand sales, and royalties from merchandise for the forthcoming

movie. No such luck for the music business, which saw a 6% drop in sales to $5.4 billion from $5.7 billion the previous year, with CD sales continuing to decline. CEO Kazuo Kirai said in a statement that, "Sony will change." It will have to.