Sony Plans $250 Million Costs Cut After Large Operating Loss In Second Quarter
According to Bloomberg, Sony will try to cut back $250 million from its entertainment sector over the next two years.
Regardless, the company will try to keep ownership of all its assets, so no one needs to fear Sony suddenly selling off the Playstation brand.
Money is currently planned to take a hit in Sony’s owned Columbia Pictures. Its movie firm will produce fewer films, dropping from 23 movies made last year to 18 for this year. Still, it does have a pipeline set for upcoming movies. Their third Spider-Man movie will release in 2016, with an automatic fourth pegged for 2018.
Furthermore, the movie business will cut costs by lowering its marketing stake. Sony also wants talent to negotiate offers that include payment with rewards for success, according to co-chairman of Columbia Pictures Amy Pascal. “If we don’t make money, they don’t make money,” Pascal mentioned.
Instead, money will be shifted to the company’s more successful TV productions and media networks. With 127 channels, Sony can reach 950 million subscribers in over 150 countries, according to Steve Mosko of the company’s television department.
Shows like Breaking Bad are listed as one of their major draws. To cut costs here, the company will sell its stake in countries that perform with less growth than others.
Daniel Loeb , the largest investor for Sony, believes that it would be best for them to sell off a few assets, splitting its entertainment from its products. Sony CEO Kazuo Hirai believes that his plan to keep all ventures unified can still work, stating:
I know that the whole of Sony is greater than the sum of its parts. Sony Entertainment is a core part of Sony and is crucial to our future growth.
Despite an operating loss of $181 million in the second quarter, stocks for the company have nearly doubled this year. Hirai gives examples for unified successes, pointing out that Blu-ray technology has become a household standard. The Playstation 4 has sold a record-breaking 1 million units in just 24 hours of its launch, so there’s definitely hope.