It’s been roughly three years since Sony went through some really rough times. There were massive layoffs, consolidations and overall general upheaval throughout the entire company. The company was beginning to look like it was destined to end up in full blown bankruptcy but the top brass had a viable plan and turned it around big time and a lot of that success is owed to the gaming sector, specifically Playstation.
Back in 2014, Sony (NYSE:SNE) unveiled its reorganization plan, which included sale of a number of its assets, spinning off its businesses, laying off staff, and focusing on increasing profitability of its major divisions. Since that time, the company with its CEO Kaz Hirai achieved extraordinary results, as the stock more than doubled, and revenue started to grow.
In the latest quarter, Sony finally had a positive operating income of $843 million and a net income of $250 million. As expected, game & network services division was one of the best performers during the fiscal quarter and improved its sales by 21%. And, as the G&NS division continues to be one of the biggest drivers of Sony’s growth, it’s important to understand how the company plans to use it to improve its overall business performance.
The G&NS division mostly consists of products from the PlayStation family like PlayStation 4, PlayStation 4 Pro, VR, and others. And, as the gaming industry continues to increase in value and is predicted to grow at ~6% annually, Sony has a real chance to establish even a stronger foothold there and continue to dominate the hardware sector of a console market.
Recently, Sony announced two major news. First was about the sales of PlayStation 4 and PlayStation 4 Pro that together reached 60 million units shipped worldwide. This is an important milestone for the company, which released its first 8th generation console only a few years back in 2013, and considering the current rate of growth, the management believes that it can sell another 18 million units by April 2018, which is going to make the company an even more attractive investment.
The second news was about the sales of PlayStation VR that reached 1 million units shipped worldwide in only half a year since its launch. Considering that virtual technology is still a novelty in today’s world, the fact that Sony successfully tested it and sold in such a great amount for entertainment purposes shows us that there’s a big demand for innovation in this space, and Sony should use this fact in its favor going forward.
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