Sony shoots for $10 billion in Blu-ray sales by 2011
Games division may return to profitability
By Danny King -- Video Business, 6/26/2008
JUNE 26 | Sony said it expects its Blu-ray Disc-related business to approach $10 billion in annual revenue within three years, while returning its games and liquid-crystal display TV operations to profitability.
The company’s goal is to add Blu-ray-related operations to its portfolio of “trillion yen businesses” ($9.27 billion), which include LCD TVs, gaming and mobile phones, by the fiscal year ending March 31, 2011, Sony said in a statement this morning. Sony also said its personal computer and semiconductor businesses would reach this threshold.
"We are very pleased with the cross-divisional cooperation that led the success of the Blu-ray format," Sony chairman and CEO Howard Stringer said on a conference call this morning. He estimated that 15 million Blu-ray players and PlayStation 3 game consoles, which include the players, have been sold worldwide. "Blu-ray Disc has positive implications for our hardware, software and game business."
Studios and entertainment analysts have predicted that Blu-ray sales would more than triple this year to about $1 billion largely because Toshiba discontinued its competing HD DVD format in February, spelling an end to the so-called “format war.” The Entertainment Merchants Assn. said this week that Blu-ray revenue would surge to about $9.5 billion in 2012, overtaking sales of standard-definition discs in the process.
Sony earlier this month said its electronics division’s operating income for the year ended March 31 more than doubled to 356 billion yen ($3.3 billion) as electronics sales rose 8.9% to 6.61 trillion yen ($61.3 billion). The company didn’t break out Blu-ray-related sales or earnings.
The company also said its games unit will be profitable for the fiscal year ending March 31, 2009, because of a wider range of titles and reduced production costs for its PlayStation 3 games console. For the most recent fiscal year, Sony’s games unit had an operating loss of 124.5 billion yen ($1.15 billion) despite a 26% jump in sales.
Additionally, Sony expects its liquid-crystal-display TV business to be the world’s largest within three years. For the first quarter, Sony’s 13% market share trailed only Samsung’s 20% among global LCD TV units, though in North America, the company was leapfrogged by closely held Vizio.
"Three years ago, we had no significant presence in the LCD TV business," said Stringer. "Today, we are competing well for first place for worldwide market share due to the strength of our Bravia lineup."
Finally, the company said 90% of its electronics categories would be both network-connectable and wireless-enabled in an attempt to capitalize on its leadership position in LCD TVs, high-definition DVD players and game consoles.
