As we’d reported earlier, Sony is taking a massive hit in profits for the 2013 fiscal year that ended in March. Between continued slumping TV sales, slowdown in consumer interest in compact cameras, and the sale of VAIO, the company’s PC division has resulted in another year that the company failed to be profitable. This isn’t the first time a Sony CEO has promised to see the company turn to profits, only to face massive losses. 2014 will likely be no different with the company already forecasting a 50 billion yen loss, but 2015? Kaz Hirai seems to think that it’s the year the company will turn profitable again.

Kaz Hirai:

 We must acknowledge that our steps to take action had come much too slowly. We are going to fully complete our structural reforms. 

Under his watch, Sony has cut over 10,000 employees, spun off their TV division, and shut down factories in order to cut costs. In fact, Sony has even sold nearly all of their headquarters, opting to lease to in order to liquidate cash for the company. So how does Sony plan on returning to profits? The company hopes that consumer interest will begin to grow more rapidly in 4K, an area where Sony leads with an impressive line of televisions and even consumer camcorder. Image sensors will be another core part of Sony’s growth as the company continues to expand its high end lineup of mirror cameras. Sony is also taking its image sensor technology and applying it to the medical field where their sensors are used in different X-ray and related machines.

Beyond its core technology divisions, Sony is also heavily leaning towards its gaming and entertainment division. The PlayStation 4 continues to lead the next gen (now current gen) in sales and Sony believes their console is already profitable. Sony Pictures has also been a big boost to Sony, thanks to the Spider-Man franchise.  Released three weeks ago, The Amazing Spider-Man 2 has already made $640 million.

Despite heavy losses, it’s worth putting into context that while Sony’s troubles still run deep, the company is in a much healthier state that it was prior to Kaz Hirai taking over. While job cutting is never an easy decision for management and makes for an ugly headline, Sony has been able to reduce its employee count greatly, helping bring the company’s costs down. Under Hirai, Sony has also been more aggressive with mobile where the company has enjoyed year over year gains with their Xperia smartphones.

So will Sony turn profitable in 2014? It’s certainly hard to say. This isn’t the first time or the fifth time the company has made such claims, only to report massive losses. In fact, 2013 was looking to be a stellar year for Sony as reported by them and seemed from the outside, and we all know how that turned out to be. If Sony can continue to forge partnerships with its Xperia brand (which barely exists in key territories like North America and growing markets like China and India), gain traction with its 4K initiatives, and continue to be aggressive with PlayStation and camera division, then they have a real shot at not only stabilizing, but turning profitable in a meaningful way that isn’t based on just cuts, but actual consumer interest in their product range.

Once again, Kaz Hirai:

 That Sony spirit remains part of our unchanging DNA. But we must not be afraid to change what needs to be changed. 

Discuss:

Do you think Sony can turn a profit in 2015?

[Via JapanToday]