Sony takes £1bn hit on movie division
Sony has said it will take a 112bn yen ($1bn) writedown in its movie business after reviewing the future profitability of its operations.
The company said it would book the charge in the fiscal third quarter and is examining how that will affect its forecasts. To offset part of the loss, it also said it would sell shares in the medical web service M3 Inc to Goldman Sachs's Japan unit.
The announcement comes two weeks after Sony said ceo of Sony Entertainment, Michael Lynton, is stepping down after a 13-year run. The studio has struggled recently, including with last year's Ghostbusters sequel and a movie based on the Angry Birds video game. Sony warned in June the division was at a risk of posting more losses.
"There has been a suspicion in the market that Sony doesn't have a firm grip on the movie business, but still the amount is a surprise," said Kazunori Ito, an analyst at Morningstar Investment Services.
Shares closed little changed in Tokyo prior to the announcement. Shares listed in Germany fell 2.6pc after the statement was published.
"The decline in the DVD and Blu-ray market was faster than we anticipated," Takashi Iida, a Sony spokesman said.
The Tokyo-based firm is increasingly relying on its video games business, which generated twice as much income in the last fiscal year as film. Sony's PlayStation 4 console is outselling Xbox One, its closest rival, by about two-to-one, according to industry website VGChartz. (Bloomberg)