'Crippled' Sony faces £2bn loss

Sony is warning its shareholders that a predicted quarterly profit has turned into a projected ¥260bn (£1.97bn) loss, following the earthquake in Japan and the fall-out from its recent hack attack.
The majority of the losses come from a ¥360bn non-cash charge the company has allowed against tax assets due primarily to lost income attributed to the disaster and its effects on the industry.
Sony estimates that the earthquake has lowered sales by ¥22bn and operating income by ¥17bn for the fiscal year ending March 2011, and that the firm will lose ¥150bn in total operating income for the fiscal year ending March 2012.
Meanwhile, the cost of the PlayStation Network data breach is expected to reach ¥14bn (£106m) after new security protection, user support, cost discounts and legal bills.
One analyst said: “Sony infighting and bad decision making crippled the company so it lost critical markets to Apple, Nintendo, Microsoft and Samsung, leaving the once dominant consumer electronics company a shell of its former self. The organisational structure and leadership in Sony isn’t working. It desperately needs someone with a strong turnaround skill-set and the authority to fix the company, otherwise it is likely to continue to slide in the wrong direction.”