Sony Corp. (NYSE:SNEC) will announce fiscal 2016 earnings after the market closes Friday. Last week the company said it expected net profit of $665 million for the 12 months ended March 31, down from year-earlier profit of $1.3 billion.
Sony said it anticipates revenue of $6.8 billion compared to $7.3 billion a year ago. For the current fiscal year, the company has targeted operating profit of more than $4.5 billion.
PlayStation Is Peaking
According to analysts, Sony’s PlayStation 4, which came out in 2013 is at or near its peak. Nintendo’s recent release of a new console and Microsoft Corp. (NASDAQ:MSFTB) getting ready for new gear points to attention on Sony to maintain demand for PlayStation 4. The game is Sony’s gateway to sales of many of its online services.
Sony’s virtual-reality headset – PlayStation VR is also getting a lot of attention, especially since customers are having a hard time finding the device in stores.
A Push For HDR
High dynamic range video is the next big thing in TV and cinema and Sony wants to make sure content creators have everything they need to offer HDR to consumers. Along with HDR, the video industry is also developing 4K with 3,840x2,160 pixels versus high end HD’s 1,920x1,080 pixels.
The televisions are becoming more common. What’s needed is more content. To that end Sony is taking a two-pronged approach for content creators – lower budget and higher end. For low-budget operations the company has its compact FS5 cinema camera and Z150 camcorder.
At the higher end of the spectrum Sony recently unveiled a new video file format called X-OCN. It’s available for the F55 cinema camera and offers significant space savings over RAW and even pro formats like Apple Inc.’s (NASDAQ:AAPLC) Apple ProRes.
Thinking Big While Staying Small
Meanwhile something that’s been going on in the gaming segment may soon become a blueprint for other areas for companies like Sony. It a new system of staffing that has a small cadre of regular employees doing ongoing tasks while outside labor is hired on an as-needed basis to develop new blockbuster games.
Outsourcing is a growing phenomenon in industry and Sony is no exception. The technique allows for “just-in-time” production that saves money and manpower. Outsourcing allows studios to make large games while staying small. This according to Anton Wiegert, head of outsourcing at Guerrilla Games, owned by Sony. Auditing and consulting firm, PricewaterhouseCoopers LLP reported that last year revenue from videogames hit $75 billion which was twice the worldwide sales from movie tickets.