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Outlook is negative for Sony and PlayStation

by William Schwartz on February 9, 2012

    PS3 Controller 2

    The Standard & Poors ratings agency has downgraded Sony’s corporate credit and debt ratings due to cut-throat competition and falling demand for the company’s products in their core businesses.  ”The outlook is negative,” according to S&P.  The well regarded ratings agency sees a strong recovery for the company highly unlikely, and has warned that further downgrades could be looming for the electronics giant.

    If you’re wondering how this effects Sony, these credit ratings play a large part in how Sony finances its projects.  Whether that be new technology in televisions, consoles, or any of the other wide stable of products that Sony offers.  It makes borrowing money for the company, much harder.  With less investors interested in the corporate debt of the company because of the inherent risk associated with buying their corporate bonds, a downgrade makes life harder for the company in an already difficult economic environment.

    The company recently appointed Kaz Hirai to head up the company as the CEO.  Hirai affirms that there are many problems facing the electronics powerhouse.

    “I have a very strong sense of crisis about the environment surrounding us,” Hirai said at a recent news conference.  ”We cannot be afraid to make painful choices for the future of Sony.  Our rivals and the operating environment won’t wait for us,” he told reporters.

    Hirai is known for his ability to right the ship.  He turned around an ailing PlayStation business, implementing cost cutting measures that put the division within Sony back on the track to profitability.

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