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Last Updated: Wednesday, 28 January, 2004, 08:12 GMT
Sluggish PS2 dents Sony profits
Sony Playstation 2
The PS2 boom has come to a halt
Slow sales of games consoles and a poor performance at the cinema box office have battered profits at Japan's Sony.

The electronics and entertainment group has unveiled a 20% fall in operating profit, to 159bn yen (824m; $1.5bn) for the last quarter of 2003.

Although the firm boasted strong sales of DVD-related products, the gains were not enough to offset slumping shipments of Playstation 2 consoles.

PS2 sales fell 15% during the quarter, although full-year targets were hit.

Losing track

Sony, long the most successful of Japan's electronics exporters, has fallen on hard times over the past year.

Nobuyuki Idei
Nobuyuki Idei remains optimistic
Sales in its core consumer electronics division have been weak, at least in part because its products have been perceived as tired.

At the same time, it has invested heavily in entertainment and other non-core activities - money which some analysts say has been rashly spent.

Sony's movie division was its weakest performer during the fourth quarter: profits were down 82% and sales dropped 29% as the studio could not match last year's hit releases such as "Spiderman" and "Men in Black 2".

Over the same period, more focused electronics rivals such as Sharp and Matsushita - the firm behind the Panasonic brand - have performed strongly.

High hopes

Sony has, however, maintained a relatively optimistic forecast for this year as a whole.

Even as sales stagnate, the company will be boosted by the strength of the euro against the yen.

And some analysts said the results were better than they had feared.

A year ago, the company stunned investors, and sparked a general plunge in Japanese shares, after unveiling a surprise $1bn loss.

Sony chief executive Nobuyuki Idei now says the firm's revival is "progressing smoothly", and insists that new ranges of flat-screen TVs, DVD recorders and digital cameras promise to liven up its sluggish consumer electronics division.

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