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Last Updated: Tuesday, 27 April, 2004, 10:09 GMT 11:09 UK
Sony hit by drop in games sales
Sony Playstation 2
Playstation 2 sales are falling
Japanese electronics giant Sony has reported a 23% drop in annual net profit, due to declining Playstation sales and heavy restructuring costs.

Over the past year, Sony recorded a net profit of 88.5bn yen compared with 115.5bn yen in 2002/2003.

Sony reported its slide in profits as tech firms Sharp and Canon both reported surging profits.

Sharp recorded an 86% rise in annual net profit while Canon's quarterly net profit rose 18%.

Playstation pressure

Sony's profits were primarily hit by a 168bn yen charge which the firm took to fund job cuts at its core electronics division.

In addition, its game division suffered a 40% profit decline in 2003/04 as demand for PlayStation 2 game consoles fell.

There are potential risks in foreign exchange, price competition and higher material costs
Takao Yuhara, Sony
Sony predicted the game unit's profits would fall further this year as PlayStation 2 demand continues to wane and as Sony funds development of its new hand-held game machine, PSP.

"We see digital cameras, flat-panel TVs and other digital goods remaining strong and boosting revenues, but there are potential risks in foreign exchange, price competition and higher material costs," Sony's chief financial officer, Takao Yuhara told correspondents.

Televisions and other electronic goods accounted for nearly a quarter of Japan's 54 trillion yen worth of exports in 2003.

Booming sales

While Sony was unveiling a decline in profits, other tech firms were reporting better fortunes.

Sharp said high demand for flat-screen TVs boosted profits, which rose to 60.7bn yen for the period covering the past 12 months, from 32.6bn in 2002/2003.

The Osaka-based company predicted bumper profits for the next year.

TV displays
Demand for plasma screens is high
Meanwhile, Canon said booming sales in digital cameras and multi-function network copiers had contributed to its healthy profits.

Seiko Epson, Canon's competitor in the ink jet printers market, also posted an upbeat earnings report.

It said its net profit more than tripled in the latest business year on brisk demand for liquid crystal displays (LCDs) used in mobile phones.

Xerox last week had posted better than anticipated quarterly earnings on strong sales of copiers and printers, although its profit margins dropped due to price competition.

PlayStation 'wins next gen wars'
09 Mar 04  |  Technology
Sluggish PS2 dents Sony profits
28 Jan 04  |  Business
Sony forced to clip PSX's wings
05 Dec 03  |  Technology
How Sony lost its way
28 Oct 03  |  Business
Sony plans massive job cuts
28 Oct 03  |  Business
PlayStation fights falling sales
24 Jul 03  |  Technology

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