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Sony looks to PlayStation to revive fortunes, could ditch smartphones

Sony looks to PlayStation to revive fortunes, could ditch smartphones

Sony continues to spin off struggling divisions, including its video and audio business

Sony will invest more money in the PlayStation as it fights to return to a profit, and could reportedly exit from selling smartphones and TVs.

Sony will pump extra cash into its games and network services division in a bid to attract more users to the PlayStation and its PlayStation Network of online games. The company has sold 18.5 million PlayStation 4s since they went on sale in late 2013, of which 4.1 million were sold in the 2014 holiday season.

Sony will also provide more funding for the division that makes image sensors for devices including the iPhone 6. That cash will go towards researching new technologies and increasing production.

It's part of a wider set of changes underway at Sony, which has already sold off its Vaio PC business and is showing less and less interest in hardware. Along with the gaming and imaging divisions, it sees its biggest growth drivers as movies, music and TV production.

Sony announced a turnaround plan on Wednesday aimed at producing ¥500 billion (US$4.2 billion) in profit by 2017. It will invest in divisions that can boost its bottom line and get rid of businesses that aren't as profitable. The electronics and entertainment giant has suffered a string of loses recently, including a ¥128 billion loss for its last fiscal year.

Sony will also spin off its video-and-audio business into a wholly owned subsidiary, the same strategy it used last year for TVs. Separating the businesses allows them to focus on turning a profit.

Other business will be split from the parent company, Sony said, but it didn't provide details.

For now, Sony is keeping its mobile communications segment, which will post a loss of ¥215 billion for the year to March 31 and see 2,100 jobs cut. But according to news reports, CEO Kazuo Hirai isn't ruling out an "exit strategy" for phones and TVs, markets that Sony described as volatile and competitive.

Image sensors and the PlayStation helped Sony lower its predicted loss for this fiscal year. In its most recent earnings report,, the company forecast a loss of ¥170 billion for the year, down from the ¥230 billion loss it predicted in October.

Sony will give its music division more money to explore streaming services. In January, it ended its own streaming service and partnered with Spotify to develop a new offering called PlayStation Music. That service allows PlayStation users to stream music while playing games.

Fred O'Connor writes about IT careers and health IT for The IDG News Service. Follow Fred on Twitter at @fredjoconnor. Fred's e-mail address is fred_o'connor@idg.com


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