We saw Sony (NYSE: SNE) slash its full-year forecast earlier this month, and here's the detail on why. Fiscal Q2 profit nosedived 71.8 percent to 20.8 billion yen ($213.72 million) in the three months to September 30, as the financial services unit lost 40 billion yen ($385 million) in Tokyo's falling stock market. Operating income was down 90.1 percent to 11 billion yen ($113 million), though in fairness was flattered last year by a 60.7 billion yen ($623 million) premises sale.
-- Movies: Sony Pictures is to keep a tighter hold of its Crackle video site. Mobile entertainment head Eric Berger's remit is being extended to the former Grouper, replacing Jonathan Shambroom, who only took Crackle's top spot in February. "What we want to do with Crackle is make it a next-generation TV network," Berger told Reuters. Crackle will be moved from San Francisco down to Sony's Culver City HQ and folded more closely in to the studio. The changes will come with redundancies though some staff will move, Reuters reports, as Sony positions Crackle at young men and plans five original series productions per quarter.
-- Electronics: Ups and downs - Bravia TVs and Vaio laptops shifted more units but Vaio profitability dipped while Handycam and Cybershot digicam profits sank on what Sony says is a "slowing market growth and price decline". Electronics sales were marginally down 0.6 percent to $16.9 billion, also partly thanks to smaller contributions from Sony Ericsson; operating income down 40.5 percent to 75.6 billion yen ($776 million).
-- Sony Ericsson: The mobile JV saw sales dip 10 percent to 2.8 billion ($3.5 billion) on currency fluctuations and cheaper competition, recording a 13 million euro ($16 million) pre-tax loss.
-- Games: The brightest light for Sony - PS3 and PSP sales, finally picking up, saw gaming income up 10.3 percent. But owners of these new machine are not yet buying enough games - game software sales dipped thanks to the contracting PS2 market. Sony still isn't making a profit after the hefty PS3 investment, but the operating loss eased vastly thanks to the take-up.
-- Music: Sony BMG losses ballooned from $8 million to $57 million "due to the timing of new releases combined with the continued decline in the worldwide physical music market not being offset by growth in digital product sales". Sony reckons buying out Bertelsmann's half of the JV will cost $600 million.
Sony now forecasts full-year profit by next March 31 to come in 59 billion yen ($607 million) lower than last year at 150 billion yen ($1.54 billion).
By Robert Andrews