In an effort to cut costs, Sony has announced they are selling their entire stake of video game company Square Enix. The message was delivered yesterday on a very short press release written in Japanese and doesn’t delve into any details. Sony had been an investor in the video game developer since the early 2000s and owned 8.2 percent of the company.
The sale involves 9.5 million shares valued at $156 million. Sony is expected to profit around $47 million from the transaction but won’t get a clear picture of their financial situation until they release their fiscal outlook for 2015 at the end of May.
The revelation comes after Sony has spent the last couple of months streamlining its operations. Since the start of 2014, Sony has terminated its VAIO line of computers, laid off 5,000 employees, and entirely restructured its TV business. Most recently, Sony has shut down several of its most notable buildings — including their old Tokyo headquarters.
New York City’s Sony Tower was sold for $1.1 billion.
Sony has blamed their struggles on their failing TV and PC businesses, but they are also falling behind in the console wars. According to TechRadar, the Xbox One out-sold the Playstation 4 going into this year and Microsoft claims 46% of the entire US hardware market share. This is a stark contrast to the days when the Playstation 2 dominated over 155 million households.
Sony has warned investors that they expect to incur a $1.1 billion dollar loss at the end of the year and their future could be in jeopardy. The once powerful tech giant hasn’t had a successful venture in years and there is speculation they will cut ties with several of their subsidiaries — most notably the beloved Walkman.
The Sony Corporation became an overnight sensation in 1979 when they introduced the world’s first portable music player, but subsequent failures proved to be very costly. Critics of the company believe they could have had a stronghold on the digital music industry, but waited too long to adapt. The result was Apple dominating the MP3 landscape with the iPod while everyone forgot who did it first.
Square Enix, best known for creating RPGs like Final Fantasy, Dragon Quest, and Kingdom Hearts, has yet to comment on the situation. But there are already rumors that this may be the final nail in the coffin for Final Fantasy which has been criticized heavily for its lack of improvement in recent games.
All of the original creators of the game are no longer at Square Enix and it’s been taking the company longer to produce titles. And now, without Sony’s backing, it may be even more difficult for the game developer to manufacturer the game.
This is a critical time for Sony and there is no way to predict what will happen to the company. But if video game history has taught us anything it’s that if you’re not number one, you’re in last place. Just ask Atari.
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