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PlayStation business boosted by PS4 and Vita sales

Q3 results: Sony to cut 5000 jobs as wider business struggles

Sony is preparing for sweeping cost-cutting measures that will result in about 5,000 redundancies, the corporation has announced, with its TV and PC divisions dragging down its financial performance.

Despite the media empire reporting £163 million ($266m) profit for the holiday quarter between October and December, Sony expects that it will be managing with a net loss of £665m ($1.bn) at the end of the financial year in March.

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Wider problems at the company were offset by the strong performance of its PlayStation division. The company sold around 7.8 million home consoles (PS2, PS3 and PS4 sales combined) and about 2 million handhelds (PSP and Vita sales combined) during the quarter. It also sold around 126 million games for these systems.

The robust games division brought in £2.7 billion ($4.35 bn) revenue, representing a 64 per cent year-on-year increase. Such a significant surge in sales pushed the games division into high profit, making about £109 million ($177m) during the quarter. Compared to last year, the games division profit is nearly up by 300 per cent.

Yet wider problems - particularly within the TV and PC businesses - have led Sony to cut its global workforce by 5,000 and make drastic changes to those divisions. In 2011, Sony employed about 168,000 people, meaning as a percentage the cut is small.

Sony said it will sell its PC division and instead focus on tablets and smartphones, while the TV unit will split into a subsidiary business. Initially the plan was to make both divisions profitable within the current financial year, but this is no longer projected.

The PC hardware business has entered into an unprecedented decline of six consecutive quarters, while the TV market has become a difficult area to make profit due to overall declines in sales and competitors driving down unit prices.

Despite the recent success of the PlayStation 4, which has outsold Microsoft's Xbox One in key markets, there is a clear difference to the wider financial performance of both parent companies. In January, Microsoft reported a net income of $6.5 billion (£3.9 bn) for the quarter, outperforming expectations.

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