TOKYO: Sony Corp will write down the value of its movie business by nearly $1 billion in the third quarter, blaming weaker film profits as online streaming services sap demand for movie DVDs.
In a statement, the Japanese TV-to-gaming group said it had cut its outlook for earnings from DVD, blu-ray discs and other home entertainment in line with a market decline.
Sony, under chief executive Kazuo Hirai, has been slashing costs to end years of losses across its sprawling business, writing down over-optimistic valuations. It said on Monday that the pictures segment overall – including television – expected to see profits improve as a result of the changes.
Sony’s movie studio has recently lagged behind competitors in box office share and big hits, and underperformed its rivals in the global box office. In 2016, Sony films accounted for 8 per cent of US and Canadian ticket sales, ranking fifth among major Hollywood studios, according to the Box Office Mojo website.
This year, Sony will be counting on films such as Spider-Man: Homecoming, which it is co-producing with Walt Disney Co’s Marvel Studios, animated movie Smurfs: The Lost Village and action flick Jumanji, starring Dwayne Johnson.