Desperate Sony Banks On World Cup Goal

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Sony is set to use the 2010 FIFA World Cup Finals in South Africa, in an effort to boost their sagging popularity. In Australia the local subsidiary will have access to the Australian team who qualified at weekend.

Sony who put up over US$375M in sponsorship money 12 months before the economic downturn, is banking on the event with some analyst tipping that the Company will launch several new products including new OLED TV’s and new duel layer Blu ray DVD’s that can pack in up to 9 gigabytes of data.


Also tipped are new Playstation Games and a new Playstation player as well as new digital camera’s and sound systems.

The World Cup deal which was negotiated prior to the economic downturn is set to cost Sony over $800M as the Company invests in global marketing programs in an effort to get a return on their FIFA World Cup investment.

In Australia Sony is set to benefit from the qualification this weekend of the Australian team with the Company set to use the FIFA World Cup across both consumer and trade promotions. The Sony contract with FIFA runs untill 2014 and in recent months Sony Australia has been linking their struggling Bravia TV brand with Soccer via a recent TV commercial for their 200HZ Bravia Motionflow technology which was recently superseded by 600HZ TV technology from both Samsung and Panasonic.

Sony executives in Australia have told ChannelNews that due to a lack of big sporting events in 2009 Sony Australia is preserving marketing budgets for a major assault on Soccer in 2010 and the run up to the FIFA finals in South Africa.

Under pressure from Panasonic, LG and Samsung, Sony has over the past 12 months become a consumer electronics basket case with the CEO of Sony Sir Howard Stringer admitting that almost all of their product categories including Bravia LCD TV’s, Vaio Notebooks and Netbooks, Playstation gaming consoles and their digital camera and Handycam range are all bleeding losses. 

 

Sony lost over $2bn during its 2008 fiscal year which ended in March. Worldwide sales were down 12.9 per cent for the year and the Company is now resorting to third party manufacturers to make their products in a move which some analysts claim will lead to inferior components being used over “Made In Japan: components which the Sony brand was built on.

The company expects to say in the red next year and is projecting a $2bn for its current fiscal year ending March 2010.

In Australia Sony Communications Director Jenny Geddes has mounted a major campaign to try and discredit SmartHouse and ChannelNews from writing on Sony’s global and domestic problems.

On May 14th the Day that Sony was announcing billions in losses Sony Australia sent a letter to media organisations that contained blatant and deliberate untruths about 4Square Media, they also sent 4SQM a legal letter threatening us with legal action. The claims in the letter which were based on false claims that Geddes was trying to peddle in an effort to intimidate both myself and other journalists from writing about poor Sony management, the laying off of staff in Australia and the failure of most Sony products to deliver profits to the Sony Corporation.  

When things started looking bad last December, Sony announced a major cost-cutting regime that would see the closing of five production sites and elimination of as many as 160,000 jobs by 2010.

Last week a core business of the Sony Corporation, Sony Financial Holdings crashed on the Tokyo stock exchange after it was revealed that the value of its life insurance business fell by more than half last financial year. Within minutes of the news being revealed Sony stock plunged to the lowest it has been since October 2007.

 

The stock was the top decliner among 1,655 companies on the MSCI World Index and had the second-largest drop on the Topix index.

Sony Financial said that the insurance business’ worth fell to $5.2 billion for the year ended March 31.

The Company is currently trying to raise billions in financing before December 31 when current liabilities fall due. It is not known how much of the World Cup sponsorship money had paid upfront. 

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