Sony's (NYSE:SNE) numbers for the past fiscal year are in, and they're not good. The company had previously tempered expectations, citing an exiting of the PC business as its reason for expecting a $1.27 billion loss. Actual losses came in at approximately $1.25 billion for the year. The company expects to post a $489 million loss in the current fiscal year and also announced that it will split off its mobile communications unit. Sony's movie business managed to turn a profit, but its financial services division was the company's best performer. Debate will continue to rage as to what should be done with the company's TV business.

Sony's gaming business performed well in the last year, but posted a $78 million operating loss due largely to costs associated with launching the PlayStation 4. The company's PlayStation business looks to be increasingly important in the next several years. What does the future look like for the company?

A lumbering giant attempts to change
Sony is in the midst of restructuring and attempting to deal with troubled parts of its business. The company is selling its Vaio PC brand and will also spin off its TV business. The new subsidiary will be operated by Sony, but these changes are being accompanied by major structural changes. The company plans to layoff 5,000 people before the fiscal year is out, part of a necessary effort to slim the company down and stop resource bleed. It's still a reduction of potentially worrying size, nonetheless.

The company expects to have incurred losses of approximately $1.69 billion from its PC business between the past fiscal year and the one ending March 31, 2015. Of the approximately $890 million in PC-related losses from the last year, approximately $566 million came from costs associated with getting out of the business. This high figure provides an indication of the types of expenses Sony might face in exiting the TV business.

Does Sony need to get out of TVs?
Sony is currently third in the TV market, behind Samsung and LG, but its high-end business model has been floundering as consumers opt for cheaper alternatives. The company bet heavily on 4K adoption, to the point that its expectations appear unreasonable. Sony's television sales increased 29.7% year-over-year, but still delivered an operating loss of approximately $250 million for the company. The company projects growth on the back of its LCD televisions, however its current shipment target of 16 million units for the current fiscal year seems high.


Whether Sony should get out of televisions is trickier than it seems. It's obvious that the business is a loss generator for Sony and that more cost-efficient manufacturing from Korean and Chinese companies poses a major threat to future viability. That said, the trend of electronic device convergence makes a smart-TV presence a valuable asset. The functions of gaming, video, and music players are increasingly included in televisions, threatening to make dedicated devices irrelevant. In a hypothetical future in which Sony no longer generates significant revenue from PlayStation hardware or Blu-Ray players, having a smart-television presence makes sense.

How Strong is PlayStation?
The gaming business remains one of the bright spots at Sony. An operating loss of $78 million for the last fiscal year isn't worrying given the costs associated with launching and marketing the PlayStation 4, as well as the writing off of several PC software projects. The company sold approximately 14.6 million units of its home console PlayStation line. Sony's portable consoles sold just 4.1 million units in the previous year, a strong indication that the PS Vita will be the company's last dedicated handheld gaming device.


Expectations for the current fiscal year see just 3.5 million handhelds sold, while Sony projects the home console line to move 17 million units thanks to strong PS4 sales. Network services revenue should also experience meaningful growth.

How is Nintendo doing?
Taking a look at another Japanese games maker, Nintendo (NASDAQOTH:NTDOY) recently posted disappointing results for the last fiscal year. Research and development, acquisitions, and underperforming hardware sales contributed to an operating loss of approximately $456 million and a net loss of approximately $228 million.

The company projects a return to profitability in the current fiscal year, forecasting an operating profit of approximately $393 billion. On the plus side, the company claims it is no longer losing money on sales of its Wii U hardware. On the other hand, this should be a big investment year for the company, and the 3DS looks like it will need help to reach its 12 million unit sales target.

Will Sony's turnaround be successful?
Sony President Kaz Hirai has his work cut out for him. While the company's financial services and gaming businesses look strong,  its TV ventures remains a troubling variable. The company also has an opportunity for growth in the mobile sector, but it will need to improve its margins. For Sony, the road ahead is long.

Keith Noonan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.