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1
page
Sony Corporation Annual Report 1999
To Our Shareholders
The fiscal year ended March 31, 1999 was not only a very challenging one but also a very
important one in which Sony began a reorganization focused on the future.
During the year under review, although Sony’s consolidated sales and operating revenue
rose 0.6% to ¥6,794.6 billion ($56,622 million), operating income fell 34.9% to ¥338.6
billion ($2,822 million) compared with the previous year. Sony expects the difficult oper-
ating environment to continue for at least part of its current fiscal year which started in
April 1999.
In this environment, Sony took significant steps toward growth and reorganization. In
March 1999, Sony Computer Entertainment (SCE) announced the basic design of the next
generation PlayStation. In the same month, Sony also announced a wide-ranging corporate
reorganization and reinforcement of group management capabilities, including the reorga-
nizing and strengthening of our Electronics business as well as the privatization of three
Sony Group subsidiaries.
These announcements appear to have been received favorably by investors. We recog-
nize that shareholders have considerable expectations of our management strategies, and
we are committed to the steady implementation of these strategies.
REALIGNING AND STRENGTHENING THE ELECTRONICS BUSINESS
As part of the new group framework, Sony reorganized the internal company structure of
the Electronics business in April 1999. The existing Electronics business was consolidated
into three main business units: the Home Network Company, the Personal IT Network Com-
pany, and the Core Technology & Network Company. Separately, SCE, which is responsible
for the PlayStation business, was designated as another main business unit related to the
Electronics business.
Research and support functions have been transferred from the group headquarters to
the three Network Companies. In addition, to encourage autonomy and independence, we
have transferred management authority to these Companies. Also, as appropriate, the Net-
work Companies may independently or jointly create new ventures. With these steps, Sony
aims to flexibly take advantage of new business opportunities in today’s rapidly changing
digital network era.