Credit firm Fitch has downgraded Sony’s credit rating after recent financial reports showed losses of US$198 million.
Citing Sony’s “loss of technology leadership in key products and the strong yen”, Reuters is reporting that Fitch dropped the company’s rating three notches, from ‘BBB-’ to ‘BB-’.
Sony’s lack of influence over the technology market, lack of strong products, the strong Yen, and fierce competition posed by Apple and Samsung were to blame, it said.
It has been suggested that the downgrade was also due to Sony’s sale of US$1.82 billion worth of convertible bonds, which it used to fund the acquisition of cloud gaming service Gaikai.
“This wasn’t an easy decision. But their reputations have been hit so much that it’ll take a long while to crawl back,” said Fitch corporate research head Matt Jamieson.
Sony has posted a net loss for the past seven consecutive financial quarters.
Analysts believe that a restructuring combined with a weakening yen could turn the company’s recent fortunes around.