Sony Takes Stock of Corovavirus Impact, as Cinemas Close Around Asia

Sony Pictures Studio Culver City

Japanese electronics and entertainment giant Sony said that the coronavirus has not – yet – caused it to change its financial guidance it has provided for the financial year, which ends in just a few days. Its games unit has escaped lightest so far. But the movie business at Sony, and in Asia, continues to suffer shutdowns. Around the region further cinemas were closed.

Sony provided a clear breakdown of where the coronavirus is inflicting pain.
Games and network services: “Sony estimates that there will be no material impact on this business for the current fiscal year. Although no issues have emerged so far, Sony is carefully monitoring the risk of delays in production schedules for game software titles at both its first-party studios and partner studios, primarily in Europe and the U.S.”

Music: “Especially outside of Japan, the business has started to be affected by delays in new music releases, interruptions in supply chains for CDs and other physical music media, and a decrease in music licensing resulting from both lower advertising activity and delays in production for motion pictures and television productions. Concerts and other live events around the world are being cancelled or postponed, including all Sony-sponsored performances and events in Japan.

Pictures (film and TV): “The motion pictures business as a whole is being affected by shutdowns of movie theaters around the world and various restrictions on people’s movement, leading to circumstances including early termination of theatrical runs and delays in release dates. Sony has temporarily shut down all of its film and television production, resulting in future changes in theatrical release dates for some titles.

Electronics Products & Solutions: “In addition to the shutdown of Sony’s manufacturing plants in Malaysia, the flow of resources from suppliers in Asia has become unstable, having a wide-ranging impact on the manufacturing of goods in this segment. Sales of Sony’s products are also being affected by lockdowns around the world and retailer closings.”

Sony said that it expects that results in the fiscal year ending March 31, 2021, which begins in April, this year will be affected. But it could not quantify the hit.

The corporation has told its newly-hired college graduates, who were scheduled to start work at the company on April 1, to stay home instead. The current plan, subject to revision, is to have them to begin their new careers in May.

Sony has also told that some 20,000 employees mainly in the electronics division to work at home as a “general rule.” Employees in Sony’s music and other entertainment businesses are already working from home.

These are responses to a recent spike in coronavirus infections that has led Tokyo Governor Yuriko Koike to ask Tokyo residents to refrain from going outside this coming weekend.

Elsewhere in Asia, there multiple moves were announced on Friday to increase social distancing.

  • Japan Toho Cinemas, operator of Japan’s largest theater chain, and rival Shochiku Multiplex Theaters will close all their theaters in Tokyo and neighboring Kanagawa prefecture March 28-29 in response to Tokyo Governor Yuriko Koike’s request for “self restraint” in outside activities this coming weekend. The total of closed theaters for Toho is sixteen and for Shochiku, six. Many other theater owners are planning similar shutdowns in the Tokyo and Kanagawa areas, with a growing number planning to stay closed from March 30.
  • Hong Kong The Special Administrative Region’s government ordered all cinemas in the territory to close for the next two weeks, as part of an ever-stricter package of measures to combat the coronavirus.
    To increase social distancing, public gatherings will be limited to four people. Games centres, bath houses, fitness centres, places of amusements (such as skating rinks, bowling rallies) and public entertainment venues (including as cinemas), and party venues must close at 6pm for 2 weeks from Saturday. These venues will be potentially be eligible for government subsidy.
    Earlier Friday, Hong Kong announced its highest ever daily increase in the number of new Covid-19 cases. The 65 additional cases raise the total number of infections to 518. There have been four deaths.
  • South Korea Leading cinema chain CJ-CGV is to close 35 complexes from this weekend. That is some 30% of its circuit. In most cases the number of screenings will be cut from 7 per day to just three. The new policy has all CGV employees working three days a week, turning the other two days into paid vacations. Managerial level employees will see cuts of up to 30% to their monthly salaries, until the end of the year. Rival chains have taken different approaches. Megabox is also closing down 10 multiplexes. Lotte is hesitating about shutting down cinemas. The Korean box office has collapsed to as low 25,000 admissions per day. “It might be more reasonable to shut down all our branches, considering that there’s no new film scheduled for a theatrical release until May, but we decided to close down 35 branches first to keep the film industry going,” said a CGV spokesperson.

Mark Schilling in Tokyo and Sonia Kil in Seoul contributed to this report.