For Sony, It's Not 'Game Over' -- Yet

Japan Sony
Shizuo Kambayashi/APSony CEO Kazuo Hirai

Investors will no longer be rewarded for holding on to shares of Sony (SNE). The Japanese consumer electronics titan is holding off on paying a dividend this fiscal year. It's the first time that Sony won't be declaring a dividend since going public in 1958.

%VIRTUAL-WSSCourseInline-865%There's a lot of history in that time. The company that got its start in 1946 as an electronics shop in a department store building would go on to usher in an era in which Japan became known as an exporter of quality consumer electronics. From televisions to camcorders to video game systems, Sony either pioneered new trends or hopped on existing ones and raised the bar. Steve Jobs, Apple's (AAPL) visionary, credited Sony as having been his inspiration in his youth.

This is the company that ushered in the era of portable media players with the Sony Walkman in 1979, following that up a couple of decades later by leading the development of the Blu-ray optical disc platform that gives video buffs a hi-def viewing experience.

Sony was great. It's not doing so well these days.

Getting It Wrong

Sony has bet on the losing side before. Its Betamax platform faltered when the market favored VHS. Its memory stick solution never took off relative to SD cards in the realm of data storage. However, it has been able to overcome its past miscues by rocking nearly everywhere else.

It's a different scene these days. Sony has posted losses in all but one year since 2008, and fiscal 2015 is shaping up to be another year of red ink. Sony just warned that it's looking at a loss of nearly $2.15 billion, fueled largely by an impairment charge as it writes down the value of its mobile communications unit. Smartphones were supposed to be the ticket for Sony to rejuvenate its fading electronics arm, but Sony's been no match for nimbler and more effective players outside Japan.

This has been a rough year for Sony. It sold off its unprofitable PC unit and it spun off the horrific television business, which hasn't posted an annual profit in the past decade. Earlier this year it shuttered most of the Sony stores in this country. Why not? It's not as if Sony has a lot of consumer electronics to sell in a world where VAIO PCs are gone -- and its TV business will likely be sold off if it's not discontinued.

Holding On to What It's Getting Right

Things aren't all terrible at Sony. After falling behind the Wii and Xbox 360 in the previous generation of gaming consoles, PlayStation 4 is crushing Wii U and Xbox One. This may not seem like a big deal outside of die-hard gamers, but it could be a way for Sony to begin to rebuild its brand with young teens and millennials who don't necessarily associate the company with quality consumer electronics.

Sony is also holding up well on the entertainment front. In its prime, Sony began to expand into movie studios and record labels. The music industry has been a challenging niche since folks began to swap MP3 files, but the video industry is benefiting from the digital revolution in which content creators can benefit beyond theatrical and retail physical media distribution.

All of this may not be enough. Sony brought in a new CEO two years ago, choosing to go with cost-cutting insider Kazuo Hirai as its new helmsman. Losses continue despite his initiatives, but there's always the hope that he's making the hard decisions now to cut loose money-draining divisions. The layoffs and subsidiary trimming may not be helping morale, but there are enough parts that are still working to serve as a foundation. The challenge here is for Sony to stop the bleeding. A turnaround can't begin until losses turn into profits. We're not there yet, and Sony may never get there.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. Check out our free report on the Apple Watch to learn where the real money is to be made for early investors.