Sony to Sell US HQ Building for $1.1 Billion
The success of PlayStation is very much linked to the success of Sony, which is why it has been worrying to see the company shrink significantly over the past decade. The fear is that a lack of funds could mean that the PlayStation 4 will be a low-risk bit of hardware, sold cheaply, but not at a loss and with little investment into games.
Thankfully, Sony has shown that it is willing to take the necessary steps to turn things around, leaving industries where it doesn’t stand a chance and doubling down on investment in areas where it could be a success. Their latest move will now be to sell their US headquarters for a whopping $1.1 billion.
Sony is set to profit substantially off of the sale, after having bought the 550 Madison tower off of AT&T for less than a quarter of the price. Once building-related debt and transaction costs are paid off, the deal is expected to add $770 million to Sony’s coffers.
Nicole Seligman, president of Sony Corp. of America, said in a memo to employees:
As we had hoped, there was great interest in this iconic building. Given the opportunities and challenges in the current economic and real estate landscape, selling 550 Madison now is a timely and logical strategic move.
New York-based Chetrit Group, a real-estate firm, will buy the tower, with Sony expected to vacate the tower within three years and move elsewhere in the city.
Earlier this month, the Japanese media reported that Sony was considering selling one of its main buildings in Tokyo.
Sony will be “re-evaluating” its earnings outlook, which currently forecasts a 20 billion yen ($223 million) annual net profit, “to take into account this sale and other factors that might affect such forecast”.
Of course, the money from this sale is most likely going to be spent on balancing the company’s books, something that will help the financial stability of Sony Computer Entertainment (their PlayStation division), but it’s more enjoyable to imagine that all this will be spent on games. With average game development cost cited as between $20 to 40 million, Sony could hypothetically develop over 25 games with a $30 million budget on top of their current line-up. That’s not going to happen, but we can dream.
Are you happy to hear that Sony seems to be making the right moves to return to profit? Is this all part of an epic comeback, or are they inevitably doomed? Let us know what you think in the comments below.