Moody's is concerned that Sony will not be able to maintain the profitability levels it had experienced years ago.
Moody's ( explained that the Japanese company was facing extreme pressure in its TV and PC units, due to "intense global competition, rapid changes in technology, and product obsolescence." )
Ultimately, Moody's concluded that it would be difficult for Sony to improve and stabilize its profitability.
"We expect the majority of [Sony's] core consumer electronics businesses -- such as TVs, mobile, digital cameras and personal computers -- to continue to face significant downward earnings pressure," Moody's wrote.
Sony released its Playstation 4 ahead of the Christmas period and recently announced it would introduce streaming games. While Moody's acknowledged that the successful launch of the Playstation 4 would help boost profitability, this wasn't enough to push profitability back to 2010 levels.
Sony shares rose 57% in 2013 as the Japanese markets rallied, though investors acknowledge that the company faces many competitive pressures from the likes of Microsoft (Fortune 500) and , Apple (Fortune 500). ,
The downgrade comes in the same month that Nintendo ( warned investors that it was expecting an operating loss of 35 billion yen ($335.2 million) for the fiscal year ending in March, following disappointing software and hardware sales in the busy end-of-year buying season. )
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