Sony Computer Entertainment 2011 Fiscal Report : Deficit Over 94.7 Billion Yen

Opus Angelorum said:
The problem Sony have is both Nintendo and Microsoft have a unique selling point (Wii U controller/Kinect). Move does not have the same appeal, so the PS4 is going to have to differentiate itself somehow. Now whether that is through hardware specifications or ecosystem we'll have to see.
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I think we need to drop Kinect from this logic now. It 'was' a success (a big one) for a while, but the lack of focus on it and from what I can tell - little sales. Kinect isn't as big a thing as it once was and has slightly died off.

I think it'll launch with the next Xbox, but things like audio recognition will be built into the Xbox.

I agree Sony have problems though. What do they market themselves at? Where?
They need to turn their devs attentions to more family friendly games, not 'non violent' just not gratuitous over the top violence.

If Sony can launch PS4 at an affordable rate with some top level exclusives, they should be okay. They shouldn't be chasing PS3 sales numbers - just profit.
 
Parmenides said:
Game Business Operating Income (FY10 + FY 11) ~ 60 Billion Yen

FY 11 - Game

14_image.jpg
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Where do you get FY10 operating income.

-----

This is what's something of a mystery to me. Operating income afaik already takes into account SG&A expenses and according to this chart "Game" has an operating profit for FY11.

Sales revenues don't match either. This graph has them at ~850B yen revenues for FY11. That pdf has ~530B yen.
 
Opus Angelorum said:
Well Sony are in a difficult position.

On one hand they have to reduce costs, and on the other they need to compete with Microsoft.

They could make the PS4 less cutting edge, but still powerful (compared to the Wii U).

The problem Sony have is both Nintendo and Microsoft have a unique selling point (Wii U controller/Kinect). Move does not have the same appeal, so the PS4 is going to have to differentiate itself somehow. Now whether that is through hardware specifications or ecosystem we'll have to see.
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Sony does not have to compete with MS, actually logically speaking it's probably better if they don't. Unlike Nintendo, Sony already knows the rough specs of one of it's competitors, as long as it releases at a decent price the combined sales of the Wii U and PS4 would be enough to make developers want to develop for it in comparison to the smaller install base at first of the 720 due to the likely significant price increase. The only issue is is MS pulls off a PS2 but that's unlikely if they go cutting and a siginificant launch price.

Basically it's between mediocre sales+ but not selling at a loss at first or mediocre sales+ while selling at a loss. Given the current economic climmate I don't see a loss leader console selling gangbusters at this period of time. May not be great for gamers, but it makes the most sense for Sony.

Loss leader strategy at this point is a fools errand for Sony and due to the year difference they can pull a wii while still having more powerful tech than the wii U it just may not be up to 720 standards.
 
Weird how this turned out. After PS3 launch it had a few price drops that next year. Every article said it was a flop. Sales were.weak, tretton lied about being not able to find a ps3 on store shelfs. Microsoft had all the jrpgs and gears. MS were great after launch.

They turned ps3 around to an extent (I have bought every sony system at launch). Think vita will be the same. So many calling it a failure. Such a great system that is being left out in the cold. Honestly if they bow out gaming will go on.

Sony for the gamer reminds me of mom and pop videogame stores that just sell games. Just cant stay viable that way. Every comicbook store sells figures or anime or games also. Seems like the model is changing. Everything they are good at does not equal sales.
 
amrihua said:
The Vita has been costly. Give it until next year to see if SCE can be turned around or not.

Maybe a new company will enter?
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This is red ocean industry, dude. Not one with its sane mind will enter this market. MS was exception because it got money and software know-how to back it up.
 
So, has anyone pointed out that Sony has almost 18 billion USD in debt? They are currently above water, but it's not by very much, and they can not handle another year or two like this, especially since consoles cost so much to launch.
 
Yopis said:
Sony for the gamer reminds me of mom and pop videogame stores that just sell games. Just cant stay viable that way. Every comicbook store sells figures or anime or games also. Seems like the model is changing. Everything they are good at does not equal sales.
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Though your analogy is awful, your concluding sentence is a good one: It does seem like Sony is good at things that are not generally well liked in the market.

Frankly, I think the company is too technology focused for the sake of technology. I have no doubt that Sony has thousands of patents that are basically worthless because either there is no marketable application for it or they simply hadn't thought of one in advance.
 
z0m3le said:
So, has anyone pointed out that Sony has almost 18 billion USD in debt? They are currently above water, but it's not by very much, and they can not handle another year or two like this, especially since consoles cost so much to launch.
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Is that how much :o
I knew it was a lot.

This is such a big big problem. Can Sony afford to 'downsize' and pay off this debt?
I know they've already been getting poor credit ratings so that debt must be reasonably expensive.

Sony simply can't afford to launch a console at a loss. Maybe not a big mark up, but they can't make a loss on the units.
I doubt Sony could even afford Vita being a sudden success!
 
z0m3le said:
So, has anyone pointed out that Sony has almost 18 billion USD in debt? They are currently above water, but it's not by very much, and they can not handle another year or two like this, especially since consoles cost so much to launch.
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Sony's woes are pretty well noted on this forum. However its more likely that this loss is a cost associated with their next console.
 
Kung Fu Grip said:
Always love these crazy overreacting sony threads. Some post are amazing.
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Sony is over $18 billion in debt and is bleeding money.

Even the most ridiculous posts in this thread about shutting down the company and selling off devs are actually realistic points of discussion right now with the company in these dire financial straits.
 
Out of curiosity, how long after launch did it take Sony to admit that PS3 was selling below expectations? I'm actually kind of impressed that they've maintained the facade of denial around Vita as long as they have.
 
Plinko said:
Sony is over $18 billion in debt and is bleeding money.

Even the most ridiculous posts in this thread about shutting down the company and selling off devs are actually realistic points of discussion right now with the company in these dire financial straits.
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Sony has been in debt for a while now, it isn't new news. And the points about selling off devs/going third party are just as dumb as they were before. Gaming is still one of their top performing ventures.
 
iamshadowlark said:
Sony's woes are pretty well noted on this forum. However its more likely that this loss is a cost associated with their next console.
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I'm really not talking about that, how can they launch a console when their debt is so high and their value is estimated around $20billion, Sony needs to be very careful how it handles this situation, and it could really effect the entire industry if they keep losing money for another couple years. (that is why ~$18billion is quite a scary number to have in debt, since it's 9/10th of the entire company's value.)
 
Plinko said:
Sony is over $18 billion in debt and is bleeding money.

Even the most ridiculous posts in this thread about shutting down the company and selling off devs are actually realistic points of discussion right now with the company in these dire financial straits.
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Where does the $18 billion figure come from?
 
z0m3le said:
I'm really not talking about that, how can they launch a console when their debt is so high and their value is estimated around $20billion, Sony needs to be very careful how it handles this situation, and it could really effect the entire industry if they keep losing money for another couple years. (that is why ~$18billion is quite a scary number to have in debt, since it's 9/10th of the entire companies value.)
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Thats not how it works.
 
iamshadowlark said:
Sony has been in debt for a while now, it isn't new news. And the points about selling off devs/going third party are just as dumb as they were before. Gaming is still one of their top performing ventures.
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A number of Sony's devs produce rather niche products. Sony might do well to sell them off to businesses that probably would pay a lot as they might feel they can turn them around and make a lot more money out of them.

This would help Sony pay off its big debts. In the end the games business probably doesn't turn enough profit to pay that debt off WITH interest rates. There will be pressure on them to reduce that debt by paying off chunks of it.

Not to mention - Sony's ability to raise more capital is weakened, so selling assets is a good way to raise the funds needed to reorganise and redirect the organisation.

The loss this year might be to do with R&D but the fact is its still a cost of being in the games industry - Sony haven't made the profits to pay off the PS3 costs. Saying its top performing is over the top since a chunk of that debt will be SCE's.

Next gen won't make Sony $18 billion + interest.
 
z0m3le said:
It's the combined total of all their debt as close as may this year $17.7 billion dollars. I'll try to find the source, but I'm at work right now.

That $20 billion in value doesn't take the debt into account, Sony is expected to pay off the debt, so it doesn't somehow add value to Sony's overall worth.
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A source would be nice. The debt seems to be growing exponentially as this thread gets longer.
 
gamergirly said:
Sony will have little to gain from releasing a console over $400.
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I wonder if they can deliver on a more powerful machine than MS this upcoming gen given their financial status. Another PS3 level mishap and it will be curtains, the risk is too big for Sony for a huge loss-leader model like the PS3. They're not riding the coat tails of the PS2 entering next gen.

If MS decides to go for the kill and make a bigger loss at price parity ($400?) superior console with flawless Backwards Compatibility and account migration than it's Game Over Romeo Done, but it looks like MS wants to do some media hub Kinect thingamabob.
 
impact said:
Hopefully for the PS4 monster console. I'd pay $599
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In this economy you would literally be the only one.

z0m3le said:
So, has anyone pointed out that Sony has almost 18 billion USD in debt? They are currently above water, but it's not by very much, and they can not handle another year or two like this, especially since consoles cost so much to launch.
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Yikes. I knew it was a lot but not that much. Sony's current market cap is only something like $14 billion.

At what point, if any, does something hit the panic button? Or have we already reached and breached that? Because to be honest it really doesn't feel like there is that much urgency coming from Sony at the moment.
 
alphaNoid said:
The elephant in the room remains. Sony continues its downward spiral and its time people start accepting a no Playstation future is very real. Its not tomorrow but things keep getting worse.
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There is no elephant in the room. We all know that Sony is a deep trouble. However, I fully think they can bounce back if they change their stupid mismanagments and focus on their strength.

So far, though, it looks like Sony has no intend to improve and the future looks bleak.
 
Y2Kev said:
Few here really have any training in financial and capital markets. It is very frustrating.
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To be fair this is true of every subject in every GAF thread.

People pontificating in film threads about the profit and loss of films when they don't understand that the theaters split the box office grosses with the studios is particularly galling.
 
i1qm6hxB15fGp.gif



I would say that the smiling guy in the middle represents most of GAF with Sony's current prediciment. As screwed up as Sonys current position is, and its their own fault for their mismanagement, i just don't understand the thought process that goes into being joyful when a company is having misfortunes. Out of all the sites/forums i go to, nothing is like GAF with the blatant, and continuous bashing of Sony...i just dont get it, but oh well it is what it is.
 
Kenshin001 said:
A source would be nice. The debt seems to be growing exponentially as this thread gets longer.
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Sony's debt is a matter of public record. But his number is wrong. Short term borrowings + current portion of long term debt + long term debt, I believe, is generally taken as "debt."
http://www.sony.net/SonyInfo/IR/financial/fr/11q4_sony.pdf
~1.2 trillion yen.

Further to that, translation into USD is distorting. The yen is incredibly strong right now.
cf FY03 http://www.sony.net/SonyInfo/IR/financial/fr/qfhh7c000000kjva-att/03q4_sony.pdf
~1.2 trillion yen.
 
CadetMahoney said:
I wonder if they can deliver on a more powerful machine than MS this upcoming gen given their financial status. Another PS3 level mishap and it will be curtains, the risk is too big for Sony for a huge loss-leader model like the PS3. They're not riding the coat tails of the PS2 entering next gen.

If MS decides to go for the kill and make a bigger loss at price parity ($400?) superior console with flawless Backwards Compatibility and account migration than it's Game Over Romeo Done, but it looks like MS wants to do some media hub Kinect thingamabob.
Click to expand...
I expect the PS4 will look a lot like the Vita: full of off-the-shelf commodity parts to ensure hardware isn't sold at a loss for very long. Another PS3 would be a disaster, and Sony will throw current PS3 owners under the bus if they have to.

Being more powerful than the next X-Box doesn't matter very much in the grand scheme of things. The history of consoles is chock full of devices that dominated in spite of their lack of power compared to the competition. But it's better to deliver a modestly-powered machine early rather than late.
 
Kenshin001 said:
A source would be nice. The debt seems to be growing exponentially as this thread gets longer.
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I can't find the source I have for 17.7 Billion, which was a combination of short and long term debt for Sony... What I did find confuses me:

http://www.wikinvest.com/stock/Sony_(SNE)/Data/Long-Term_Debt/2011
http://www.wikinvest.com/stock/Sony_(SNE)/Data/Total_Short_Term_Debt

Now the long term debt isn't dated this year, so it might have paid off some of it's debt with that huge loss they reported back in april? but those numbers together is much higher than what I had seen before...
 
Plinko said:
Sony is over $18 billion in debt and is bleeding money.

Even the most ridiculous posts in this thread about shutting down the company and selling off devs are actually realistic points of discussion right now with the company in these dire financial straits.
Click to expand...

Holy!

Could we see Sony merging/acquired with/by some company? They got a new OLED deal with Panasonic, though what Sony need is the Nissan solution.
 
Busty said:
At what point, if any, does something hit the panic button? Or have we already reached and breached that? Because to be honest it really doesn't feel like there is that much urgency coming from Sony at the moment.
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Hirai's mission as the CEO is to restructure the whole company and make it profitable again. Expect massive layoffs and downsizing pretty soon.
 
z0m3le said:
I can't find the source I have for 17.7 Billion, which was a combination of short and long term debt for Sony... What I did find confuses me:

http://www.wikinvest.com/stock/Sony_(SNE)/Data/Long-Term_Debt/2011
http://www.wikinvest.com/stock/Sony_(SNE)/Data/Total_Short_Term_Debt

Now the long term debt isn't dated this year, so it might have paid off some of it's debt with that huge loss they reported back in april? but those numbers together is much higher than what I had seen before...
Click to expand...

You should really stop talking about this stuff you have no clue on. Paying back debt has no relationship to a companies' profit or loss.
 
sloppyjoe_gamer said:
I would say that the smiling guy in the middle represents most of GAF with Sony's current prediciment. As screwed up as Sonys current position is, and its their own fault for their mismanagement, i just don't understand the thought process that goes into being joyful when a company is having misfortunes. Out of all the sites/forums i go to, nothing is like GAF with the blatant, and continuous bashing of Sony...i just dont get it, but oh well it is what it is.
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Most of GAF?

Really?

Really?

(tilts head to the side)
Reeeeeealllllllly?

shinra-bansho said:
Sony's debt is a matter of public record. But his number is wrong. Short term borrowings + current portion of long term debt + long term debt, I believe.
Click to expand...

I knew their debt was sizeable but not that sizeable.

Certainly not exceeding the total worth of the company.
 
sloppyjoe_gamer said:
i1qm6hxB15fGp.gif



I would say that the smiling guy in the middle represents most of GAF with Sony's current prediciment. As screwed up as Sonys current position is, and its their own fault for their mismanagement, i just don't understand the thought process that goes into being joyful when a company is having misfortunes. Out of all the sites/forums i go to, nothing is like GAF with the blatant, and continuous bashing of Sony...i just dont get it, but oh well it is what it is.
Click to expand...

um wat

No one wants to see Sony go down, only because of the studios they have. Sony to me is a name on a box, I care about Naughty Dog, Santa Monica, etc.
 
amrihua said:
Holy!

Could we see Sony merging/acquired with/by some company? They got a new OLED deal with Panasonic, though what Sony need is the Nissan solution.
Click to expand...
Nintendo and Sony will merge in six years for the fight of their life against MS and Apple. You read it first.
 
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