The Ten Years Decline of Sony

thehypocrite said:
50 millions on a new hardware lunch? That's not a lot of money. We have several software/movies lunches every year whose marketing budget is order of magnitudes higher. I don't to compare it to Apple, Microsoft, Nintendo, Samsung or Google. That's pocket change guys if you're looking for mass market penetration.
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Honestly, it's tough to have a serious conversation about this with you regarding business topics. I think that's a pretty big launch budget for the U.S. If you don't think Vita was meant to be a mass market device, than Sony's own sales projections are really confusing.

Regardless, my previous posts were regarding economies of scale.
 
SniperHunter said:
They have already learned, Kaz Kuturagi is gone and it seems like PS4 will be built using mostly off the shelf PC parts. The GPU might be customized though.
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Whether the hardware is customized or not isn't the problem - it's the expense of it and this is where Sony have not learned their lesson
 
Tagg9 said:
True, but I'll believe they've learnt their lesson when we know the price of PS4 vs. the cost of it.
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It should be low bro...they aren't researching a new CPU like Cell or the Emotion Engine, they aren't buying manufacturing factories either. Drive costs should be down, since blu ray is cheaper to manufacture now.....

Why was PS3 so expensive?

Many years of research with IBM for Cell.
Buying manufacturing plants for production < Pretty sure Sony sold all them
Blu Ray
partnering with nvidia for an off the shelf GPU < this also hurt MS back during the Xbox days.
 
I think Sony has learned not to create a expensive proprietary parts console like that PS3. However, I'm really concerned about Sony's ability to create a console consumers find to be desirable in a rapidly changing market landscape. Vita doesn't inspire confidence.
 
thehypocrite said:
Idle production? You think that Vita is made on a dedicated factory? I just see unsubstantiated speculation in your posts.
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There are, however, production lines dedicated to the production of Vitas. There were workers who were trained in their assembly. Machinery was likely created for the sole purpose of Vita fabrication. These assets aren't being fully utilized, and that's costing Sony money. These contribute to the marginal cost of producing a Vita.
 
PopcornMegaphone said:
Honestly, it's tough to have a serious conversation about this with you regarding business topics. I think that's a pretty big launch budget for the U.S. If you don't think Vita was meant to be a mass market device, than Sony's own sales projections are really confusing.

Regardless, my previous posts were regarding economies of scale.
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They have been off with their projections, thus they have already revised them down, they will likely do that same adjustment again.

jman2050 said:
In that case it never should have been made.
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If they make a profit for selling each unit, then yes it should be made. A large company as Sony doesn't leave any market untapped if they can make money on it. However the razorblade model should only be used by marketing companies. Hardware companies should only put products in the market if they are making enough money on the hardware since day 1 to justify it's existance.
 
thehypocrite said:
They have been off with their projections, thus they have already revised them down, they will likely do that same adjustment again.
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It's like every post is in a vacuum when we discuss things. As was posted before, the initial Sony projections were a mass market device, and the initial marketing budget reflected that.

In summary:

1) Economies of scale will impact vita's profitability.
2) Vita was positioned as a mass market device.


edit - my apologies for showing my frustration.
 
Sony spent $50 million on Vita advertising.
Microsoft spent $500 million on Kinect advertising.

This is where Sony are going wrong.
 
thehypocrite said:
If they make a profit for selling each unit, then yes it should be made. A large company as Sony doesn't leave any market untapped if they can make money on it. However the razorblade model should only be used by marketing companies. Hardware companies should only put products in the market if they are making enough money on the hardware since day 1 to justify it's existance.
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Any company has limited resources. The resources expended to extract a meager profit on a small number of units sold would be better spent on a more lucrative venture. I'm not sure if that's what you were saying with the last sentence there, but I figured I'd point that out.
 
PopcornMegaphone said:
It's like every post is in a vacuum when we discuss things. As was posted before, the initial Sony projections were a mass market device, and the initial marketing budget reflected that.

In summary:

1) Economies of scale will impact vita's profitability.
2) Vita was positioned as a mass market device.


edit - my apologies for showing my frustration.
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The thing is you're reading too much into the PR, Sony never invested on the PSVita as a mass market device. The 50 million marketing is a small figure for a new hardware launch.

In 2009 they spent 82 million pounds on PS3 in Europe alone.

The PSVita is a niche product, and I think that's clear for Sony now.
 
thehypocrite said:
The thing is you're reading too much into the PR, Sony never invested on the PSVita as a mass market device. The 50 million marketing is a small figure for a new hardware launch.

In 2009 they spent 82 million pounds on PS3 in Europe alone.

The PSVita is a niche product, and I think that's clear for Sony now.
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I agree with you, Sony believes Vita is a niche product now. That's why they ignored it at E3.

However, I seriously doubt they thought that when they launched it. Their own initial sales projections to investors (not marketing) confirms this.
 
GavinGT said:
Any company has limited resources. The resources expended to extract a meager profit on a small number of units sold would be better spent on a more lucrative venture. I'm not sure if that's what you were saying with the last sentence there, but I figured I'd point that out.
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I agree, that's the reason behind the none existing marketing for PSVita.

BibiMaghoo said:
Sony spent $50 million on Vita advertising.
Microsoft spent $500 million on Kinect advertising.

This is where Sony are going wrong.
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I think this was a good choice. The PSVita serves a niche very well right now, but it isn't a product that's capable of mass market penetration right now.

PopcornMegaphone said:
I agree with you, Sony believes Vita is a niche product now. That's why they ignored it at E3.

However, I seriously doubt they thought that when they launched it. Their own initial sales projections to investors (not marketing) confirms this.
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Then somebody needs to get fired. Several things that block the Vita from being a mass market product right now:

Propietary Storage Solution and no internal storage
Price of Games (Should be 29,99 and lower)
No appstore for continous expansion of functionality.
High Price of the Hardware (Must be 199,99 or less for everything you need to use it)
Cumbersome region locks of the online stores.
No user profiles at a system level.

Of course these things can be corrected with revisions and firmware/policies updates, but they aren't there yet.
 
thehypocrite said:
I agree, that's the reason behind the none existing marketing for PSVita.



I think this was a good choice. The PSVita serves a niche very well right now, but it isn't a product that's capable of mass market penetration right now.
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their big mobile device serves a niche. i think that describes their decline very well.
 
A little off topic, but I've always felt the Kinect marketing number as a fact was a bit of a myth. The number comes from the following quote from a NY Post article:

"Kinect is the largest, most integrated marketing initiative in Xbox history, bigger than its launch," said Robert Matthews, general manager of global marketing communications for Xbox. "We are going to be spending millions to launch this globally."

Microsoft launched Xbox in July 2000 with a $500 million marketing campaign, but part of that went to subsidies to make the hardware more affordable.
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Read more: http://www.nypost.com/p/news/business/microsoft_move_3gVmAyryJuD6px1dV7LeDP#ixzz260L8TkWm


Really, the 500m number is a bit of conjecture. MS doesn't say "the most expensive".
Largest could mean a timeline, geographical or something else. The budget may have been 500m, but I don't think it should be treated as a fact.
 
injurai said:
If the PS4 never comes, or sony dies I'm forever moving to PC.
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Comments like this baffle me. Are you a gamer? Or just a Sony fanboy?

As a teenager, yeah, I was a pretty hardcore Segabot, but even I moved on when Sega went down. Hell, despite hating Sony for a while (I blamed them for Sega dying lol) I still bought a PS2 at launch. Because regardless of what my favorite console is, I still love playing great games. I may not think much of the Wii for example, but I couldn't imagine not playing the latest Zelda or Metroid that comes out.

So yeah, if there was no PS4, that might suck a bit, but as long as those games end up somewhere, then it's all good. Consoles are a delivery system for games remember. So as long as those IPs end up somewhere, then it's all good. I can get almost all my beloved Dreamcast games in some fashion on Wii, 360, PS3 and PS2. So I'd like to think if Sony went down, they'd stick with software or at least sell their IPs to Microsoft or Nintendo.
 
Triple U said:
I don't see why you say this? Its a relatively low risk, moderate reward product. They have done better than any of Nintendo's competitors in the portable market, why not try to expand?
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Look up opportunity cost and understand why it's not okay for a company to develop and release a product just because they can, even if they don't necessarily lose money on it.

EDIT - Also take into account that conversations about the profitability of the hardware itself are a dead end. The real problem with the Vita (and the PSP for that matter, which is why I hesitate to call that system a success anywhere other than Japan) is that software sales are nonexistent. That's the key component that would deem the entire Vita endeavor, should it not improve, a failure.
 
Satchel said:
Comments like this baffle me. Are you a gamer? Or just a Sony fanboy?

As a teenager, yeah, I was a pretty hardcore Segabot, but even I moved on when Sega went down. Hell, despite hating Sony for a while (I blamed them for Sega dying lol) I still bought a PS2 at launch. Because regardless of what my favorite console is, I still love playing great games. I may not think much of the Wii for example, but I couldn't imagine not playing the latest Zelda or Metroid that comes out.

So yeah, if there was no PS4, that might suck a bit, but as long as those games end up somewhere, then it's all good. Consoles are a delivery system for games remember. So as long as those IPs end up somewhere, then it's all good. I can get almost all my beloved Dreamcast games in some fashion on Wii, 360, PS3 and PS2. So I'd like OT think if Sony went down, they'd stick with software or at least sell their IPs to Microsoft or Nintendo.
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You don't need to be a fanboy to have an opinion like that.

I'm already mostly a PC gamer but I've always had a console to complement it, if Sony doesn't come out with PS4 I would most likely do the same thing, unless MS stops charging for online and stops ignoring Europe or if Nintendo comes out with a Wii U 2 that's actually a significant step in hardware.
 
Satchel said:
Comments like this baffle me. Are you a gamer? Or just a Sony fanboy?

As a teenager, yeah, I was a pretty hardcore Segabot, but even I moved on when Sega went down. Hell, despite hating Sony for a while (I blamed them for Sega dying lol) I still bought a PS2 at launch. Because regardless of what my favorite console is, I still love playing great games. I may not think much of the Wii for example, but I couldn't imagine not playing the latest Zelda or Metroid that comes out.

So yeah, if there was no PS4, that might suck a bit, but as long as those games end up somewhere, then it's all good. Consoles are a delivery system for games remember. So as long as those IPs end up somewhere, then it's all good. I can get almost all my beloved Dreamcast games in some fashion on Wii, 360, PS3 and PS2. So I'd like to think if Sony went down, they'd stick with software or at least sell their IPs to Microsoft or Nintendo.
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Either one of those scenarios are nightmare scenarios for Sony's studios and IPs since MS and Nintendo have little interest in core gaming and supporting publishers. Plus the biggest advantage they have staying under Sony on their own system is to pump out these unmatched graphics on consoles but also keeping a lot of their creative freedom. You know MS wouldn't let that happen. They'd probably turn Naughty Dog into a Kinect or Halo studio.

So yeah I'd probably end up being a PC only gamer too. We'll see how next gen plays out but as of right now MS and Nintendo have nothing to offer me as a gamer.
 
Sony leaving is pretty much how many of us just hopped around when Sega fell apart or when IP's left Nintendo consoles. We just followed where the games went.

The bigger issue is what is the resulting collateral damage that will occur if Sony bails out.
 
Triple U said:
The PS3 has been the best selling console for two consecutive years and could possibly hit 100mill consoles sold by the end of it(so could the other two). Something that never get thrown out but has to be factored in is that they have also sold 50+mill PS2's since PS3 launched.
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2011

360 14.9 Million units
PS3 14.1 Million units
 
Good article but theres some BS, the engineer hate is overblown, every other successful company credits its engineers for its hit products, but here is all poor little executives being beaten by angry dumb engineers, yeah right

I remember the original PSP prototype was going to use MS, but Sony added the UMD because the media division wanted to sell movies for it, so the console was now more expensive, heavy, easier to break and have less battery life because of a decision that didnt work because nobody was going to buy the same movie again to watch it on a handheld.

The reason Sony took so long to launch something like the iPod is because the music division plain HATED MP3s, I remember many digital players prototypes shown by sony during the 90s, those were obviously cancelled by the media executives.

To say that sony's multiple formats are solely because of anal engineers is plain stupid, its well known that was a cheap moneymaking strategy from the executive branch. Sure the betamax had the whole quality thing, but after that it was all about getting buyers locked-in so they couldn't use non-sony media in sony products.

Now phones, do they have any engineers on that? because Xperia phones feel like something out of a designer's portfolio that doesnt knows anything about materials or good craftsmanship, because the plastic is bad, the build is bad, the overall quality is bad and the specs are plain awful. When Meizu a completely unknown chinese company can launch a phone thats 100x better that means Sony doesnt knows what is doing.

TBH I dont think engineers have any liberty at sony, all their products have that tryhard marketing feel from people who dont know anything about hardware and merely copy what others are doing.

I do agree that the PS3 was the moment Sony jumped the shark, but IIRC a lot of the cost had to do with Sony trying to subsidize the CELL to break into the server business, so I wonder who's really at fault here.
 
I'm not concerned about Sony's gaming division at all. Yes, there's no question that the ps3 was a huge failure for Sony, but that's in the past; what matters now is that Sony resolved many issue that caused the ps3 to bleed so much money from the company and they are now turning hundreds of millions in profit on the division. PS3s disaster could have easily crippled the gaming division to the point where it was unrecoverable. But sony made the right decisions to bolster their first parties and improve their online capabilities while slashing the cost of thr ps3. As a result, I think it's pretty safe to say that the gaming division isnt going away anytime soon. Sure, other divisions in Sony need significant downsizing or restructuring but that doesn't effect me as a fan of their gaming products mostly.

Ps4 should have a very strong footing if they have learned anything from the mistakes of the ps3, which I believe they have. Theyre currently the best selling console worldwide, and their ps3 business should provide steady profits from emerging markets as the system gets cheaper in price.
 
SgtCobra said:
From what I've been reading the PS3 has been surpassing the 360 for some time now (although not by much)
What's your source?
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Those are he shipment figures for the 2011 calender year. When people say the PS3 outsold the 360 the last two years they are talking about fiscal years.
 
James Sawyer Ford said:
I'm not concerned about Sony's gaming division at all. Yes, there's no question that the ps3 was a huge failure for Sony, but that's in the past; what matters now is that Sony resolved many issue that caused the ps3 to bleed so much money from the company and they are now turning hundreds of millions in profit on the division. PS3s disaster could have easily crippled the gaming division to the point where it was unrecoverable. But sony made the right decisions to bolster their first parties and improve their online capabilities while slashing the cost of thr ps3. As a result, I think it's pretty safe to say that the gaming division isnt going away anytime soon. Sure, other divisions in Sony need significant downsizing or restructuring but that doesn't effect me as a fan of their gaming products mostly.

Ps4 should have a very strong footing if they have learned anything from the mistakes of the ps3, which I believe they have. Theyre currently the best selling console worldwide, and their ps3 business should provide steady profits from emerging markets as the system gets cheaper in price.
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I'm pretty sure the most recent reports showed the gaming division losing money again. They maybe selling more consoles by a little bit right now but as a whole( hardware, software, services like XBL/PSN) are they making more money in the industry then the competition?
 
EagleEyes said:
I'm pretty sure the most recent reports showed the gaming division losing money again. They maybe selling more consoles by a little bit right now but as a whole( hardware, software, services like XBL/PSN) are they making more money in the industry then the competition?
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After they merged it with the rest of the electronics? Did we get numbers for the game division alone?
 
EagleEyes said:
I'm pretty sure the most recent reports showed the gaming division losing money again. They maybe selling more consoles by a little bit right now but as a whole( hardware, software, services like XBL/PSN) are they making more money in the industry then the competition?
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The only known figure we have for the gaming division is 375 million for all of 2011. The tiny loss reported last quarter included other areas and not just gaming. Even if that loss was attributed to gaming last quarter, most of their money is made from the holiday quarters. So Sony could still turn hundreds of millions in profit for the year even if they lost a marginal amount one quarter.

As for making more for the competition it's hard to know because Microsoft also obfuscates their gaming division with other divisions, but they are making more than Nintendo right now.
 
Man, I love Sony's mix of excellent hardware and I love what they bring software-wise (from the quirky creative stuff to the mature stuff). If they died it would suck big time. Microsoft and Nintendo bring their own unique stuff but I don't think either is as close to the complete package as Sony is to me. Though I own all systems Sony is the one company that covers all of the bases for me.
 
The Crystal LED stuff looks interesting. If the result of that is that they make a television that actually reaches mass market prices before OLED then it would be a big win right?
 
James Sawyer Ford said:
As for making more for the competition it's hard to know because Microsoft also obfuscates their gaming division with other divisions, but they are making more than Nintendo right now.
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Microsoft's entertainment division obfuscates things to hide the losses of other ventures behind the 360's profits. If anything, the Xbox business is more successful than the entertainment division numbers would indicate.

In the US, We know that retail spend on 360 has been more than the other two platforms combined recently. And I think it's a foregone conclusion that Microsoft makes more with their digital offerings.
 
Sony needs to drop at least half of their products and focus on the products that are actually great.
Their keynotes on products are laughable.
 
GavinGT said:
Microsoft's entertainment division obfuscates things to hide the losses of other ventures behind the 360's profits. If anything, the Xbox business is more successful than the entertainment division numbers would indicate.
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Not disagreeing with that. I think the same thing is happening with Sony right now
 
James Sawyer Ford said:
Not disagreeing with that. I think the same thing is happening with Sony right now
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What else is included in their gaming division? I honestly don't know. I know last year gaming it was folded into the Networked Products & Services division, but I thought they changed it back this year to just the Game division.
 
SgtCobra said:
From what I've been reading the PS3 has been surpassing the 360 for some time now (although not by much)
What's your source?
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Source is Sony and Microsoft. Those are official shipment figures.


Metalmurphy said:
After they merged it with the rest of the electronics? Did we get numbers for the game division alone?
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04_image.jpg
 
Sony's biggest problem to me has always been it's marketing...I feel they rely to heavy on "word of mouth". I could be wrong tho
 
It's sometimes disheartening to think you have to shove the games down the people's throats for them to take notice.. can't people research upcoming games themselves? I realize we're a bunch of lazy monkeys who are too lazy to do or find anything if it isn't presented to us on a silver platter with constant tv ads and billboards up in times square.. but come on.

Sony doesn't market things super heavy but I guess they should start considering the current lazy state of the culture.
 
Mastodonkey said:
It's sometimes disheartening to think you have to shove the games down the people's throats for them to take notice.. can't people research upcoming games themselves? I realize we're a bunch of lazy monkeys who are too lazy to do or find anything if it isn't presented to us on a silver platter with constant tv ads and billboards up in times square.. but come on.

Sony doesn't market things super heavy but I guess they should start considering the current lazy state of the culture.
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Some people aren't super hardcore fans like us.

Why have ads at all if people can just do research?
 
That is how today's society is. The game has to basically be forced everywhere you go to get any traction in society at this point.
 
not_so_special said:
yeah..just a bit

Sony out of the game is a disaster ,no matter how much you hate them,its no "a bit"
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I dont hate Sony, at least not anymore. As I said in my post, back when the Dreamcast was killed off I had a lot of immature fanboy hate for them. But, I was like, 20-21 then.

But no, Sony going out of gaming wouldn't be a disaster. Same way Sega leaving wasn't. World goes on.

This "Microsoft and Nintendo are all about casuals" thing is a myth perpetuated on GAF.
 
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