Evil Calvin
Afraid of Boobs
Analysts, Execs and shareholders will kill this industry. Well......it's obvious it's started.....with barren releases of games, rising costs and layoffs when lofty expectations aren't met.
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Sony’s stock value drop by about $10b after lowering PS5’s sales forecast for the fiscal year, analysts question near decade-low profit margin
- Thread starter ArtHands
- Start date
Evil Calvin
Afraid of Boobs
Maybe Sony should quit spending millions on R&D, marketing and production of pointless flops like PSVR2 and Portal.
S0ULZB0URNE
Member
Portal been selling good.
Yea, more fake news from the console warriors at
…CNBC
Take off those green glasses.
{insert code here}
Member
Stop dumping 300M and 6yrs of development time into each game and you might see better margins. Spiderman was going to sell 20M regardless of how bleeding edge the graphics were because everyone knew the game was going to be good.
tmlDan
Member
Portal is sold out...
thicc_girls_are_teh_best
Member
Oh for sure facts, a lot of them don't care and in fact WANT that to happen.
It just gets easier and easier to read between the lines with them when they keep saying the same thing in face of conflicting data.
They had less big 1P releases in FY 2023 (Spiderman 2 was it really, aside Burning Shores (add-on/expansion) and MLB The Show) vs FY 2022 (HFW, GT7, GOW Ragnarok). 3P also had less big hits (Warzone 3 was a decline vs. prior year's COD, Harry Potter did strongly but about on par with Elden Ring or a bit better).
No duh gaming revenue and profits 1P-wise (and even 3P-wise) would be lower for FY '23 vs. FY '22, even for YoY just looking at the fiscal quarters. So I don't think sales were less than expected on 1P side, after all Spiderman 2's already sold 10 million (almost 20% of all PS5s available, that's a high attach rate for vast majority of games). And that game didn't have the benefit of cross-platform the way GOW Ragnarok did.
Unknown Soldier
Member
Sony is a Japanese company, now compare it to the performance of the Japanese stock marketMarch 2020 was the recent low for the market in general, since then the Nasdaq, which is a good indicator for the overall market, is up ~130% .
Sony is up ~ 72% for the same time period
Most would say that the stock is underperforming considering the performance of the overall market. You can check the DOW and S&P as well.. the numbers are similar
It turns out Sony is one of the best performing Japanese companies in terms of share price, because the Japanese stock market literally spent 30+ years doing nothing until recently
What I'm saying is if you want to make money, buying Japanese company stock is a bad idea
DeltaPolarBear
Member
Sony is the opposite of Microsoft in terms of their gaming division to the company as a whole.
As in, PlayStation is doing great, but the entire rest of Sony is struggling. Sony is not geniuses, they made plenty of mistakes.
As in, PlayStation is doing great, but the entire rest of Sony is struggling. Sony is not geniuses, they made plenty of mistakes.
ReBurn
Gold Member
Other parts of Sony are doing very well this year and every part seems to be profitable. Music seems to be on fire. Financial services not so much.
StreetsofBeige
Gold Member
People arent suggesting Sony sell off their financial unit. They are doing it. The are trying to sell off 80% of it, and use the money towards entertainment divisions. That financial unit I believe is consistently profitable, but not a grower. So spin it off so they can focus on more entertainment divisions. They'd actually been looking to do this since last year.
Sony is trying to consolidate the parent company into an entertainment company. So as you said VAIO is gone long time ago. Financial services now. In time that low margin TV and BR player division will be too. It might be entertainment, but it's low margin. Then again, it might be close enough to keep it around as movies and TV shows link up with TVs and home audio.
Sony to Relist Financial Unit on TSE in Oct. 2025
Sony Group Corp. said it will spin off and list the Sony Financial Group Inc. unit again on the Tokyo Stock Exchange in October 2025. In May last year, Sony Group already announced its plan to split...
www.marketscreener.com
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nial
Gold Member
Shawn Layden was CEO of Sony Interactive Entertainment America, so practically nothing when it comes to software development (or most things, really). Yeah, he was also chairman of SIE WWS Global, but come on, we know Shuhei Yoshida did most of the work there.
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nial
Gold Member
You believe Lin Tao, SVP of Finance, will get that role, right?
I don't believe so, I think Totoki was clear with his message (if you're not being productive, fuck off).
DavidGzz
Member
Only MS gets bad news threads here? lol, don't be so salty.
kungfuian
Member
Some of this has to be due to delays in their 1st party output. Based on their recent/projected 1st party output vs. the number of studios they have, it's obvious many of their projects have been in the oven for a long long time. This expense would usually be offset by a nice cadence of releases each year, but the pandemic has cause a delay in that pipeline, and as a result they have been spending like crazy to develop games but very few are ready for release.
Of course there are other factors but this has to be impacting their margins and will until they can start getting those big games out the door.
By the way this is not to imply they have not delivered as far as good exclusive content, because they have done a great job aligning themselves with exclusive 3rd party games to offset this reduced output. But from a dollars and cents perspective their margins will probably remain poor until they actually release more of these big games to recoup the development costs.
Of course there are other factors but this has to be impacting their margins and will until they can start getting those big games out the door.
By the way this is not to imply they have not delivered as far as good exclusive content, because they have done a great job aligning themselves with exclusive 3rd party games to offset this reduced output. But from a dollars and cents perspective their margins will probably remain poor until they actually release more of these big games to recoup the development costs.
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twilo99
Gold Member
I get it…yes, under performing this moment. But all it takes is a game announcement or a pro official announcement to change that tune. People catastrophize literally everything these days. Shit fluctuates like any other stock. The fact that some are trying to paint a picture like “Sony is done”, or “PlayStation is dead” is insane to me. I’ve see uneducated people comment on things around here for a very long time…but when it comes to the stock market, whether it be Nintendo, Sony, or Microsoft, it’s wild to me how little people really know, and they are just talking to talk because their favorite company isn’t the one involved
Edit - to add. People are discounting Sony because the my said a “existing franchise” isn’t releasing a new game before FY 2025. What’s that even mean??
Here’s the answer…share holder talk.
Sony is still performing well and it’s not going anywhere, I was just pointing out that their stock price isn’t doing anything special, it’s just following the general market trend while underperforming overall.
It doesn’t mean much, like you say, it can change very quickly.
Mibu no ookami
Demoted Member® Pro™
As of right now, I'd say she is more likely than Eric Lempel or Hermen Hulst, but I'm not sure it would be a great choice, but I also don't know that there is a great choice.
The next CEO of SIE needs to understand the following
- Multiplatform is key to profit margins
- This doesn't just mean releasing games on PC, it means releasing a handheld that increases game margins and sales, in fact I think a handheld is far more important than PC
- It also means creating a PC Storefront
- This doesn't just mean releasing games on PC, it means releasing a handheld that increases game margins and sales, in fact I think a handheld is far more important than PC
- Transmedia is the key to higher exposure and higher sales per title
- That SIE desperately needs not only AAA titles but diversity in titles
- That GaaS is necessary to maintain revenue and cash throughout the year.
- That growth through acquisitions is fundamental to SIE's survival in the industry, but that type of growth must focus on portfolio diversification and not cannibalize existing software sales.
Does Lin Tao understand all of that? I have no idea. I do know that she worked for current Sony Group CEO Kenichiro Yoshida and that she probably has the best understanding of SIE's financials and the M&A team probably reports up to her. She's also experienced Sony being outpaced in the mobile phone sector, whether she was involved or responsible for that, I wouldn't know.
I just think that if it was Eric Lempel, they would have promoted him already.
They could also go with the first external CEO or they could bring in someone from other parts of Sony Group.
RickMasters
Member
Returnal especially is a good example here. It may not have the budgets of bigger games but through art direction and raw mechanics it stays engaging. I’d certainly like to see more of this sort of game throughly the industry.
Mibu no ookami
Demoted Member® Pro™
Good watch to get a sense of who Totoki is and how he thinks.
Mibu no ookami
Demoted Member® Pro™
My guess is that Totoki is planning generally 10% across the board cuts at all Studios (likely dependant on current profitability and potential) and planning on closing a studio or two.
Studios that are likely to be closed: Media Molecule and London Studio. With runners up being Bend Studio
Studios that are likely to be closed: Media Molecule and London Studio. With runners up being Bend Studio
nial
Gold Member
I'm not sure if SIEE would be comfortable with shutting down its internal development operations (London Studio is a department rather than a subsidiary like Media Molecule), but the other two are the most likely if their next projects end up being big wastes of money, yes.
Barakov
Gold Member
That's not surprising. Weren't they making landfill size amounts of money on Fate Grand Order? After seeing that kind of money it's hard to let it go.
bender
What time is it?
It's amazing that Media Molecule has made it this long, tbh.
StreetsofBeige
Gold Member
Going by Sony's earnings reports since I skimmed them going back to 2016 when I did a recap chart, if I was Sony I'd first look into slashing products and people from that Entertainment & tech division (TVs, audio, mobile stuff).
Never mind the giant losses they had 10 years ago when the division had billions of losses. The past 6-7 years of earnings that division is still a dog. Usually it makes hardly any money. If it squeaks out 5% margin that's an achievement itself.
Mibu no ookami
Demoted Member® Pro™
You could make a similar argument about Japan Studios, yet here we are.
You are thinking of Sony Music not Sony Mobile. The headline there is not the story, more so the layoffs Totoki put in place to "save" the company. Spoiler, it didn't. Not sure whether it's fair to blame him, but Sony Mobile took a massive tumble after he got there.
I agree, however it is key to note that every game Media Molecule has released has been well received.
There will likely be cuts to all areas of Sony, but I don't think SIE will go untouched (they already haven't, you're seeing hiring freezes and layoffs already, just not at a super large scale).
If cuts result in a degradation of product, they haven't really achieved what you hoped. That's why you should always churn your staff rather than do layoffs.
bender
What time is it?
That hasn't always translated to sales and that seems to be at the forefront of Sony's leadership these days. I admire MM's work and that Sony has stuck with them for so long, but it wouldn't surprise me if we hear they are being shuttered any day now.
Ozzy Onya A2Z
Member
Mibu no ookami
Demoted Member® Pro™
If you keep making good games and it increases your general prestige and you don't cost too much money, there isn't a lot of reason to shut you down.
ICO Team didn't make them a ton of money, but they garnered a lot of attention. It wasn't until Last Guardian and the delays and the ultimate quality of the game that caused ICO Team to essentially be let go.
nial
Gold Member
Not at all. Team Asobi is a department inside of SCEI, they're not like Polyphony Digital (a subsidiary).
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sonyinteractive.com
bender
What time is it?
Not really talking about Team ICO. Sony just seems more cut throat these days. Clap Hanz always brought a quality title or two every generation and while they had modest sales, their team size and development costs are probably a fraction of MMs so it's hard to imagine them not being profitable, but they've moved on to IOS/Switch.
Mibu no ookami
Demoted Member® Pro™
Not at all. Team Asobi is a department inside of SCEI, they're not like Polyphony Digital (a subsidiary).
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I said Japan Studios not Polyphony Digital.
cash_longfellow
Member
Oh, I gotcha. I actually misread your initial reply as you implying that they were failing, that was the other person I was replying to about it before my response to you, sorry about that, I got overly passionate for a second lol
Mibu no ookami
Demoted Member® Pro™
That was their choice more than Sonys. They wanted to create games for other platforms because sales were drying up on the PS4. If Sony had a handheld, they might still be making PlayStation games.
bender
What time is it?
Got a source for that?
nial
Gold Member
I think you're misunderstanding me. Team Asobi, much like Japan Studio, is part of SIE JP's internal development operations, so they don't have to solely rely on Polyphony Digital, a subsidiary, for Japanese in-house content.
I don't see where this is true.
Mibu no ookami
Demoted Member® Pro™
Clap Hanz Interview: Bringing ‘Easy Come Easy Golf’ to Switch, a Potential Steam Release, Chances of a Physical Version, and More – TouchArcade
It has been nearly two years since Easy Come Easy Golf (previously Clap Hanz Golf) released on Apple Arcade. I spoke to the team at Clap Hanz then about the game, working with Apple, the developer's first release outside PlayStation, and more.
toucharcade.com
Mibu no ookami
Demoted Member® Pro™
I said they might shut down London Studios and you said they wouldn't shut down a department, so I cited Japan Studio.
bender
What time is it?
Clap Hanz Interview: Bringing ‘Easy Come Easy Golf’ to Switch, a Potential Steam Release, Chances of a Physical Version, and More – TouchArcade
It has been nearly two years since Easy Come Easy Golf (previously Clap Hanz Golf) released on Apple Arcade. I spoke to the team at Clap Hanz then about the game, working with Apple, the developer's first release outside PlayStation, and more.
That's PR fluff and general politeness.
Mibu no ookami
Demoted Member® Pro™
So you don't like that their is a source, so you want to keep assuming that you're right...
bender
What time is it?
It's fine that their is a source but it really doesn't tell you anything about what happened between Sony and ClapHanz. In PR, it's easy to answer questions without answering questions. If that's me "assuming I'm right", so be it. Don't take things so personally, duder.
nial
Gold Member
I said this.
Sorry if I wasn't being too clear, but what I meant is that I don't see them shutting down London Studio without having a new studio department as a replacement (so that they're keeping their internal development operations going).
Mibu no ookami
Demoted Member® Pro™
Why did you even ask for a source if you weren't going to accept it.
Tells me a lot about you.
Mibu no ookami
Demoted Member® Pro™
Not sure what they would be replacing. London Studios really hasn't done much of anything in years.
bender
What time is it?
Because I wanted to read what you were referencing. I read it and took it for what is worth.
And what does that tell you about me, pray tell?
nial
Gold Member
Well, they went from VR development to GaaS, so I wasn't expecting much of them being shown anytime soon. Especially with Bungie's live service center of whatever that most likely slowed down everything.
Killjoy-NL
Member
Iirc the idea to bring Playstation games to PC was his.Remember Shawn Layden?
He has been warning them for years.
He also said he thinks Sony will never bring their games to PC day 1.