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Are the 35 million profit from product sales, or is it "fake" profit as in hypothetical currency exchange?

 

[zomgbbqftw]

Indeed it does. But I wonder why the executive wouldn't answer the supplemental question about whether the Game division would have been profitable without PS4 development costs.

http://seekingalpha.com/article/159...-2013-results-earnings-call-transcript?page=6



This leads me to believe that PS3 + Vita overall performance is such that the PS4 is absolutely necessary at this point in time.

He's not hiding any losses on the PS3/Vita side, it's more masking the true development costs for PS4. If he gives an indication of the profitability of the division without PS4, then it kind of gives away their PS4 development costs, which is something they won't want to do.

Are the 35 million profit from product sales, or is it "fake" profit as in hypothetical currency exchange?

Real money.

 

[gofreak]

He's not hiding any losses on the PS3/Vita side, it's more masking the true development costs for PS4. If he gives an indication of the profitability of the division without PS4, then it kind of gives away their PS4 development costs, which is something they won't want to do.

Yeah, the questions were really trying to drive at splitting out the R&D cost of PS4. He was loathe to give figures directly so I think he was being very careful not to give figures indirectly either...

 

[silenthill1979]

Yes Sony made $35. They bought a game on PSN and a few beers with their income, and still had a few dollars left over

Lol. Damn you Chuck, you made me chuckle so hard. In the train..

 

[medrew]

I think a factor is that the PS4 is going to be sold for below cost, so the pre-payments they make would be at a higher level than any inventory they take on. That needs to be accounted for. Plus IP rights payments to the likes of AMD and others would have to paid for up front.

Not just that, but Sony could be paying for manufacturing capacity they aren't using right now, essentially to ensure they have enough for when they do need to ramp up. If you look at the intersegment sales they are slightly elevated which means SCE is paying the electronics/manufacturing division for something.

Finished goods would be revalued at the lower of cost or net realisable value.
Sony would not be individually re-costing all the materials in the the PS4's bill of materials. I would imagine a fair amount of the raw materials are components that are general and can be used in other products or they could be re-sold on the open market for a comparable price (even if they did revalue the components it would only be for those they had booked during the period). Again accounting stipulates that inventory is at the lower of cost or net realisable value. The components would have to be at a new open market value lower than Sony had arranged their fixed price at.
Revaluation I would presume, without inside knowledge of Sony's accounting, would be on the grouped finished goods themselves. This would only be when Sony has finished stock of PS4's and the effect would be shown on a per unit basis. I.e. the carrying value of stock would be lower than their cost.

IP rights might paid up front but they would be amortised/expensed over the life of the PS4. Accounting works on an accrual basis.

I take no interest in intersegment sales. That might just be because of a sweeping change in transfer prices for the new financial year (particular impactful if they made a change based on the Yen depreciation). Sony has an incredible number of tax accountants on their books.

 

[spwolf]

Shares are up 4% pre-market on low volume. Beating the revenue forecast and operating profits forecast will have helped.

i have wonder how come Sony pays $270 million in taxes on Income before taxes of 467 million? Their tax situation is weird, they pay a lot of taxes.

 

[spwolf]

His aggressive smartphone push is very important too.

he pushed for good products everywhere... great mobiles, great tablet, great TV's, great vaio's, great camera's, etc... sony didnt have better product lineup in years if not a decade.

last year there were few good products, but lets say in 2011, i wouldnt have bought any Sony product except for PS3.

sure Sony always had good top end product, but mid and low entry were crappy... these days their lower end TVs look great and get good reviews... so no wonder they made money on them.

it can only get better next year.

 

[leehom]

he pushed for good products everywhere... great mobiles, great tablet, great TV's, great vaio's, great camera's, etc... sony didnt have better product lineup in years if not a decade.

last year there were few good products, but lets say in 2011, i wouldnt have bought any Sony product except for PS3.

sure Sony always had good top end product, but mid and low entry were crappy... these days their lower end TVs look great and get good reviews... so no wonder they made money on them.

it can only get better next year.

The price on their TV's are priced more competitively as well. Waiting for the next year models to come out so I can snag a 55" W9xx for under $1,600 (currently $2,200).

 

[spwolf]

The price on their TV's are priced more competitively as well. Waiting for the next year models to come out so I can snag a 55" W9xx for under $1,600 (currently $2,200).

they are both priced better and have better looks and performance.... last year when I went to the tv store to look at the tv's, Samsungs and LG's looked a lot nicer with tiny shiny bezels while Sony's looked "monolithic".... now all of Sony's are easily at the top or tied for the best looks in the class.... even cheap R4's look great.... previous B series looked like crap.

 

[Bundy]

As I can't make a new thread:

SONY rejects bid to sell off its entertainment divisions

Unanimous rejection by Sony board members to mooted sell-off, which included PlayStation.
Sony has rejected a bid to sell off it entertainment division, led by an activist shareholder interested in boosting the fund for its electronics arm.
US shareholder Daniel Loeb, and his company Third Point, had proposed that the electronics and media giant sell parts of its film, TV and music business – constituting around a fifth of its entertainment interests, including its PlayStation division – in a move to increase cash for its core electronics arm.
However, Sony's board has unanimously rejected the proposal, and today issued a statement to Third Point, emphasising the growing value of owning entertainment content in today’s digital and connected world.
It also said that it believes that maintaining total ownership of its divisions encourages internal collaboration and efficiency.
“Sony’s Board and management believe it has adequate capital resources to fund its business plans,” the letter read.
“Should Sony require capital, or in the event of unanticipated events, the company’s priority would be to raise capital without selling a portion of an asset fundamental to the growth strategy, and without unnecessarily burdening Sony’s ability to execute its business strategy for both entertainment and electronics.”
Sony CEO Kazuo Hirai added: “We are encouraged by our progress as we continue to execute on our One Sony strategy. We have made many changes during my tenure as CEO, and we are confident that we are on the right path.
“Sony's entertainment businesses are critical to our corporate strategy and will be important drivers of growth, and I am firmly committed to assuring their growth, to improving their profitability, and to aggressively leveraging their collaboration with our electronics and service businesses.”
Even so, Loeb has shown that he intends to pursue his campaign and engage in further talks with Sony. “Third Point looks forward to an ongoing dialogue with management and intends to explore further options to create value for Sony shareholders.”

Link

 

[jaxpunk]

I've been told I need to diversify my bonds, is this the right place to do that?