Bryank75
Banned
At the beginning of February Sony was on the 'up and up' hitting 116.71 dollars per share, however just a mere month and a half later it has plummeted to nearly 100 flat. This translates to a loss of approximately 20 billion on their market cap, coming from almost 145 billion on February 5th.
Much of this loss was explained by publications as investors 'locking in' their gains as they feel the gaming boom due to the virus and lockdowns has run its course and they expected higher profits than were reported (3.22 billion from PlayStation / over 10 billion for Sony)
A few days ago Sony announced a stock buyback of 1.8 billion of stock to make up for not meeting profit expectations, yet despite this the stock fell even further in the days since, in fact it fell at an even more precipitous rate.
finance.yahoo.com
My commentary;
Recent business decisions from Sony have smacked of short-term-ism, a stock buyback will only raise the share price for a very short period and the 1.8 billion in cash will have been lost permanently, they might as well throw the cash away or make a bonfire out of it because they all end in the same outcome.
Most recent investments are very poor uses of money, a 450 million investment in Epic games, who is already 40% owned by Tencent.
Supposed investments in internal growth.... details followed that much of this was for a new mobile studio inside PlayStation.
Closing most of Japan studio and a massive lack of Japanese representation with PlayStations management structure. Despite Jim Ryan saying that PlayStation is now a global brand it feels less global than ever. Niche games focused on the Asian market made it feel more international, not less.
PlayStation revenue recently passed 25 billion dollars, a huge milestone but do not be distracted, PlayStation should be at 50 Billion dollars in revenue per annum.
There is a catastrophic management failure at Sony and PlayStation, Sony remains content to sit on 45 billion dollars and make wishy-washy investments that lead nowhere. While Microsoft makes decisive investments..... like buying Minecraft an evergreen game that prints money and boosts their otherwise floundering gaming division, this was a masterstroke by Xbox.
More recently Microsoft bought Bethesda for 7.5 billion, coupled with the previous purchase of Obsidian, it gives Xbox almost a monopoly on the biggest western RPG's and is another great addition to Xbox, it further boosted their revenue with sales of legacy titles on all platforms.
PlayStation now have a target of over 27 Billion in revenue for 2021 but this should really be 30 Billion plus. The industry is full of potential strategic moves they could make but management are instead being distracted by mobile and cloud gaming.
PSNow is being constantly advertised, it is obviously a massive focus for the new management at PlayStation but they are so aloof and have so little understanding of their customers that they are investing in areas that will see absolutely no growth. The PSNow figures were not published in the latest financial statements or press releases, quite amusingly.... despite massive expenditure on advertising it.
PlayStation and Sony need to refocus on the hardcore, high spending customers that they built their business on, price their games more appropriately... as marketing is focused at launch, they need to get as many people in as possible in the first week. 70 dollar and 80 euro prices on new IP's are not going to fly no matter how high they score.
They need their own Minecraft, an evergreen game that constantly brings in money.... this could have been Roblox (a company they knew about for years before it became this big) but they again let that opportunity pass them by.
They also need more first party studios, in actuality PlayStation only have about 6 studios making AAA commercial games.... Naughty Dog, Insomniac, Sucker Punch, Guerrilla Games, Santa Monica Studio and maybe Bend Studio.
Excellent studios but not sufficient to service a growing userbase.
PC is a competing platform, every game published there by PlayStation is a self-defeating move that undermines decades of work. Every effort should be focused on PlayStation and console gaming.
Much of this loss was explained by publications as investors 'locking in' their gains as they feel the gaming boom due to the virus and lockdowns has run its course and they expected higher profits than were reported (3.22 billion from PlayStation / over 10 billion for Sony)
A few days ago Sony announced a stock buyback of 1.8 billion of stock to make up for not meeting profit expectations, yet despite this the stock fell even further in the days since, in fact it fell at an even more precipitous rate.
Sony Plans $1.8 Billion Buyback As Profit Misses Estimates
(Bloomberg) -- Sony Group Corp. said it will buy back up to 200 billion yen ($1.8 billion) of its own shares after reporting quarterly profit below expectations.Operating profit in the March quarter was 66.5 billion yen, versus the 74 billion yen consensus among analysts. The company sold 3.3...
finance.yahoo.com
My commentary;
Recent business decisions from Sony have smacked of short-term-ism, a stock buyback will only raise the share price for a very short period and the 1.8 billion in cash will have been lost permanently, they might as well throw the cash away or make a bonfire out of it because they all end in the same outcome.
Most recent investments are very poor uses of money, a 450 million investment in Epic games, who is already 40% owned by Tencent.
Supposed investments in internal growth.... details followed that much of this was for a new mobile studio inside PlayStation.
Closing most of Japan studio and a massive lack of Japanese representation with PlayStations management structure. Despite Jim Ryan saying that PlayStation is now a global brand it feels less global than ever. Niche games focused on the Asian market made it feel more international, not less.
PlayStation revenue recently passed 25 billion dollars, a huge milestone but do not be distracted, PlayStation should be at 50 Billion dollars in revenue per annum.
There is a catastrophic management failure at Sony and PlayStation, Sony remains content to sit on 45 billion dollars and make wishy-washy investments that lead nowhere. While Microsoft makes decisive investments..... like buying Minecraft an evergreen game that prints money and boosts their otherwise floundering gaming division, this was a masterstroke by Xbox.
More recently Microsoft bought Bethesda for 7.5 billion, coupled with the previous purchase of Obsidian, it gives Xbox almost a monopoly on the biggest western RPG's and is another great addition to Xbox, it further boosted their revenue with sales of legacy titles on all platforms.
PlayStation now have a target of over 27 Billion in revenue for 2021 but this should really be 30 Billion plus. The industry is full of potential strategic moves they could make but management are instead being distracted by mobile and cloud gaming.
PSNow is being constantly advertised, it is obviously a massive focus for the new management at PlayStation but they are so aloof and have so little understanding of their customers that they are investing in areas that will see absolutely no growth. The PSNow figures were not published in the latest financial statements or press releases, quite amusingly.... despite massive expenditure on advertising it.
PlayStation and Sony need to refocus on the hardcore, high spending customers that they built their business on, price their games more appropriately... as marketing is focused at launch, they need to get as many people in as possible in the first week. 70 dollar and 80 euro prices on new IP's are not going to fly no matter how high they score.
They need their own Minecraft, an evergreen game that constantly brings in money.... this could have been Roblox (a company they knew about for years before it became this big) but they again let that opportunity pass them by.
They also need more first party studios, in actuality PlayStation only have about 6 studios making AAA commercial games.... Naughty Dog, Insomniac, Sucker Punch, Guerrilla Games, Santa Monica Studio and maybe Bend Studio.
Excellent studios but not sufficient to service a growing userbase.
PC is a competing platform, every game published there by PlayStation is a self-defeating move that undermines decades of work. Every effort should be focused on PlayStation and console gaming.
