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[DarkChild]

How can Sony continue to lose money on TVs? 7 years in a row? If I were them I would have either turned things around by the 3rd year or exited the TV market.




That doesn't stop Samsung from making lots and lots of profits.

Thats because their TV's, in comparison with Samsung's, are not so good, plus they are pricey.

 

[djplaeskool]

Kaz: "Challenge Accepted"

 

[Miles X]

The only worldwide 360 software number I can find is shady at best. It's old, it's from Wikipedia, the link is expired, and there's no trace of Microsoft putting out the number themselves. Still, it claims 353.8 million software units sold as of December 2009. Referencing the OP in this thread, Sony claims they were at about 260 million at that time. Extrapolating that out, it wouldn't be a stretch to say that 360 is still comfortably in the lead. Also, as if there was any doubt that 360 has been leading in at least U.S. software sales, Gamasutra provided this estimate in June 2011:

Thanks for the graph, am I getting this right, mid 2008 when the 360 userbase was at 10.3m ish, it was selling more SW than PS3 at 17m this june gone was? wow

 

[DarkChild]

So what other technology should they have used instead? It's easy to say that it was expensive but what where the alternatives?
It's only logical that they used Bluray, it established Bluray as the next gen standard and opened up a new revenue stream which in the end is far more important than the few bucks saved if they had opted for something cheaper.

Microsofts HDDVD add-on was a disaster and it would have been the same with Bluray so there was no other option than to put it right in.

From a consumer point of view there's even less debate whether it was a good choice or not.

You mean, few billion bucks?

 

[faridmon]

This have to include the money spent on R&D for Vita and marketing it as well. A loss was expected, but this might a big one. However, it isn't so bad as it sound like. Didn't they lose money when the PS2 and the PS3 launched?

 

[Road]

Sony Discusses F3Q11 Results (Seeking Alpha)

Nico Yura – CNBC

CNBC, Nico Yura, somewhat an abstract question. The end of the year, Christmas season of course, had been affected by Thai flood and the other factors, so how would you reflect back the performance of the end of the year Christmas season? And as you go towards the very end of the fiscal year, what are your prospects?

Masaru Kato

Christmas season, the different markets have different sets of conditions, competition and, of course, there was the supply side implication caused by Thai floods. So there were many factors intermingled. But consequently, what we thought would happen as we started the third quarter, we believe that the actual results were below what we had expected at the beginning of the third quarter caused by a multiplicity of factors. Digital cameras, for instance, we were quite hopeful because there were some award-winning models, but those models were affected where we had to delay the launch of new models so we could not capitalize on the Christmas shopping spree.

So overall, in retrospect, I believe the actual were below what we had expected to achieve, somewhat. The fourth quarter, I talked about for the entire year compared to the November forecast that we would downward revise our forecast by ¥100 billion. This is because of the poor economy in the advanced nations. Our products like PlayStation 3, the sales trend is quite firm, but it was nevertheless affected by the Thai flood. The destruction of supply chain adversely affected the PlayStation. So as is shown in your materials, we have reduced our forecast by 1 million units for the entire year. Other categories, VAIO, digital cameras, we are a little more conservative than we were before.

Not sure if it makes any sense, though.

 

[GavinGT]

Thanks for the graph, am I getting this right, mid 2008 when the 360 userbase was at 10.3m ish, it was selling more SW than PS3 at 17m this june gone was? wow

I can confidently say that you are reading that wrong. In multiple ways.

Not sure if it makes any sense, though.

You mean you don't remember the recent widespread PS3 shortage? Their whole supply chain broke down, as they didn't have enough harddrives to put in the consoles. The entire shipment of PS3 HDDs was found floating somewhere outside of Bangkok.

Of course, that could be wrong. I get all my news from Jack Tretton's Twitter account.

 

[Miles X]

I can confidently say that you are reading that wrong. In multiple ways.

How so? (not debating I'm wrong)

 

[donny2112]

http://www.neogaf.com/forum/showthread.php?t=395262

Unless Sony released fake MS numbers on their FY09 report, then at least in 2009 the myth that MS is the juggernaut of software sales was indeed false.

Parmenides took the U.S. tie ratio for 360 (i.e. sell-through, not shipped, whereas Nintendo/Sony listed shipped) and applied it worldwide hardware shipped to get 360 software shipped. i.e. That number is wrong. It's probably even pointed out in that thread by me.

Edit:
Yep.
http://www.neogaf.com/forum/showpost.php?p=21257108&postcount=246

 

[Vieo]

It's time to lower PS3's price by $100 and bundle Rayman Origins with every console.

 

[Phonomezer]

Strange.. no claims of channel stuffing?

In the Microsoft thread, the same people posting ITT had somehow come to the conclusion that all Xbox 360 shipments were channel stuffing.

How odd.

 

[Chris1964]

Strange.. no claims of channel stuffing?

In the Microsoft thread, the same people posting ITT had somehow come to the conclusion that all Xbox 360 shipments were channel stuffing.

How odd.

"Somehow" you can find very easily 360 channel stuffing really happened.

 

[GavinGT]

How so? (not debating I'm wrong)

I'm sorry, buddy, you were totally right. I was thinking worldwide hardware sales, but you were talking NPD.

"Somehow" you can find very easily 360 channel stuffing really happened.

It's hard to call it "channel stuffing" after they had a record Black Friday. They clearly expected to sell more in December than they actually did, and so did retailers.

 

[gofreak]

So SCE was still profitable?

I presume the next quarters will finally be more challenging to that with Vita's worldwide launches, but that's still pretty good going.

 

[Satchel]

What is hilarious is that 360 had 1 year head start and barely beats PS3. So much for being a dominant console in 2, may be three countries.

Wanna know whats more hilarious?

Sony coming from the previous gen with a lead of over 100 million. Both Nintendo and Microsoft have done an amazing job turning around their results from last gen.

If someone told you, in 2004, that Nintendo would end the next gen 30 mill plus in front of Sony, and MS 4-5 mill in front of sony you would have laughed your ass off at them.

 

[KageMaru]

Strange.. no claims of channel stuffing?

In the Microsoft thread, the same people posting ITT had somehow come to the conclusion that all Xbox 360 shipments were channel stuffing.

How odd.

I know what you mean, with some people jumping to the obvious conclusion, but it is likely they did stuff at least a little. We'll have a better picture after viewing their next couple quarterly reports.

 

[Phonomezer]

"Somehow" you can find very easily 360 channel stuffing really happened.

That isn't a sufficient response.

 

[Thunder Monkey]

Wanna know whats more hilarious?

Sony coming from the previous gen with a lead of over 100 million. Both Nintendo and Microsoft have done an amazing job turning around their results from last gen.

If someone told you, in 2004, that Nintendo would end the next gen 30 mill plus in front of Sony, and MS 4-5 mill in front of sony you would have laughed your ass off at them.

Hell until I knew what the Wii would be and how much Sony was going to charge for a PS3 I would have laughed at anyone that said it.

 

[DarkChild]

I think Sony would be more profitable if they made something like "Sony Studios" and become 3rd party developer. Imagine them getting money they would be getting with so many good franchises...

 

[Sean]

They've been doing a fair bit of discounting and promotions post-PSN hack, haven't they? It seems like they've been shoveling freebies at PS+ users. Stuff like that might be negatively impacting revenue.

I also don't know if it's accounted for under 'game' but they've been doing similar promo work to attract users to the music and video services, which I guess costs them to offer...

PS+ is a paid subscription service though, they are not exactly "freebies". I highly doubt that is the reason for losses.

 

[Narpas Sword0]

I think Sony would be more profitable if they made something like "Sony Studios" and become 3rd party developer. Imagine them getting money they would be getting with so many good franchises...

I'm sure resistance and ratchet would have done better competing more directly with halo and mario

 

[gofreak]

PS+ is a paid subscription service though, they are not exactly "freebies". I highly doubt that is the reason for losses.

Well, it turns out there isn't a loss in the games division anyway.

I presume profit deteriorated, and thus that deterioration is partially why results overall in CPD deteriorated...but that statement wasn't meant to imply a loss as it turns out.

 

[FrankT]

Wanna know whats more hilarious?

Sony coming from the previous gen with a lead of over 100 million. Both Nintendo and Microsoft have done an amazing job turning around their results from last gen.

If someone told you, in 2004, that Nintendo would end the next gen 30 mill plus in front of Sony, and MS 4-5 mill in front of sony you would have laughed your ass off at them.

Naw that kind talk would have got ya permed heh. Anyhow folks need to quit confusing MS US attach rate with a WW number. They have never provided WW SW figures. MS has done a heck a job this gen, but of course anything is possible next gen and I still do not expect that to start for them until at least fall 2013. 360 likely to be close to 85-90M by that point.

 

[szaromir]

Hell until I knew what the Wii would be and how much Sony was going to charge for a PS3 I would have laughed at anyone that said it.

Most people here would laugh at that even after those announcements. Most people have been commenting on PS3/360 race for years and at every point they expected PS3 to overtake 360 'soon' (within 6-12 months period). Only recently people woke up and stopped being delusional.

 

[Dreams-Visions]

Now above NES in both hardware and software.

why would you compare the PS3 to the NES? I don't understand. Different era, different utility, different demographics, different marketing, different social acceptibility....different fucking everything.

 

[szaromir]

why would you compare the PS3 to the NES? I don't understand. Different era, different utility, different demographics, different marketing, different social acceptibility....different fucking everything.

Relax buddy, he only highlighted that PS3 crossed certain milestone, nothing more, nothing less.

 

[Cipherr]

why would you compare the PS3 to the NES? I don't understand. Different era, different utility, different demographics, different marketing, different social acceptibility....different fucking everything.

It wasnt a comparison like that, calm the fuck down daaaaaamn. Its a mere milestone met in the same industry. It surpassed the NES, thats all..... A mere change in ranks of what console has sold what.

 

[KageMaru]

That isn't a sufficient response.

Unless you believe the 360 gained in popularity around the world, the NPD sales results from the holiday season pretty much indicate they stuffed the channel.

I think Sony would be more profitable if they made something like "Sony Studios" and become 3rd party developer. Imagine them getting money they would be getting with so many good franchises...

If there was no playstation, there would be no need for development studios.

 

[JoshuaJSlone]

I don't mean to imply some special relationship between PS3 and NES--but if you rank best-selling consoles PS3 has just (this quarter on hardware, last quarter on software) passed up NES's numbers.

PS2
PS1
Wii
X360
PS3
NES

 

[patsu]

Thats because their TV's, in comparison with Samsung's, are not so good, plus they are pricey.

Yes and no. They do sell fewer units than Samsung, but it does not mean they should lose money as a result. e.g., Vizio overtook Samsung in unit sales, but the latter could still make money:
http://www.lcdtv.net/news/samsung-loses-vizio-us-112410

And later Samsung's panel business also ran into difficulty because that industry is being commoditized (Price getting too low !), but their growing cellphone business covered up the slack:
http://www.businessweek.com/news/20...-as-phone-sales-mask-slump-in-lcd-panels.html

The causes for Sony's TV business losses are the expensive Yen, and quickly eroding TV price because it's commoditized.

Sony has no "TV platform income" like Blu-ray to collect tax from cheap TV makers, and not enough LCD panel volume. I think recently, the Japanese government got the industry to form a consolidated (small) panel making company to aggregate the volume. In addition, Sony's "next LCD" R&D didn't produce commercial results (No large OLED panels, banging on Crystal LED next). They can only package stuff from other component makers. Their TV is actually pretty good, but expensive partly because Sony has high cost (Yen and such).

 

[cyberheater]

Naw that kind talk would have got ya permed heh. Anyhow folks need to quit confusing MS US attach rate with a WW number. They have never provided WW SW figures. MS has done a heck a job this gen, but of course anything is possible next gen

Except last gen Sony had a bucket full of cash to sink into PS3. They can't do that again for PS4. MS and Ninty are in a much stronger place going forward.

 

[TheOddOne]

Sucks MS don't provide updates, surprised investors arnt asking to see them ...

Since the initial report about MS investors not being happy, have there been any reports after that?

 

[Phonomezer]

Unless you believe the 360 gained in popularity around the world, the NPD sales results from the holiday season pretty much indicate they stuffed the channel.

Well I'm not seeing any indication as to whether it's true or not. According to some people the Xbox 360 doesn't sell anywhere else but the US. Is this the reasoning? A fairly stupid assessment.

 

[jcm]

Unless you believe the 360 gained in popularity around the world, the NPD sales results from the holiday season pretty much indicate they stuffed the channel.

"Channel stuffing" has really nefarious connotations, though. MS probably overshipped, but not because they were fraudulently inflating their numbers. It seems more likely they and their retailers just miscalculated.

Well I'm not seeing any indication as to whether it's true or not. According to some people the Xbox 360 doesn't sell anywhere else but the US. Is this the reasoning? A fairly stupid assessment.

No, that's the not the reasoning. The reasoning is that we have a decent picture of non-US sales. Nothing leads us to believe those sales are way up, which is what would have needed to happen in order for MS not to have overshipped last quarter.

 

[DMeisterJ]

So SCE is doing fine?

Hmm.

 

[Miles X]

Unless you believe the 360 gained in popularity around the world, the NPD sales results from the holiday season pretty much indicate they stuffed the channel.

Lifetime sales and most yearly sales suggest the US is almost spot on, half of where 360 does its business.

They sold 3.8m in the US over Q4, so it's not a stretch to think 7.6m WW. Given we don't know what their stock was like going into Q4, the extra 600k could be a 50/50% split between refilling shelves.

 

[pharmboy044]

So SCE was still profitable?

I presume the next quarters will finally be more challenging to that with Vita's worldwide launches, but that's still pretty good going.

I'd like to know this too.
Any numbers would be greatly appreciated.

 

[GavinGT]

I don't mean to imply some special relationship between PS3 and NES--but if you rank best-selling consoles PS3 has just (this quarter on hardware, last quarter on software) passed up NES's numbers.

PS2
PS1
Wii
X360
PS3
NES

Those rankings are totally meaningless in a modern context, though. The market has grown so much, and the game-consuming public is so different. It's basically pointless to even keep track of it.

NES was basically at full market saturation with its 62 million sales, whereas Sony has barely reached even a small chunk of the gaming market with the same 62 million.

 

[patsu]

Our products like PlayStation 3, the sales trend is quite firm, but it was nevertheless affected by the Thai flood. The destruction of supply chain adversely affected the PlayStation. So as is shown in your materials, we have reduced our forecast by 1 million units for the entire year.

Not sure if it makes any sense, though.

Supply chain controls the schedule, price of distributing Playstations throughout the world at as low a cost as possible. They run like clockwork to keep the cost low, and delivery on-time so that they don't run into stock outs.

In the flood, it means they have to repair the plants, reorder or remake the destroyed Playstation components while juggling or even stalling the production process (Have to pay the workers and keep other plants running during the slack). Some of these last minute requests will be expensive.

If the shipping schedules are missed since the Playstations weren't getting made on time, they have to reschuedule shipment at the last minute too. Again, more expensive.

Plus, not enough units to reach destinations.

Strange.. no claims of channel stuffing?

In the Microsoft thread, the same people posting ITT had somehow come to the conclusion that all Xbox 360 shipments were channel stuffing.

How odd.

Probably didn't do it ? It would actually help Sony in this Thai flood incident *if* they had stuffed the channel with more units. But channel stuffing usually affects a company negatively in the long run.

 

[patsu]

I think Sony would be more profitable if they made something like "Sony Studios" and become 3rd party developer. Imagine them getting money they would be getting with so many good franchises...

They will do more than that. PS Suite is essentially Sony virtualizing the Playstation platform to take it to third party devices. So it's not just being a 3rd party developer, but also 3rd party platform/middleware provider. At the same time, they will continue to do their own hardware.

 

[jcm]

Lifetime sales and most yearly sales suggest the US is almost spot on, half of where 360 does its business.

They sold 3.8m in the US over Q4, so it's not a stretch to think 7.6m WW. Given we don't know what their stock was like going into Q4, the extra 600k could be a 50/50% split between refilling shelves.

Shipments increased by 1.9M YOY. US Sales increased by 238K. They either had a monster quarter in Europe, or they overshipped. Based on the Nintendo earnings charts, they did not have a monster quarter in Europe.

 

[KageMaru]

Well I'm not seeing any indication as to whether it's true or not. According to some people the Xbox 360 doesn't sell anywhere else but the US. Is this the reasoning? A fairly stupid assessment.

I'm not making any kind of assessment like that, I'm also not claiming that the 360 only sells in the US and nowhere else. I'm just saying that unless sales rose by a good margin outside of the US, it's likely they over-shipped. Sorry, maybe channel stuffing was the wrong word usage.

"Channel stuffing" has really nefarious connotations, though. MS probably overshipped, but not because they were fraudulently inflating their numbers. It seems more likely they and their retailers just miscalculated.

I agree, I didn't mean to insinuate that they had some scheme or something to inflate numbers.

 

[Miles X]

Shipments increased by 1.9M YOY. US Sales increased by 238K. They either had a monster quarter in Europe, or they overshipped. Based on the Nintendo earnings charts, they did not have a monster quarter in Europe.

You're forgetting the incredibly low levels of stock in Q4 last year, and how they had to ship in more stock on boats from Q1. And then posted a huge (relative to 360) 2.7m in Q1. Those channel refillers were suppose to be for Q4, so in reality who knows what they should have shipped in Q4, and how much they would be up this year as a result.

 

[gofreak]

Except last gen Sony had a bucket full of cash to sink into PS3. They can't do that again for PS4.

They don't need to in order to have a competitive product.

They 'needlessly' sunk a lot of money into semiconductor investments last time around. And also, for Sony as a whole, in optical disc r&d. Things they nor their competitors will be doing or need to be doing next-gen. They're not at a competitive disadvantage for not doing that stuff - Sony is now 'just' a curator of components to assemble in a machine rather than the creator of those components, exactly like MS or Nintendo.

It's not about having a bucket of cash to sink into being a semiconductor creator in order to be competitive.

On that note though, surprising though it may be, I believe Sony's cash accounts today are bigger than they were at any point FY2001-FY2005 i.e. during the period of PS3's development and related semiconductor investment. What's most different now would be their risk aversion wrt doing their own from-scratch R&D (no doubt heightened by the current profitability situation), and their perception of the need to be doing that - they obviously see now that they don't, and are better off financially not doing that.

 

[Satchel]

Naw that kind talk would have got ya permed heh. Anyhow folks need to quit confusing MS US attach rate with a WW number. They have never provided WW SW figures. MS has done a heck a job this gen, but of course anything is possible next gen and I still do not expect that to start for them until at least fall 2013. 360 likely to be close to 85-90M by that point.

I don't see the 360 getting much past 70-75 personally, 80 at best, which is still an amazing figure for the 'second placed' console.

Absolutely unheard of. Although having said that, I'm not taking price cuts into account because MS seem too stubborn to do so. So you could be right if they drop the price properly.

I still find it amazing that even the 'third placed' console can sell 70 plus (by the end of it's life).

Amazing.

 

[jcm]

You're forgetting the incredibly low levels of stock in Q4 last year, and how they had to ship in more stock on boats from Q1. And then posted a huge (relative to 360) 2.7m in Q1. Those channel refillers were suppose to be for Q4, so in reality who knows what they should have shipped in Q4, and how much they would be up this year as a result.

Well, we can quibble over the proper inventory levels for MS, compare the size and length of their channel to that of Sony's, and lots of other topics that neither you nor I have the numbers to support. Or we can just agree that MS's sales this quarter didn't have the large YOY increase suggested by their shipments.

I can't find the numbers for the 2010 total sales vs 2011 total sales (using the EU numbers pixel counted from the Nintendo graphs). Does anyone have them handy? I'm interested to see if they are similar to the 2.8M YOY increase in CY shipments.

 

[FrankT]

I don't see the 360 getting much past 70-75 personally, 80 at best, which is still an amazing figure for the 'second placed' console.

Absolutely unheard of. Although having said that, I'm not taking price cuts into account because MS seem too stubborn to do so. So you could be right if they drop the price properly.

I still find it amazing that even the 'third placed' console can sell 70 plus (by the end of it's life).

Amazing.

Must not be paying much attention to the yearly numbers they will make 75 this year easy with or without a price drop, but four years in says price drop almost certain. All they would need is 9M for 2012 which is zero problem.

Just to put a guess of where they may be by year end because I like to do such things I'll say ~78M or 12m units for the year. That leaves them no problem of dropping another 10M or so in 2013 or right around the point of a late fall launch of the next system.

Things that might impact this is the size of the price drop or if they were to do a 2013 Spring launch of the next box. Kind of doubt the latter.

 

[Busty]

With all this talk of the 'next gen' home console from Sony I think people constantly underestimate the first party development infrastructure that SCE now have in place.

Compare the SCE-WWS portfolio at the launch of the PS2 to the way it is now. It's like night and day. This set up took time and investment and think that 'next gen' is when it will really pay off for Sony.

Surely this is a massive asset that Sony have already 'bought and paid' and will continue to build upon when it comes to SCE's finances and their ability to successfully launch a new home console....

I think Sony would be more profitable if they made something like "Sony Studios" and become 3rd party developer. Imagine them getting money they would be getting with so many good franchises...

C'mon buddy, you're better than that.

 

[Pancakes R Us]

Thats because their TV's, in comparison with Samsung's, are not so good, plus they are pricey.

The days of large numbers of people willing to pay the Sony tax have been over for a long time. The connotations of high quality just doesn't resonate with the brand that much anymore. People have moved on to the Samsungs and the LGs of the world.

 

[Satchel]

Must not be paying much attention to the yearly numbers they will make 75 this year easy with or without a price drop, but four years in says price drop almost certain. All they would need is 9M for 2012 which is zero problem.

Just to put a guess of where they may be by year end because I like to do such things I'll say ~78M or 12m units for the year. That leaves them no problem of dropping another 10M or so in 2013 or right around the point of a late fall launch of the next system.

Things that might impact this is the size of the price drop or if they were to do a 2013 Spring launch of the next box. Kind of doubt the latter.

You're most likely right.

I'm just amazed that '2nd and 3rd' can sell 90 mill and 80 mill (approx) respectively in a generation.

It's truly astonishing.