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WSJ: Sony Earnings: What to Watch

G

ggx2ac

Member
Link: https://www.wsj.com/articles/sony-earnings-what-to-watch-1493092057

EARNINGS FORECAST: The company said last week it expects to report a net profit of ¥73 billion ($665 million) for the 12 months ended March 31, down from the year-earlier profit of ¥147.8 billion.

REVENUE FORECAST: Sony expects to book revenue of ¥7.6 trillion, the company said last week, down from ¥8.1 trillion a year ago.

WHAT TO WATCH:

CURRENT FISCAL-YEAR FORECAST: The fiscal year that started this month marks the last under Chief Executive Kazuo Hirai’s latest three-year business plan. Under that plan, Sony had targeted operating profit of more than ¥500 billion for the current fiscal year. Sony recorded its biggest operating profit, ¥525.7 billion, in fiscal 1997.

CASH FLOW: Sony has tried to boost its free cash flow by generating more recurring business, where customers repeatedly purchase Sony goods and services over a long period of time. Analysts are looking for more details on how Sony plans to beef up that strategy, which has so far been successful with its PlayStation and Alpha digital-camera businesses.

PLAYSTATION 4: Analysts say the popularity of Sony’s PlayStation 4 videogame console, which hit the market in 2013, is nearing its peak or may have already passed it. With Nintendo Co.’s recent release of a new console and Microsoft gearing up to unveil a new device later this year, attention is turning to how Sony plans to maintain demand for PlayStation 4, through which Sony sells many of its paid online services. Analysts will also be looking for more information on manufacturing volumes for Sony’s virtual-reality headset PlayStation VR, which customers have had difficulty finding in stores.
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The only other information in the article is the cuts to the semiconductor unit which is responsible for the image sensors used in iPhones.
 
B

Bronetta

Ask me about the moon landing or the temperature at which jet fuel burns. You may be surprised at what you learn.
Watch the Throne
 
D

DriftingSpirit

Member
Why do people think Switch and Scorpio are going to stall PS4 demand? The two former devices can do their own thing without impeding PS4. Especially Switch. Besides, the PS4 has a far larger market than either device and it has big software (Spider-Man, God of War) in the pipeline. That train isn't stopping.
 
T

The Last Wizard

Member
DriftingSpirit said:
Why do people think Switch and Scorpio are going to stall PS4 demand? The two former devices can do their own thing without impeding PS4. Especially Switch. Besides, the PS4 has a far larger market than either device and it has big software (Spider-Man, God of War) in the pipeline. That train isn't stopping.
Click to expand...
They're coming after the king, the throne shall be watched.

Plus PS4 is hitting its stride:p
 
T

TimeEffect

Member
PS4 is going to explode with GT, God of War, and Last of Us 2, maybe even Spiderman

Those are arguably the biggest IPs right?
 
Toni

Toni

Member
Nothing stops the PS4 this year.

They have Gran Turismo, Star Wars, Spider-man, Uncharted, Call of Duty and Destiny 2.

Literally nothing.

This is the year they peak.
 
M

MaximumSpider

Banned
DriftingSpirit said:
Why do people think Switch and Scorpio are going to stall PS4 demand? The two former devices can do their own thing without impeding PS4. Especially Switch. Besides, the PS4 has a far larger market than either device and it has big software (Spider-Man, God of War) in the pipeline. That train isn't stopping.
Click to expand...
Yeah, do they need to worry about those 2? PS4 is still knocking it out of the park when it comes to games.
It's still in the lead too.
 
Samanosuke Akechi

Samanosuke Akechi

Member
gXV3Flf.gif
 
D

Deleted member 80556

Unconfirmed Member
where customers repeatedly purchase Sony goods and services over a long period of time. Analysts are looking for more details on how Sony plans to beef up that strategy
Click to expand...

I can't help but to think in programmed obsolescence when I read this. Even if it won't happen.
 
J

jdstorm

Banned
Toni said:
Nothing stops the PS4 this year.

They have Gran Turismo, Star Wars, Spider-man, Uncharted, Call of Duty and Destiny 2.

Literally nothing.

This is the year they peak.
Click to expand...

Just to play Devils Advocate. 3 of those 6 will be availiable on xbox. Forza is an excellent GT equivalent, Halo 6 is likely equivalent to an uncharted spinoff since both are shooters with widespread brand recognition.

The only real point of difference is Spiderman. Which is a pretty big point of difference, but if someone didn't care about the Spiderman IP, or prioritized the other games on that list with limited funds, there is very little difference.
 
D

DangerMouse

Member
Toni said:
Nothing stops the PS4 this year.

They have Gran Turismo, Star Wars, Spider-man, Uncharted, Call of Duty and Destiny 2.

Literally nothing.

This is the year they peak.
Click to expand...

This. And this isn't even everything as far as big titles since there's also huge stuff like God of War and Rockstar's RDR2 likely during this fiscal year whether or not it makes fall, and then still more big games, plus the potential of a price cut.

So I agree there's no way it's peaked just yet, though this seems like it might be the year.
 
O

OrbitalBeard

Member
jdstorm said:
Just to play Devils Advocate. 3 of those 6 will be availiable on xbox. Forza is an excellent GT equivalent, Halo 6 is likely equivalent to an uncharted spinoff since both are shooters with widespread brand recognition.

The only real point of difference is Spiderman. Which is a pretty big point of difference, but if someone didn't care about the Spiderman IP, or prioritized the other games on that list with limited funds, there is very little difference.
Click to expand...

Uncharted is bigger than Halo now. And there's no way Halo 6 is launching this year.

The two big winners this year will be PS4 and Switch.
 
{insert code here}

{insert code here}

Member
Do they still report on the games division's R&D spending? Curious to see how big that number is and whether or not we can extrapolate (guess) on a PS5 launch time frame by looking at the numbers.
 
Liliana Eileen

Liliana Eileen

Member
Toni said:
Nothing stops the PS4 this year.

They have Gran Turismo, Star Wars, Spider-man, Uncharted, Call of Duty and Destiny 2.

Literally nothing.

This is the year they peak.
Click to expand...

Half of your list is multiplatform, one is a spinoff and one has huge competition with Forza 7 this year, which has been taking the crown for years with awards/GOTYs. And it will be a 4k60FPS showcase with room to spare, to boot.

Really looking forward to Spidey, however.
 
G

ggx2ac

Member
Juan29.zapata said:
where customers repeatedly purchase Sony goods and services over a long period of time. Analysts are looking for more details on how Sony plans to beef up that strategy
Click to expand...

I can't help but to think in programmed obsolescence when I read this. Even if it won't happen.
Click to expand...

Turn PS+ into a gacha system. Have a chance of getting a tier above the regular PS+ system giving you more discounts and more monthly games but you have to roll for a chance to win.

I'm joking
 
P

Primethius

Banned
DriftingSpirit said:
Why do people think Switch and Scorpio are going to stall PS4 demand? The two former devices can do their own thing without impeding PS4. Especially Switch. Besides, the PS4 has a far larger market than either device and it has big software (Spider-Man, God of War) in the pipeline. That train isn't stopping.
Click to expand...

Switch could definitely have an impact even if it hasn't so far. I suppose it depends on how Sony and Nintendo compete in the holidays, but I also think most of Switch's impact vs. PS4 will be in Japan.

Could go either way and I could see both coexisting relatively peacefully.

Scorpio... lol, that's a non factor and isn't doing anything. PS4 will continue to dominate XB1 and Scorpio will reduce that maybe just a tad bit.
 
J

jdstorm

Banned
OrbitalBeard said:
Uncharted is bigger than Halo now. And there's no way Halo 6 is launching this year.

The two big winners this year will be PS4 and Switch.
Click to expand...

I agree. I was just taking the contrarian arguement. All systems have a few big hitters coming that werent on that list, and Microsoft has by far the most to prove.
 
D

DriftingSpirit

Member
Polygonal_Sprite said:
We're not talking about the Earnings of 2022. ;)
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The only one that won't be out for a while from now is The Last of Us Part II

Liliana Eileen said:
Half of your list is multiplatform
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That didn't stop something like Destiny from really pushing PS4s.

one is a spinoff
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Fair enough but the Uncharted brand will still help support general PS4 momentum.

and one has huge competition with Forza 7 this year, which has been taking the crown for years with awards/GOTYs. And it will be a 4k60FPS showcase with room to spare, to boot.
Click to expand...
Forza 7 is competition in terms of game quality. In terms of sales, no.

Really looking forward to Spidey, however.
Click to expand...
Indeed. It should help move a ton of PS4s.
 
D

DriftingSpirit

Member
Primethius said:
Switch could definitely have an impact even if it hasn't so far. I suppose it depends on how Sony and Nintendo compete in the holidays, but I also think most of Switch's impact vs. PS4 will be in Japan.

Could go either way and they could both coexist relatively peacefully.

Scorpio... lol, that's a non factor and isn't doing anything. PS4 will continue to dominate XB1 and Scorpio will be reduce that maybe just a tad bit.
Click to expand...
I don't really see how when the PS4 has such a huge market advantage. In Japan? Sure.
 
L

legend166

Member
Am I reading it right that their net profit is less than what Nintendo is expected to report?

Didn't we just have a thread saying they're announcing their highest profit in 20 years? Although I guess that was operating profit.
 
G

ggx2ac

Member
legend166 said:
Am I reading it right that their net profit is less than what Nintendo is expected to report?

Didn't we just have a thread saying they're announcing their highest profit in 20 years? Although I guess that was operating profit.
Click to expand...

That was for operating profit which is different to net profit.

Operating profit is gross - operating expenses. This doesn't include taxes, etc.
 
P

Primethius

Banned
DriftingSpirit said:
I don't really see how when the PS4 has such a huge market advantage. In Japan? Sure.
Click to expand...

I don't think it'll happen with what's currently the scenario but a possibility exists where there could be some sales canabalization from each other depending on how fall marketing and pricing are handled.

The Switch is a bit of an unknown quantity. It very well might be that it's tapping largely into the handheld market but if Nintendo also positions it as a viable console alternative that the audience buys into, it could canabalize PS4 and XB1 sales. Largely it would impact the XB1 if so, but I'd expect some impact on the PS4 as well. The market has to adjust and accommodate three "console" players rather than two.

I don't personally see that happening though.
 
RedAssedApe

RedAssedApe

Banned
legend166 said:
Am I reading it right that their net profit is less than what Nintendo is expected to report?

Didn't we just have a thread saying they're announcing their highest profit in 20 years? Although I guess that was operating profit.
Click to expand...

sony is more than playstation. some of their other divisions have dragged them down
 
I

Inuhanyou

Believes Dragon Quest is a franchise managed by Sony
I don't really think Sony needs to counteract Scorpio or Switch with anything beyond what they have honstly...

More software maybe? They already have contracts in place for every major game through this year for marketing rights, the momentum and the software sales driving them as well.
 
L

legend166

Member
ggx2ac said:
That was for operating profit which is different to net profit.

Operating profit is gross - operating expenses. This doesn't include taxes.
Click to expand...

Yeah sure, I understand that. But I'm guessing it's more than taxes considering we're talking an almost 2 billion difference between operating and net income. Debt repayments?

I'm not trying to talk it down, obviously operating income is a good indicator that they've successfully turned around the fundamental cash flow position of the company.

On the other hand it goes to show how lean Nintendo are as a business.
 
T

The God

Member
Inuhanyou said:
I don't really think Sony needs to counteract Scorpio or Switch with anything beyond what they have honstly...

More software maybe? They already have contracts in place for every major game through this year for marketing rights, the momentum and the software sales driving them as well.
Click to expand...

More games is always the answer
 
G

ggx2ac

Member
legend166 said:
Yeah sure, I understand that. But I'm guessing it's more than taxes considering we're talking an almost 2 billion difference between operating and net income. Debt repayments?

I'm not trying to talk it down, obviously operating income is a good indicator that they've successfully turned around the fundamental cash flow position of the company.

On the other hand it goes to show how lean Nintendo are as a business.
Click to expand...

My guess is fixed costs, Sony employs 146,300 people according to Google compared to Nintendo which is around 5000.

That's a lot more employees to pay for.

Edit: Or that could still be operating expenses...
 
G

gamz

Member
ggx2ac said:
My guess is fixed costs, Sony employs 146,300 people according to Google compared to Nintendo which is around 5000.

That's a lot more employees to pay for.
Click to expand...

What? That surprises me. I figured it was way higher than that.
 
F

Final Verdict

Member
I'm not buying into any doom and gloom vision for PS4's future, but I would be open to the idea that it may have reached it's peak either this year or last (maybe).

That doesn't mean sales are going to suddenly fall off a cliff or that the new exclusives won't puch any units, but there comes a point where a console reaches a certain level of market saturation where it just isn't going to continue to sell at the same rate simply because most gamers already have one.

Now there won't really be anyway to tell when it will hit that point until it actually happens in my opinion, but at over 55 million, sales history certainly would suggest that it can't continue selling 20m+ year in and year out (or however much it has been selling as I haven't paid much attention to specifics recently).

Also, I think the introduction of new competing hardware that is exciting can affect the sales of PS4 as it does not sell in a bubble, and us gamers have limited budgets (some of us at least). So a nintendo switch sale or xbox scorpio sale could theoretically (and practically I believe) take away from ps4's sales if that person was considering both and chose one of those two over the ps4.

Like I said earlier, I don't think ps4's sales are going to tank, but there is a possibility that these new systems could steal a few sales. Having said that, I personally think PS4 will continue to sale good, and if Sony can get the price down to $199 it will really help to continue their momentum.

Also, I am really hoping that Sony does well as a company as I really enjoy what they are doing in the camera market.
 
L

legend166

Member
ggx2ac said:
My guess is fixed costs, Sony employs 146,300 people according to Google compared to Nintendo which is around 5000.

That's a lot more employees to pay for.

Edit: Or that could still be operating expenses...
Click to expand...

Yeah that's operating expenses.
 
O

Omnistalgic

Member
Liliana Eileen said:
Half of your list is multiplatform, one is a spinoff and one has huge competition with Forza 7 this year, which has been taking the crown for years with awards/GOTYs. And it will be a 4k60FPS showcase with room to spare, to boot.

Really looking forward to Spidey, however.
Click to expand...
They are talking about sales not the best console to play on. Those multi-platform games have marketing deals with Sony, will likely get bundles with PS4 (Destiny/Star Wars/COD basically a lock) and Gran Turismo sells like 7x as much as Forza.

As soon as someone starts listing exclusives, people love to jump in with the "I'm fine on my other platform, we have games to match that". That's not what earning reports focus on. PS4 will have absolutely crazy sells with third party support this year, and the WWS stuff has way more sales potential than anything coming out on Xbox. Switch is a different situation because some of the highest rated software for Nintendo is actually coming out on Nintendo's hardware the first year.

Overall, it should be a kinda crazy year for PS4, and I don't even think Spider man will hit this year.
 
C

cheesekao

Member
legend166 said:
Am I reading it right that their net profit is less than what Nintendo is expected to report?
Click to expand...
Nintendo had a massive year with Pokemon SuMo, GO, Mario Run, Switch, Zelda. I think it's also pretty well known that Nintendo spends much less relative to the other big companies. Pokemon has got to have massive ROI since it sells much more than many AAA releases at only a fraction of the budget.
 
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