[Kyon]

You can't say that because vita has not had a holiday yet.

true.

[GavinGT]

You can't say that because vita has not had a holiday yet.

Not in the west, you mean.

[Kazerei]

Now if some gaffer would do a graph of that ...

Alright, alright.

[Canis lupus]

I do think Sony would ultimatly revise their PSP+PSV sales to 10m.

[Loghorn150]

I beg to differ Plenty would buy a specced up PS3(4) especially if the price was right, the OS/online was smartened up, and full BC. I think so anyway. Well then, they're their own worst enemy much like Sega and will have no one to blame but themselves if the seemingly inevitable happens.

I agree. It's how Sega went bankrupt (or went nearly bankrupt) after Dreamcast before. Because of chasing higher specs & trying to be better than the other companies in power & graphics.

It's not the power & graphics that sells consoles; it's good advertising, excellent software, & a friendly mass-market price point. It's been proven over & over again every generation.

[gundamkyoukai]

So they just have to do monumentally better than the previous generation under conditions which are far worse. Got it.

No what they have to do is make profit .
They need to make another PS1 or PS2 which compare to PS3 did not lose them 300 to 400 dollars for the first 2 years .
Yes they are no longer the king of the console space but it still possible to bring out a console and make money .
They also need another console to lay the ground work for DD and streaming games until consoles will no longer matter .

The new console is probably already locked-in as far as specs are concerned. It will be a technical monster, which will be a disaster, but Sony cannot do it any other way - they are high-tech company, driven by engineers. You cannot re-orient a company just like that, and tell them "make something cheap and not so powerful", it is a mindset problem. Nintendo was able to do that, because they never saw themselves as a high-tech company. They preach "fun, not specs" all the time. I think Sony's R&D would rebel if asked to make a Wii.

They already start doing that with Vita it might be high end but it made with off the shelf parts that going to get cheap fairly fast .

[Kaako]

I still want a beast PS4. Do it, Kaz.

[Dalthien]

You can't say that because vita has not had a holiday yet.

They had one in Japan. And publishers (especially Japanese pubs, who will be the predominant backers of the system) started watching the fortunes of the system from that launch date.

it's no one's fault but Sony's that they squandered their first holiday by only launching in one territory.

[SirIgbyCeaser]

Not in the west, you mean.

Yes, I don't live in japan I didn't know it had a holiday already there.

It could do well in europe, a portable smash brothers type game... you know.. it could work with the kids.

I don't have much hope for sony, entertainment is a crazy business, you're sometimes ontop sometimes you're last. And it's highly unpredictable to know what's popular these days.

[Castor Krieg]

It's not the power & graphics what sells consoles; it's good advertising, excellent software, & a friendly mass-market price point. It's been proven over & over again every generation.

Power & graphics can sell a console as well, but as you mentioned it needs to be reflected in the software, it needs to have support, people need to be taught why they need to buy PS4.

Sony is making the same mistake over and over again - we release great product, and it will sell. This is simply not true, I do not understand why they don't see it. A moron would've realized it by now.

[AOC83]

Plenty would buy a specced up PS3(4) especially if the price was right, the OS/online was smartened up, and full BC. I think so anyway.

Doubtful. Ms is going to offer a generational leap at a reasonable price and Nintendo has much stronger IPs. To succeed Sony would need the luck Nintendo had with the WiiMote and come up with something that gets them the (casual)masses and that´s not going to happen.

Sony needs the core userbase more than ever.

[Kyon]

I agree. It's how Sega went bankrupt (or went nearly bankrupt) after Dreamcast before. Because of chasing higher specs & trying to be better than the other companies in power & graphics. It's not the power & graphics what sells consoles; it's good advertising, excellent software, & a friendly mass-market price point. It's been proven over & over again every generation.

Yeah but.... no one wants to DOWNGRADE from PS3 to a Wii for a PS4 thats not gonna happen. Next Gen will be more expensive than this one which people seem to forget.
How do you expect a jump in grfx/power?
Might as well make another PS3 revision and call it a PS4 if thats the case. Do not want.

[Triple U]

They're not losing money right now because of the PS4. Companies take losses in the year that the system launches - not this far out. Gaming revenue is down 15% this quarter vs. a year ago. That's why they're losing money.

This is incorrect. R&D is done a couple of years prior to the year a console launches. So costs can occur a couple years prior. Gaming revenue being down doesn't account to these losses by itself.

It's pretty well accepted that Next Gen HW is in developers hands for a while now so yes PS4 costs are a legit factor at this point...

[Ryoku]

Alright, alright.

Can we get a NET annual income graph? Line graph would be preferable (sorry!).

[Dalthien]

Alright, alright.

It's kind of comical in a way - seeing the N64 and GC eras make more money for Nintendo than the PS1 and PS2 eras for Sony. Even with Nintendo's handhelds included in the mix, the PS1 and PS2 sold far, far, far more software than Nintendo did in those eras.

[Canis lupus]

This is incorrect. R&D is done a couple of years prior to the year a console launches. So costs can occur a couple years prior. Gaming revenue being down doesn't account to these losses by itself. It's pretty well accepted that Next Gen HW is in developers hands for a while now so yes PS4 costs are a legit factor at this point...

That would be stellar, since they were able to post a profit the last 2 years in the gaming division. Maybe the losses in the last 2 quarters are due to the fact that PS4 development accelerated?

[mrklaw]

It's well known that PS3 more than wiped out all the profits Sony ever made from the first two Playstations combined.

You might be right, except that isn't how profit/loss works. PS2 made profits in those years. Those years are gone and were successful. PS3 made losses and those years were bad (and still continuing a bit). The two aren't connected.

And PS4 will happen because they've already sunk a ton of money into it. If its a vita style machine that isn't too expensive to build, they should at least avoid the problems they had with PS3

[Elios83]

Kinda shitty results and it sucks the way they're reporting shipments.
PS3/PS2 should be 1.7m/1.1m, so at least they had good PS3 results compared to competion (360, Wii), but the their handhelds sales just suck.
PSP is almost dead everywhere and I don't think they're making an actual Vita price cut this year, I guess the new forecast is 8m Vita and 4m PSP.
Which means they will just make Vita bundles with memory card+first party game this holiday season and hope that a few key games (CoD,AC, Fifa) will lift the sales but basically Vita will go into 2013 in survival mode, slower sales than the PS3 debut.

[Kyon]

If its a vita style machine that isn't too expensive to build

I wouldn't mind this. It would be perfect

[Dalthien]

This is incorrect. R&D is done a couple of years prior to the year a console launches. So costs can occur a couple years prior. Gaming revenue being down doesn't account to these losses by itself. It's pretty well accepted that Next Gen HW is in developers hands for a while now so yes PS4 costs are a legit factor at this point...

They're a factor, but a very minimal one at this point. There is always a significant R&D spend every year - with or without a new system being prepared.

But the 15% drop in revenue is by far the biggest factor in the loss for the quarter. Sony said as much in their comments attached to their earnings report. They took in 20B Yen less in sales, with a whole bunch of fixed costs (studio salaries, advertising, etc.) that don't fluctuate a whole lot (and usually go up due to inflation) from year to year. That would easily account for most of the downward swing of about 7B yen in operating income for the quarter. Currency exchange would be the secondary reason for the loss.

[Aad]

What were the reasons for Nintendo to make a loss last year?

3DS not taking off as expected
Wii U (3DSXL?) R&D
Sharp decline of Wii sales
Strong Yen
Social gaming?

[Castor Krieg]

What were the reasons for Nintendo to make a loss last year? 3DS not taking off as expected Wii U (3DSXL?) R&D Sharp decline of Wii sales Strong Yen Social gaming?

Drastic price cut on 3DS making them lose a bit of money on each unit sold.

[Canis lupus]

What were the reasons for Nintendo to make a loss last year? 3DS not taking off as expected Wii U (3DSXL?) R&D Sharp decline of Wii sales Strong Yen Social gaming?

3DS pricecut.

[IonicSnake]

So if Sony didn't buy Gaikai would they have made profit? :P

Forgive my ignorance.

[Averon]

The PS4 will likely be engineered much like the Vita: a machine that's powerful but isn't unreasonably expensive to mass produce or sell at retail. Sony would be suicidal to repeat the PS3's R&D and retail pricing.

[ThisWreckage]

It would really benefit them to cut the price of the Vita, but I don't think they can. Even if they could, I don't think they have the desire to do such a thing.

[Kazerei]

Can we get a NET annual income graph? Line graph would be preferable (sorry!).

I'm not sure where to find net income numbers for Sony's gaming business specifically. All their earnings releases are here, but in the gaming sections, they seem to only release certain numbers, like sales and operating income :S

[GavinGT]

You might be right, except that isn't how profit/loss works. PS2 made profits in those years. Those years are gone and were successful. PS3 made losses and those years were bad (and still continuing a bit). The two aren't connected. And PS4 will happen because they've already sunk a ton of money into it. If its a vita style machine that isn't too expensive to build, they should at least avoid the problems they had with PS3

I'm not implying that they're making business decisions based off of 17 years of Playstation PNL reports. I was just illustrating how poorly this generation has gone for them.

[SirIgbyCeaser]

So if Sony didn't buy Gaikai would they have made profit? :P Forgive my ignorance.

Sony's new cloud gaming devision had a profit for being sold. lol

[marc^o^]

Tough decisions ahead for Sony.

Should they kill PS3 support next year for the PS4, even if PS3 is now profitable?
Should they dedicate big 1st party ressources to save Vita, reducing PS3 and PS4 support?

I don't know how they will balance their investments, they need to make the right bets. One platform will have to lose something.

[ElTopo]

The PS4 will likely be engineered much like the Vita: a machine that's powerful but isn't unreasonably expensive to mass produce or sell at retail. Sony would be suicidal to repeat the PS3's R&D and retail pricing.

I don't think that's enough. They're lacking a vision to sell to consumers.

[shink]

So if Sony didn't buy Gaikai would they have made profit? :P Forgive my ignorance.

I was under the impression the acquisition still needed to be approved?

[GavinGT]

IMO, the Gaikai money should have been spent actually advertising the Vita.

[Canis lupus]

I don't think that's enough. They're lacking a vision to sell to consumers.

What? PS3 is selling the most consoles so how do they lack the vision to sell?

[GCX]

So if Sony didn't buy Gaikai would they have made profit? :P Forgive my ignorance.

Gaikai buyout was small bucks compared to the $2,2 billion EMI Music acquisition.

[ThisWreckage]

Tough decisions ahead for Sony. Should they kill PS3 support next year for the PS4, even if PS3 is now profitable? Should they dedicate big 1st party ressources to save Vita, reducing PS3 and PS4 support? I don't know how they will balance their investments, they need to make the right bets. One platform will have to lose something.

1) They are not going to outright abandon the PS3. It is profitable now and it will continue to be profitable for them in the future. The PS4 will either be break even or profitable as well.

2) If they have to pick between the Vita and the PS3/PS4 they will drop the Vita in a heartbeat. No questions asked. The former is a sideshow and the latter is the main attraction.

[AniHawk]

IMO, the Gaikai money should have been spent actually advertising the Vita.

wouldn't have done much good without the games to back it up. it had a strong launch, but sony's been kinda acting like the thing doesn't exist. they were even quiet about it during e3 aside from the assassin's creed iii thing.

[ElTopo]

What? PS3 is selling the most consoles so how do they lack the vision to sell?

Next gen. You know what that is ?
Vita. You know what that is ?

[Canis lupus]

Gaikai buyout was small bucks compared to the $2,2 billion EMI Music acquisition.

How much did they spend on buying out Eriksons stake?

[GavinGT]

wouldn't have done much good without the games to back it up. it had a strong launch, but sony's been kinda acting like the thing doesn't exist. they were even quiet about it during e3 aside from the assassin's creed iii thing.

$500 million could have gotten them advertising and a few games. They could've farmed out the development work so they wouldn't be left with excess studios after launch.

[SlipperySlope]

maybe I'm not remembering the graph correctly, but 2009 and 2010 were both profitable years. With 2006, 2007, and 2008 totaling around a 550-600 million loss in the gaming division over those three years. This 375million, combind with the profits in 2009 and 2010 should get them close to canceling that figure out, maybe turning a profit overall this year(if they make a profit in gaming this year). Remember not talking about Sony as a whole, JUST the gaming division. It would be nice to find that graph someone posted again to get exact figures.

I'm sure he's been corrected, but I remember 5 billion in losses, not 500 million.

[Canis lupus]

Next gen. You know what that is ? Vita. You know what that is ?

You already know how next gen will play out? I wouldnt use PSV as an example for PS4.

[GCX]

How much did they spend on buying out Eriksons stake?

About $1,5 billion, iirc.

[Triple U]

They're a factor, but a very minimal one at this point. There is always a significant R&D spend every year - with or without a new system being prepared. But the 15% drop in revenue is by far the biggest factor in the loss for the quarter. Sony said as much in their comments attached to their earnings report. They took in 20B Yen less in sales, with a whole bunch of fixed costs (studio salaries, advertising, etc.) that don't fluctuate a whole lot (and usually go up due to inflation) from year to year. That would easily account for most of the downward swing of about 7B yen in operating income for the quarter.

There is R&D every year true but its usually not as significant a console launch. It easily doubles/triples.

And Sony almost never reports R&D costs so you shouldn't expect them to explain them in the quaterly reports.

All that being said, you may be right that the story of this quarter is just stagnant sales and a tough yen.

[Dalthien]

The PS4 will either be break even or profitable as well.

I wouldn't count on it. Not out of the gate. Sony lost money when they launched PS1. They lost even more money when they launched PS2. And then, well - we all know what happened when they launched PS3.

I certainly don't expect anything like the PS3 losses again - but there's every reason to believe that Sony will lose money again on the PS4 for the first year or two.

2) If they have to pick between the Vita and the PS3/PS4 they will drop the Vita in a heartbeat. No questions asked. The former is a sideshow and the latter is the main attraction.

Yep.

And Sony almost never reports R&D costs so you shouldn't expect them to explain them in the quaterly reports. All that being said, you may be right that the story of this quarter is just stagnant sales and a tough yen.

If R&D was the primary culprit for the quarterly loss, it absolutely would have been mentioned as the reason. They wouldn't go into detail as to what was involved in that R&D spend - but it certainly would have been highlighted as a major cause of the loss. Instead, they only mentioned the drop in sales and currency rates.

A 15% drop in sales is a huge figure when you don't have much room in the margins to begin with. A smallish profit turned into a smallish loss pretty easily with 20B in revenue dropped off the books (and currency losses to boot).

[Canis lupus]

About $1,5 billion, iirc.

In the last year they spend $4bn acquiring new assets then.

[Celine]

I'm not sure where to find net income numbers for Sony's gaming business specifically. All their earnings releases are here, but in the gaming sections, they seem to only release certain numbers, like sales and operating income :S

Taxes are applied to the whole company, not single divisions.

[shinra-bansho]

I still don't understand the discrepancy between these figures and that other report.

last year / same Q1 was 3.2 Mil divided into Ps3 = 1.8 Ps2 = 1.4 this year if both psp and ps3 got lower sales (from above statement) would be something similar 1.7/1.6 ps3 and 1.1/1.2 ps2 in order to match the 2.8 million total of this Quarter

I can't imagine anywhere near that many PS2's were shipped in Q1, considering Q42011 only 0.6M were shipped and the holiday quarter only 0.9M units were shipped.

I just hope it survives to see the launch of the Wii U.

[AniHawk]

$500 million could have gotten them advertising and a few games. They could've farmed out the development work so they wouldn't be left with excess studios after launch.

the vita's problems run a little deeper than that. when they can't convince a high end studio that they own like naughty dog to think outside the box and make a handheld game, they've already fucked up. sony did a lot right in fixing the mistakes of the psp with the vita, and they acknowledged a big problem being the difference in quality and care between their handheld and console efforts with the ps3 and psp, but they haven't actually addressed it with the vita.

i think at a point, they'd just be throwing money down the drain with advertisements.

[gundamkyoukai]

Next gen. You know what that is ? Vita. You know what that is ?

Truth be told Sony should have gotten out of the handheld business .
Compare to there consoles they really don't seem to care as much about there handheld .
It was the same for the psp but the market was not as hard and they got lucky when Crisis Core bring the system back and MH took off.

With Vita things did not seem to change much but they will not market PS4 like Vita for certain .