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Sony Q1 Results: $312 Million Loss
- Thread starter Parmenides
- Start date
Canis lupus
Member
I do think Sony would ultimatly revise their PSP+PSV sales to 10m.
Loghorn150
Banned
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
Member
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 .
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 .
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
Banned
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
Banned
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.
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.
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.
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...
Alright, alright.
Can we get a NET annual income graph? Line graph would be preferable (sorry!).
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
Member
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?
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
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.
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.
I wouldn't mind this. It would be perfect
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.
Castor Krieg
Banned
Canis lupus
Member
IonicSnake
Banned
So if Sony didn't buy Gaikai would they have made profit? 
Forgive my ignorance.
ThisWreckage
Banned
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.
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
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
Banned
Sony's new cloud gaming devision had a profit for being sold. lolSo if Sony didn't buy Gaikai would they have made profit?
Forgive my ignorance.
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.
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.
I was under the impression the acquisition still needed to be approved?So if Sony didn't buy Gaikai would they have made profit?
Forgive my ignorance.
Canis lupus
Member
What? PS3 is selling the most consoles so how do they lack the vision to sell?
Gaikai buyout was small bucks compared to the $2,2 billion EMI Music acquisition.So if Sony didn't buy Gaikai would they have made profit?
Forgive my ignorance.
ThisWreckage
Banned
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.
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.
Canis lupus
Member
$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
Banned
I'm sure he's been corrected, but I remember 5 billion in losses, not 500 million.
Canis lupus
Member
You already know how next gen will play out? I wouldnt use PSV as an example for PS4.
About $1,5 billion, iirc.
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.
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.
Yep.
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
Member
Taxes are applied to the whole company, not single divisions.
shinra-bansho
Member
I still don't understand the discrepancy between these figures and that other report.
I just hope it survives to see the launch of the Wii U.
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.
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
Member
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 .
Do you know how crazy you sound?
Sony despite performing selling relatively well(in the console space) at this point lacks vision to sell to customers(in the console space).
And your only justification is how another product in a different market is performing?
Thanks, that makes sense. I feel kinda dumb now.
Sony Gaming Division/Entertainment Division Operating Income
Y/E 1998 $902,811,090
Y/E 1999 $1,102,563,557
Y/E 2000 $722,738,949
Y/E 2001 -$449,776,290
Y/E 2002 $629,101,056
Y/E 2003 $935,569,253
Y/E 2004 $627,195,212
Y/E 2005 $419,888,799
Y/E 2006 $69,129,058
Y/E 2007 -$1,970,923,859
Y/E 2008 -$1,079,994,103
Y/E 2009 -$664,313,787
Y/E 10Q1 -$413,541,667
Y/E 10Q2 -$653,333,333
Y/E 10Q3 $210,629,750
Total
$387,078,407
They were $387 million ahead as of Q3 2010.
murderofMonkey
Banned
sony was still building up there sce while nintendo was as big as ever since ~ 1995. im not sure how this is affecting the operatin income, though