Eventually leading to 3DO2?
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AMerican Hedge Fund Manager attempts to break up Sony
- Thread starter Rourkey
- Start date
Eventually leading to 3DO2?
More like this is the last time the graph was made available to us plebs. If you're expecting the gains to outweigh that loss, though, you're living in a fantasy land.
thequickandthedead
Member
About that...
The PS1 was more profitable than the PS2?
That's not what the chart says.
It just says that in those years the game division made less money than in the PS2 days. But they were spending a fortune on PS3 R&D and buying fabs and so on.
From the 2003 report
http://www.sony.net/SonyInfo/IR/financial/ar/qfhh7c000000g7z4-att/e_ar2003.pdf
On R&D
On Fabs
They probably didn't sell the console at as big of a loss as they did the PS2 and PS3, so it turned a profit quicker.
fabricated backlash
Member
Since you blew the first reference, I'll give you another chance:
Would you say Pride and Honour play a large role in Japanese stock markets?
zomgbbqftw
Banned
He can talk all he likes. It's not going to get anywhere. The idea is that Sony spin off the bank, bring in $15bn and then return that to shareholders and he gets paid.
Part of me says that having the bank and media divisions allows the electronics divisions to slack off (by results Sony's electronic divisions posted a combined operating loss of 180bn yen) and it slows the pace of reform, but I'm quite sure that the glacial pace of Japanese management and reform would still exist at Sony with or without the profitable media and finance divisions. So really it seems like having divisions that consistently post operating profits of 250bn yen buys the electronics division time to reform.
Otherwise one only needs to look at Sharp and Panasonic to see what happens to Japanese companies who have not been able to keep up with the latest trends. There is absolutely no doubt in my mind that Sony are in better shape than the other major CE companies in Japan. Toshiba are doing the best because they essentially bowed out of the industry in 2009 after the failure of HD DVD, what a great decision that turned out to be for them. Toshiba seemed to see where it was all heading and invested in semi-conductors and infrastructure, and it has worked out very well.
The natural defence for Sony from this is to for them to merge with Toshiba and create a $50bn company in which Loeb will have a difficult time in exerting control.
Part of me says that having the bank and media divisions allows the electronics divisions to slack off (by results Sony's electronic divisions posted a combined operating loss of 180bn yen) and it slows the pace of reform, but I'm quite sure that the glacial pace of Japanese management and reform would still exist at Sony with or without the profitable media and finance divisions. So really it seems like having divisions that consistently post operating profits of 250bn yen buys the electronics division time to reform.
Otherwise one only needs to look at Sharp and Panasonic to see what happens to Japanese companies who have not been able to keep up with the latest trends. There is absolutely no doubt in my mind that Sony are in better shape than the other major CE companies in Japan. Toshiba are doing the best because they essentially bowed out of the industry in 2009 after the failure of HD DVD, what a great decision that turned out to be for them. Toshiba seemed to see where it was all heading and invested in semi-conductors and infrastructure, and it has worked out very well.
The natural defence for Sony from this is to for them to merge with Toshiba and create a $50bn company in which Loeb will have a difficult time in exerting control.
No, I got
EDIT: Perhaps I'm just a bit touchy tonight, but "are you an expert?" read to me as "are you an idiot?"
vivftp
Member
Was waiting for your post zomg, thanks 
Out of curiousity, do Sony and Toshiba have any sort of working relationship in any way, shape or form? I take it Toshiba is just too large for Sony to buy outright, which is why you're suggesting a merger. I'd always heard Japanese companies weren't too keen on working with one another due to decades of competition, but I suppose Sonys recent ties with Panasonic and Olympus show they're willing to work with their neighbours.
Out of curiousity, do Sony and Toshiba have any sort of working relationship in any way, shape or form? I take it Toshiba is just too large for Sony to buy outright, which is why you're suggesting a merger. I'd always heard Japanese companies weren't too keen on working with one another due to decades of competition, but I suppose Sonys recent ties with Panasonic and Olympus show they're willing to work with their neighbours.
ambientmystic
Member
After the fallout of their battle royale during the HDDVD vs Bluray days?
That is one grudge Sony hasn't forgotten, it was a costly, bloody war, with the movie moguls and studios pretty much deciding the outcome, consumer adoption only playing second fiddle.
Microsoft backed the wrong horse during that era too going as far as to make a HD DVD drive for their 360 consoles, and now they're going to be forced to use Sony patented Bluray drives in their next XBOX, how ironic.
In your dreams zomgbbqftw, in your dreams.
1st Course
Member
Auto_aim1
MeisaMcCaffrey
Sony has responded.
Sony says entertainment businesses not for sale
http://news.yahoo.com/sony-says-entertainment-businesses-not-sale-074723929.html
Sony says entertainment businesses not for sale
http://news.yahoo.com/sony-says-entertainment-businesses-not-sale-074723929.html
Don't feel bad. That's the way it reads to me every time someone trots out that tired meme as a response to a serious post.
vivftp
Member
I seem to recall Kaz himself saying something similar not too long ago.
I REALLY hope Sony can muster their entertainment divisions into something huge and desirable. Seriously, is there any reason why Sony couldn't build a Netflix competitor that's superior in every way, shape and form? Would be nice to have some sort of package where for a single fee you get a Netflix equivelant (Video unlimited is too meh IMO), Music Unlimited and either Playstation Plus, or something even better. I mean PS+ is already only $50 for a year, they had that deal for Music Unlimited 1 year sub for only $12, and if they could get a Netflix competitor for a similar price to Netflix itself, I'd gladly pay for that all in one service.
OTOH wasn't Sony supposed to come out with some sort of internet TV service? I wonder how those plans are going? Seems like they have a lot of things in the works... just a matter of time until we see them I suppose.
Loeb's 4 pages letter should really be added to the OP.
The tone is much different than when he fought with Yahoo's management.
fabricated backlash
Member
I'd say you're a bit touchy. It's merely a friendly jab, nothing else.
tehrik-e-insaaf
Member
Hostile takeovers are so rare in Japan, that there isn't a lot of case law around it. There are some provisions built into existing securities law that requires hostile bidders to make a bid or cease accumulating stock - that triggers at a far lower threshold than comparable US law. If anything, it should be easier legally to take over a company in Japan, the real issue is whether one can do anything with it since you will probably see a huge number of resignations - leaving the company a shell of its former self.
What Japanese executives typically do in difficult situations, is go to trusted banks and mutual funds and have them hold large positions of the company, and basically "hold out" until the activist leaves. They then feed inside information to the bankers so that the bank is rewarded for stepping in to save the management team. I know this sounds nuts - but it happens in American too - just in a different way - and usually through equity research guys.
That said, let's not forget that Loeb essentially walked all over Jerry Yang and a bunch of people at Yahoo, which was highly insulated for years, and made 50% on his investment there when everyone else had given up on it. He plays really hard, and he's already thought about all the various scenarios here, even taking into account the fact that Sony is a Japanese company and he is dealing in a different culture. Probably one of the reasons why he hand-delivered a note to the CEO and told him he intended to be "partners" with him. "Kill them with kindness" is probably Loeb's attitude here.
No matter which way to spin it, Sony is bleeding right now, Loeb stepping into the picture is not a good sign because it's just going to make it all that much more difficult for management to buy time to keep executing on the turn-around plan. At best they can just hope they pay Loeb some sort of a "Wall Street Tax" and get him to go away - at worse they are going to have to accelerate sell-offs of some businesses at sub-optimal prices or even do an IPO of Sony Entertainment which will distract them from more important things like running their core businesses.
TheBryanJZX90
Member
The graph immediately above your post would seem to disagree with you.
zomgbbqftw
Banned
Was waiting for your post zomg, thanks
Out of curiousity, do Sony and Toshiba have any sort of working relationship in any way, shape or form? I take it Toshiba is just too large for Sony to buy outright, which is why you're suggesting a merger. I'd always heard Japanese companies weren't too keen on working with one another due to decades of competition, but I suppose Sonys recent ties with Panasonic and Olympus show they're willing to work with their neighbours.
Err, no worries?
Well Sony and Toshiba already have a decentish working relationship and the overlap in their respective businesses is quite small ever since Toshiba bowed out of mass market consumer electronics. They still release TVs and DVD players etc... but their stake in the industry is very small and they build their stuff using all off the shelf parts rather than doing it in house so they buy panels from the likes of AUO and Samsung and just sell their TVs with a very low margin just to have presence in the market rather than Sony who work on new technologies and build a lot of the components in house and add big margins to their electronics products.
Toshiba have state of the art semi-conductor fabrication lines but right now a lot of them are running below maximum utilisation because of price dumping from Korea. Merging with Sony will allow for a much higher level of utilisation of these plants and for the new merged company to lower the cost base for consumer electronics like smartphones and tablets. For Toshiba, Sony have a lot more cash which could be used to invest in their semi-conductor foundries to ensure they stay ahead of the competition. That deal would make sense on many, many levels and with all of this hostile action from outside forces the Japanese government may pave the way for such a deal to pass regulatory requirements.
LOL! Maybe some format war fanboys think this way, but in business this kind of stuff gets forgotten very quickly. Toshiba currently fabricate the SoC for PS Vita and sell Sony copious amounts of NAND for Xperia smartphones at a huge discount.
Toshiba and Sony are both seen as black sheep of Japanese industry a merger between them would make a lot of sense.
Shao Kahn Brewing a Stew
Banned
DOOMEDDDDD!!!! Fuck everything after 2009!
This post was very, very, very interesting. Thank you.
tehrik-e-insaaf
Member
FYI
http://www.gamesindustry.biz/articl...tion-division-suffers-full-year-USD2-8bn-loss
Just to get you started ... that year alone wiped out all profits from all years of operating profits
I wonder if this guy is trying to do the same thing Icahn did with Lionsgate? Buy up shares and cause as much chaos as possible knowing that the shareholders would never buy his plans and the company would have to pay him a fortune for his shares to boot him out.
In saying that I still expect Sony to sell their film & TV divisions in a few years regardless. It's been said countless times in the past that Hirai doesn't like Sony's media divisions and wants out. Hence the constant rumours.
In saying that I still expect Sony to sell their film & TV divisions in a few years regardless. It's been said countless times in the past that Hirai doesn't like Sony's media divisions and wants out. Hence the constant rumours.
zomgbbqftw
Banned
Supposedly his stance has been softening in the past few months. No word on why, but we've had chatter in the City that he has come around to a new viewpoint on the media divisions.
We've been told over and over again that the divisions are not for sale privately and via public statements, I am starting to believe the chatter that Kaz has formed a new opinion on their media divisions.
I know he values the banking and finance division way too much to spin it off. In fact Sony Bank is expanding into Asia and my bank estimates that they will make a good go of it, I think our internal target is for Sony Bank to hit around 300bn yen of operating profits by 2015/16. It is out view that Sony will go the way of GE and GEC, where their major division is actually the bank and the other divisions are just side pursuits which are profitable from time to time. GEC produces around 50% of GE's total net profit annually, I think Sony are headed in the same direction.
Pristine_Condition
Member
Last time I heard, Sharp was stabilizing and getting some big cash injections. Is that not the case?
tehrik-e-insaaf
Member
If Playstation hardware goes the way of the dodo after this gen (which is entirely possible), I could see Sony packaging up its game studios, streaming platforms, movie studios, music studios, and rebrand them as the "Playstation Company" or something similar, and spinning it off into a consumer media business that is Western-centric and run by US executives - focusing on making movies, games, and music for their key intellectual properties (across all platforms)...
They'll probably keep everything else running because of the massive amounts of jobs that would be lost in Japan if they didn't - but the company would strictly be a mature company with few growth businesses at that point... as zomg points out - they'd prolly just focus on their banking business in Asia and industrial finance...
vivftp
Member
Sharp just posted their largest loss in history of 5.36 billion. It doesn't appear they are stabilizing.
As a side note, I wonder how profitable the medical industry will be for Sony.
isn't the timing off? it feels either too early or too late.
too late because it might have been an option when they were really in a hole to raise capital, but at the moment it looks like they're turning it around already so emergency actions aren't as neccesary.
too early because if they continue the turnaround and get the CE side in shape, that might be a decent time to spin off other less core activities.
too late because it might have been an option when they were really in a hole to raise capital, but at the moment it looks like they're turning it around already so emergency actions aren't as neccesary.
too early because if they continue the turnaround and get the CE side in shape, that might be a decent time to spin off other less core activities.
Regardless of Kaz's view on film and TV I'd still find it a good move to spin-off Sony Pictures, Sony Music and SCE into one company gathering up all media business (Still under control of mothership Sony but safe from problems of other divisions). The only problem would be splitting up hardware and software for SCE. But packing it up into one company should raise synergy between them. They should be working on streaming solutions together.
This is actually in exact opposition for what is Kaz's plan for Sony, though. He wants to integrate all of the subsidiaries to work together and spinning-off the 3 media centered sections in the company would go directly against it. This might have been an option earlier when various departments within Sony weren't working together but right now it seems as though they are finally coming around to the idea that they can talk to each other and help create the products that way.
gundamkyoukai
Member
It going to be interesting to see how many big Japanese consumer electronic companies going to be left by the end of the decade .
I expect Sony to merge or buy a fair amount of assets after all is said and done .
As for the company breaking apart i don't see it happening right now that Kaz has gotten things semi under control .
They most likely will fight it any way they can at least for next few years .
I expect Sony to merge or buy a fair amount of assets after all is said and done .
As for the company breaking apart i don't see it happening right now that Kaz has gotten things semi under control .
They most likely will fight it any way they can at least for next few years .
Interesting. Everything I've heard about SPE recently has been about the pretty drastic cuts that they've been experiencing. Under Amy Pascal SPE were a deep pocketed, free spending studio but those days are long gone.
Apparently many 'event movies' at SPE are getting shelved (like Invertigo which, having read the script, would have been EXPENSIVE) or redeveloped in favour of smaller, cheaper projects like comedies.
Such moves suggest one of two things. Either Sony simply don't have the capital to pour sacks of money into SPE anymore or Sony are cutting the studio's budget to the bone in an effort to get larger profit margins that way. The latter, given SPE's huge staff and overhead, seems a very short term fix to what is a larger 'issue'.
That could certainly be a possibility but it does a little like throwing the baby out with the bathwater. The idea of a Gaikai powered, one wire into the house doing everything solution from Sony seems a potent one but why would they need a studio to realise this? They could simply do with a deal with everyone else regardless which they would still need to do regardless.
The film & TV will never be integrated into Sony. Ever. It's been twenty years since Sony bought Tristar and Columbia and what has changed? Nothing. The culture is too fractured and the divisions too distrustful of each other.
If it were truly coming together Sony wouldn't have passed on all those SCE-WWS IPs like God Of War (at Universal) or that Ratchet & Clank project which got bounced so far down the tree it's being done as an independent production.
If they couldn't make it work under Howard Stringer who LOVED the media divisions then Kaz who has, at best, an indifference to them isn't going to be able to bring them together.
zomgbbqftw
Banned
Capital raising. Sony are supposedly going to raise capital externally for the first time ever to make movies. Sony's legendary deep pockets are considerably shallower after 4 years of losses.
$13bn in debt and $7bn in cash. That's the crux of it. Until Sony reduces that debt and builds up a larger cash reserve (or cuts it's stated required cash ratio) SPE will be looking at a few lean years. Honestly they need it, too much money wasted on projects that are going to perform poorly and not nearly enough investment in TV programming which is now showing a greater level of profitability that movie production.
Projects like After Earth and White House Down are costly and will have a poor ROI. I expect these to be the last of the big budget SPE movies other than whatever they make for the Spider-Man franchise which is guaranteed money.
iceatcs
Junior Member
Poor you.
1.21Gigawatts
Banned
Ps4 is now a Smartphone and NaughtyDog and SantaMonica will make touch based minigames for it.
Captain Tuttle
Member
As long as the gaming division can be healthy I couldn't care less (outside of the internet forum drama this provides *chuckles*).
Doesn't seem like it would have a major impact on SCE, since they'd do fine as long as they avoid PS3 level money sinks and not having the other attached industries would likely preclude that kind of model anyhow.
It's not like Sony cross licenses tons of their products. SCE doesn't hand off IPs to SPE and SPE doesn't hand them back to SCE. If they did this would have a lot more impact, but they do nothing of the sort.
It's a real shame actually. SPE could mine some solid movie IPs from the gaming side and SPE has a handful of movie rights that would make great video games (Starship Troopers for example).
It's not like Sony cross licenses tons of their products. SCE doesn't hand off IPs to SPE and SPE doesn't hand them back to SCE. If they did this would have a lot more impact, but they do nothing of the sort.
It's a real shame actually. SPE could mine some solid movie IPs from the gaming side and SPE has a handful of movie rights that would make great video games (Starship Troopers for example).
Which will get cancelled in favor of some Zelda games hitting Phillips new console.
No, they're not. That's why they are "money people."
scytheavatar
Member
The thing is, what exactly is the advantage of the content and hardware people working together? Don't forget that the main reason why Sony got bodied by Apple was because of the content people interfering and messing with Sony's MP3 player plans. What exactly could the content people provide that'll make people happy to buy Sony mobile phones and tablets? If Sony tries to push their music and movies into their hardware products do you think that'll be something Sony pictures and Sony music's rivals will be happy about?
Good luck trying to bully Japanese business.
mentalfloss
Banned
Yup. The American govt might be in the pocket of Wall Street, but the Japanese govt is in the pocket of Keidanren. Further, Shinzō Abe is a fierce nationalist, a hostile foreign attack against a national economic symbol would be met with the same resolve that he has shown towards protecting the Japanese ownership of the Senkakus. Loeb's only real chance is to use Japanese proxies to force his will. But whatever the outcome, having this shit happen can only hurt Sony.
Even when you're just internally restructuring everything, grouping those three would be the most logical though. You'd have Media Entertainment, Banking, Consumer Electronics and Medical Imagining.