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Merrill Lynch says: PS3 will KILL Sony - Huge costs for MASSIVE DAMAGE.

They predict that Sony will lose $6.3B over 5 years on the PS3.

http://ce.seekingalpha.com/article/20369

Merrill Lynch (MER), perhaps the biggest Sony (SNE) hater, downward revised its financial forecast and cut its target share price today. ML also estimated a multi-billion dollar 5-year total operating loss related to the PlayStation 3.

FISCO news service of Japan reported on the ML analyst report. Details of the downward revised financials were not provided.

Target share price revision: ¥4,700 --> ¥4,000 ($40.05 --> $34.09 at ¥117.35/US$1)

Total PS3 operating loss expected over 5 years: ¥738.9 billion ($6.3 billion at ¥117.35/US$1)

The PS3 goes on sale in Japan tomorrow, but there will be extremely tight supplies. A quick sellout will likely make headlines, but doesn't mean much since there will reportedly be only 80,000 units for sale, after a recent 20% cut from 100,000 units. The PS2 sold nearly 1 million units in Japan in the three days following its launch in 2000.

The PS3 launches in the U.S. on the 17th with an available supply of around 400,000 units, although stores have reportedly sold-out of pre-orders.

Sony's CFO recently confirmed the firm still plans to sell 6 million PS3s by the end of next March.

Sony's ordinary shares (Tokyo: 6758) lost 1.48% today to close at ¥4,670 ($39.80 at ¥117.35/US$1). Its ADRs lost 2.71% yesterday, closing at $39.84
 

davepoobond

you can't put a price on sparks
RaijinFY said:
At this is level, it is not massive damage, this is fatal damage.


so people who want sony to die should buy a PS3. Sony has made a product that appeals to all gamers after all!
 

Danthrax

Batteries the CRISIS!
You know what happens when expectations are lowered?

Everyone is surprised when you don't suck.
 
That's it guys...Merrill Lynch knows best.

PS3 is going to kill Sony. It's all over.

Has anyone ever seen the movie "Ground Hog Day" with Bill Murray?

I get that feeling like I'm stuck in a media time-warp and I keep seeing the same article over and over again.
 
Last I heard from my SCEE mates, Sony are(is) losing $450 per console and are scheduled to start breaking as late as summer 2007. That's a HUGE amount of loss they'll be collecting over the next few months. It'll take a while to claw back, maybe the whole lifecycle?
 

gofreak

GAF's Bob Woodward
marvelharvey said:
Last I heard from my SCEE mates, Sony are(is) losing $450 per console and are scheduled to start breaking as late as summer 2007.

If that were true, it wouldn't strike me as "late" at all. I'd be immensely surprised if they were breaking even that soon!
 

Amir0x

Banned
gofreak said:
If that were true, it wouldn't strike me as "late" at all. I'd be immensely surprised if they were breaking even that soon!

yeah at $450, breaking even by summer 2007 would be a freaking christmas miracle :lol
 

Dante

Member
images824760.jpg


Someone forgot to tell these guys they were doomed.
 

Elios83

Member
Merrill Lynch (MER), perhaps the biggest Sony (SNE) hater

Ummmm :lol :lol

They predict that Sony will lose $6.3B over 5 years on the PS3

They believe that Sony will lose money on PS3 for 5 years?Afaik Sony forecasts big losses for the first year (ending March 2007) and then profits for the following years,as happened for Ps2.
 

Klocker

Member
gofreak said:
If that were true, it wouldn't strike me as "late" at all. I'd be immensely surprised if they were breaking even that soon!

agreed

I'm thinking mid-late 2008 for profitability
 

Busty

Banned
I think it's important to actually try and put into perspective just how badly the PS3 could flop. This isn't Sony's second piece of hardware ever. This is the fourth (ignoring revisions) Playstation branded platform, you don't get to sell over (iirc) 220 MILLION units of hardware across the brand by luck.

A worst case scenario for Sony would be.... after 5 years, they've only managed 20-30 milllion units. I will go as far as to say, it's impossible for Sony to sell less than 10 million PS3 units this upcoming gen, oversay, five or six years, .... impossible.

I'll bet a shiny penny that Meryll Lynch didn't take Sony online digital distribution plan into account at all. That alone is a major piece of the puzzle for Sony. I can see Sony pushing the PNP (for better or worse) angle as another direct competitor to iTunes.

That is all.
 

Tieno

Member
Dante said:
http://akiba.ascii24.com/akiba/news/2006/11/10/images/images824760.jpg

Someone forgot to tell these guys they were doomed.
:lol :lol :lol :lol Great succes!
 

jimbo

Banned
Wow. Who said MS's plan wasn't working? ;)

I hope that's really not the case because I would absolutely hate for Sony to lose that much money and be forced into a situation where they may have to fold their tents. This is exactly why MS doesn't mind going head to head with Sony. They don't have to beat them fairly. They can just bleed them to death.

Props to Nintendo for taking the direction they are, as far as business goes. They're really sitting pretty right about now even though as a gamer I wanted much more out of the Wii.
 

Zaptruder

Banned
Is there a more thorough breakdown of how the losses will occur?

I find it hard to believe, given that Sony is manufacturing most of its own components, which should drive down cost relatively quickly... and that it the PS3 will be their gateway to quite a few revenue streams, including downloadable content, BD and the traditional games.
 

DarienA

The black man everyone at Activision can agree on
Moderation Unlimited said:
That's it guys...Merrill Lynch is knows best.

PS3 is going to kill Sony. It's all over.

Has anyone ever seen the movie "Ground Hog Day" with Bill Murray?

I get that feeling like I'm stuck in a media time-warp and I keep seeing the same article over and over again.

Love that movie... and I feel the same way.
 

jedimike

Member
gofreak said:
If that were true, it wouldn't strike me as "late" at all. I'd be immensely surprised if they were breaking even that soon!

Reread his post again... he said breaking not breaking even. Given the fact that PS3's need a firmware upgrade on day one, I'd say there will plenty of breaking before that.
 
_leech_ said:
I think they're doom & gloom central for anything Sony related.

They push, promote, and sell Microsoft financial products....of course they are biased. It is in their best business interest to spin any Sony news in a negative light.
 

Stinkles

Clothed, sober, cooperative
I like how Gaf thinks Financial Services and analysts have console bias. Like the CEO of ML is all, "omg MGS4 is gonna blow you eneds to get mario galaxy bitch."
 

MegaTen

Banned
I could've sworn this same topic was created in the past. Unless it was just a feeling of deja vu when I read the title..
 

Elios83

Member
Amir0x said:
Someone forgot how the line for PSP was in Japan when it launched ;)

Much smaller with bigger announced supply (200k) actually.
But of course launch is not representative of a console success over its lifecycle ;)
 
Amir0x said:
Someone forgot how the line for PSP was in Japan when it launched ;)

I think the PSP's failure in Japan has more to do with marketing the machine as a convergence device instead of a portable gaming console more than anything else. That was really stupid of Sony to do, and they probably wished they had focused more on games support for the PSP (and added another analog control nubb).
 
Moderation Unlimited said:
They push, promote, and sell Microsoft financial products....of course they are biased. It is in their best business interest to spin any Sony news in a negative light.

:lol Didn't know that. Wow, if they are doing business with Microsoft that's really really pathetic since Merill Lynch is the center of PS3 negative predictions.
 

Danthrax

Batteries the CRISIS!
Dante said:
http://akiba.ascii24.com/akiba/news/2006/11/10/images/images824760.jpg

Someone forgot to tell these guys they were doomed.

Wow. That looks like a screenshot of Dead Rising.
 
Stinkles said:
I like how Gaf thinks Financial Services and analysts have console bias. Like the CEO of ML is all, "omg MGS4 is gonna blow you eneds to get mario galaxy bitch."

They can't report skewed or misappropriated facts...but they can spin for one client or another.

It is a business after all. Are you part of the financial services industry mr. stinkles?
 

ToxicAdam

Member
I wonder if the mainstream media (and financial peeps) will ever truley "catch up" to what is going on in this industry. They always seem 3-4 months behind the curve.

It's like someone at ML just digested all the information provided at E3, then releases this report.
 

LevelNth

Banned
Amir0x said:
Someone forgot how the line for PSP was in Japan when it launched ;)
Bigger than the lines for the DSL? :)

The PS3 lines are retarded huge, especially when you consider that everyone knew there'd only be 100k units (if that).
 
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