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[bigtroyjon]

Traders have killed Sony in Japan today, down almost six percent and has hit it's lowest point since 1980.

Brief article

The Walkman and PlayStation maker has lost its innovative edge, falling behind Apple and Samsung Electronics, and guidance for the current financial year has failed to impress.

"I didn't see anything positive in there," a trader at a U.S. bank said. "There is really nothing in there that can justify buying the stock."

"You see the loss narrowing in the TV business. That's fine, but I don't see any future in the TV business, so it doesn't matter what they do."

He said Sony's forecast of 33 million smartphone shipments this business year looked optimistic because its supplier Qualcomm faced capacity constraints and Qualcomm's main priority was to supply Apple Inc, which means Sony may not secure enough chips for its smartphones to meet its target.

Sony shares were at their lowest since September 1980, said the company citing Nikkei Quick data.

 

[Conflict NZ]

Sony has at least had two, likely three overall profitable videogame devices.

Isn't it worse when your third console wipes out the entire profit earned from the first two?

 

[bigtroyjon]

They have never made actual money. Even with these slim to okay quarterly/yearly profits, their initial investment on the 360 is no-where near paid back, though we can't say exactly how much due to them deliberately muddying the waters/hiding losses by rolling divisions together, still billions? Add to that the other 4 billion on the original XB, and where are they now?

How can a company be sure it can compete profitably on its own merits in this space when it never has before? Espescially in a space they still consider strategic.

Sony has at least had two, likely three overall profitable videogame devices. Microsoft has had ZERO.

Spoiler

Nintendo has had nine

Uhh, the 360 has clearly been profitable overall. The entire division is profitable since the 360 has come out and the 360 is the only profit generator.

 

[Karsticles]

Traders have killed Sony in Japan today, down almost six percent and has hit it's lowest point since 1980.

Brief article

You know Sony needs to pick itself up off the ground when it is still referred to as the inventor of the Walkman.

 

[timetokill]

Traders have killed Sony in Japan today, down almost six percent and has hit it's lowest point since 1980.

Brief article

The writing really is on the wall. Like I said before, Kaz should have just cut the TV division entirely and exited the handheld space to focus on mobile and home consoles. Trying to "save" the TV division is a doomed proposition that shows he doesn't have the balls to do what has to be done to turn the company around.

 

[Dreams-Visions]

The writing really is on the wall. Like I said before, Kaz should have just cut the TV division entirely and exited the handheld space to focus on mobile and home consoles. Trying to "save" the TV division is a doomed proposition that shows he doesn't have the balls to do what has to be done to turn the company around.

Taking a hatchet to the company is the wrong thing to do as well.

You can kill a tree by cutting too much too fast and too deep.

 

[D.Lo]

Uhh, the 360 has clearly been profitable overall. The entire division is profitable since the 360 has come out and the 360 is the only profit generator.

The bolded is demonstrably false, the first 2-3 years were multi-billion dollar red-ink bloodbaths, and you may remember a certain RROD billion dollar writeoff?

Please produce figures to prove the division has been profitable overall since the 360's release.

EDIT:
Here, I'll start you off. The 360 launched in November 2005.
Microsoft – Entertainment and Devices Division profit(loss)
2005 (485,000,000)
2006 (1,262,000,000)
2007 (1,892,000,000)
2008 532,000,000
(Calendar years I believe)

Isn't it worse when your third console wipes out the entire profit earned from the first two?

In one sense, but at least Sony has seen profit in this market, unlike Microsoft.

 

[bigtroyjon]

The writing really is on the wall. Like I said before, Kaz should have just cut the TV division entirely and exited the handheld space to focus on mobile and home consoles. Trying to "save" the TV division is a doomed proposition that shows he doesn't have the balls to do what has to be done to turn the company around.

If Kaz came out tomorrow and announced they were killing off TV's and selling all TV production assets to focus on the higher margin profitable divisions, Sony shares would probably double.

Too much pride in that company to do what needs to be done.

 

[Dalthien]

The writing really is on the wall. Like I said before, Kaz should have just cut the TV division entirely and exited the handheld space to focus on mobile and home consoles. Trying to "save" the TV division is a doomed proposition that shows he doesn't have the balls to do what has to be done to turn the company around.

The TV division is the face of Sony though. That's the problem that they have. That's what most people associate with Sony. That's the instant advertising that people see whenever they walk into an electronics shop and see the Sony TVs prominently displayed. The TVs are the Sony brand to the average consumer. People don't know (or care) which company makes the movies they watch. They don't know (or care) which company publishes their favourite bands. They couldn't give a rat's ass that Sony is involved in life insurance or medical equipment. The Playstation brand was up there with the TV brand as a major face of the company - but as with the TV brand, the PS brand has also fallen a long way in terms of mindshare these last number of years.

And the TV is used to lure people into all the other electronics. Once they have someone interested in the TV, it becomes easier to sell them on the other stuff. Here's a Sony blu-ray player for the TV. And here's a Sony receiver and speakers to hook up to the TV and blu-ray player, etc. That's the essence of Sony. Eliminate the TV division, and you'll deal a big blow to a whole range of other Sony electronics as well. That's why Kaz will try a number of different approaches before just cutting the TV division outright. I'm not saying that cutting the TV division would be wrong, because it may very well be the direction that they have to take - but it would completely alter Sony's perception as a consumer electronics company.

I do agree that there was really no point in spending time and manpower and money on Vita though. There was never a clear path to success for the product, and all of that focus and resources could have been better served being directed at giving the PS4 the best possible chance to come out of the gates strong and hit a long-term home-run for the company.

 

[bigtroyjon]

The bolded is demonstrably false, the first 2-3 years were multi-billion dollar red-ink bloodbaths, and you may remember a certain RROD billion dollar writeoff?

Please produce figures to prove the division has been profitable overall since the 360's release.

Knock yourself out

This discussion has been beaten to death so with good searching skills you could probably find it all laid out in a post and not have to do it yourself.

Edit-Found an old post.
2006FY= -1.262
2007FY= -1.892
2008FY= +0.426
2009FY= +0.169
2010FY= +0.679
2011FY= +1.324
2012FY= +0.853

Division is profitable and the rest of the division is a money sink so the 360 could likely be billions in the black at this point.

 

[antonz]

Sony needed to adjust to reality a long time ago that their TVs were staying too expensive. They priced their division into the gutter in the end.

Sony then made a huge deal about OLED then let their competition rip it right out of their hands so now sony has to invest a ton of cash into an OLED competitor.

Knock yourself out

This discussion has been beaten to death so with good searching skills you could probably find it all laid out in a post and not have to do it yourself.

2006 Q4
Home and Entertainment operating loss increased primarily as a result of a $682 million increase in cost of revenue primarily

 

[antonz]

.

 

[Retrocide]

The TV division is the face of Sony though. That's the problem that they have. That's what most people associate with Sony. That's the instant advertising that people see whenever they walk into an electronics shop and see the Sony TVs prominently displayed. The TVs are the Sony brand to the average consumer. People don't know (or care) which company makes the movies they watch. They don't know (or care) which company publishes their favourite bands. They couldn't give a rat's ass that Sony is involved in life insurance or medical equipment. The Playstation brand was up there with the TV brand as a major face of the company - but as with the TV brand, the PS brand has also fallen a long way in terms of mindshare these last number of years.

And the TV is used to lure people into all the other electronics. Once they have someone interested in the TV, it becomes easier to sell them on the other stuff. Here's a Sony blu-ray player for the TV. And here's a Sony receiver and speakers to hook up to the TV and blu-ray player, etc. That's the essence of Sony. Eliminate the TV division, and you'll deal a big blow to a whole range of other Sony electronics as well. That's why Kaz will try a number of different approaches before just cutting the TV division outright. I'm not saying that cutting the TV division would be wrong, because it may very well be the direction that they have to take - but it would completely alter Sony's perception as a consumer electronics company.

I do agree that there was really no point in spending time and manpower and money on Vita though. There was never a clear path to success for the product, and all of that focus and resources could have been better served being directed at giving the PS4 the best possible chance to come out of the gates strong and hit a long-term home-run for the company.

IBM used to know for selling PC's, for the longest time non-Mac PC's were called IBM clones. They didn't stop them from selling its PC business to Levono and IBM is better for it.

 

[darkwing]

Traders have killed Sony in Japan today, down almost six percent and has hit it's lowest point since 1980.

Brief article

so is it time to buy?

 

[antonz]

so is it time to buy?

Analysts say no. Its really hard to say 5 year turn around for profitability is what Kaz promises but its gonna take alot of work

 

[CadetMahoney]

Does anyone honestly think that they are going to somehow manufacture a beastly, powerful system, and in order to compete with Sony on price, take hundreds of dollars of losses per console sold?

No, absolutely not.

They can release a loss-leader model that is more powerful than the PS4 at the same retail price and end the game once and for all. I wouldn't put it past them, MS think in the long term, xbox 1 has proved that.

 

[Dalthien]

IBM used to know for selling PC's, for the longest time non-Mac PC's were called IBM clones. They didn't stop them from selling its PC business to Levono and IBM is better for it.

I'm not saying that Sony shouldn't cut the TV division - I'm explaining why they won't. At least not until they've tried every possible way of somehow salvaging the division.

 

[CadetMahoney]

First, you´re the guy who can´t distinguish between pr and financial forecast.

Play with words, there are some ppl who adopt a "wait and see" to such silly forecasts like they're remotely possible.

Second, it´s really stupid to assume that MS is willing to lose money just because they have it. Most companies sell or close their unprofitable division. MS is no exception. Just because other MS branches are profitable does not mean in any that MS is willing to lose money on the Nextbox.

The loss-leader model for consoles is not some sort of aberration you make it out to be. MS can take that risk more than Sony. Sony took it before after all. Granted PS3 isn't the best example of a successful strategy :0) but it's more common and certainly viable for nextbox.

 

[darkwing]

Analysts say no. Its really hard to say 5 year turn around for profitability is what Kaz promises but its gonna take alot of work

I don't think Sony can survive 4 years of loss

 

[OldJadedGamer]

They can release a loss-leader model that is more powerful than the PS4 at the same retail price and end the game once and for all. I wouldn't put it past them, MS think in the long term, xbox 1 has proved that.

But they need Sony around. MS has already stated that Sony is their biggest customer when it comes to Windows licenses and other products.

 

[D.Lo]

Knock yourself out

This discussion has been beaten to death so with good searching skills you could probably find it all laid out in a post and not have to do it yourself.

Edit-Found an old post.
2006FY= -1.262
2007FY= -1.892
2008FY= +0.426
2009FY= +0.169
2010FY= +0.679
2011FY= +1.324
2012FY= +0.853

Division is profitable and the rest of the division is a money sink so the 360 could likely be billions in the black at this point.

Fair enough, I misread your earlier post as "The division has been profitable SINCE the 360 came out" and was initially refuting that.

The bolded is still speculation though, there's still the original Xbox's losses to take into account as it was in effect a 4 billion dollar advertisement for the 360 in the end, and we're still looking at them taking 7 years to only just make their investment back, a pitiful margin on the whole project, espescially given the US dollar's crash in the meantime.

Will MS investors let them do another project that 'might make its money back around the 8 year mark' simply to continue to have access to living rooms for online services? I think they still might.

 

[bigtroyjon]

Fair enough, I misread your earlier post as "The division has been profitable SINCE the 360 came out" and was initially refuting that.

The bolded is still speculation though, there's still the original Xbox's losses to take into account as it was in effect a 4 billion dollar advertisement for the 360 in the end, and we're still looking at them taking 7 years to only just make their investment back, a pitiful margin on the whole project, espescially given the US dollar's crash in the meantime.

Will MS investors let them do another project that 'might make its money back around the 8 year mark' simply to continue to have access to living rooms for online services? I think they still might.

What in the hell does the US dollar have to do with anything? They do most of their business in the US.

The bolded isn't speculation.

And MS investors don't make any decisions, unless by investors you mean Bill Gates and Steve Ballmer.

 

[BoilersFan23]

Blu-ray needed the PS3 but the PS3 didn't need Blu-ray.

The thing is, if PS3 had no blu-ray player, it still would have cost over $600 to produce it. I remember many cost analysis showed that adding a blu-ray player was only $100 more compared to the Xbox 360 DVD player (bringing PS3 manufacturing costs to the $800 range). I guarantee that Sony allowed to take an extra $100 loss for blu-ray, which worked well for them in the end (because I doubt people would buy PS3 at $500-$600 without blu-ray).

 

[mclem]

2006 Q4
Home and Entertainment operating loss increased primarily as a result of a $682 million increase in cost of revenue primarily

Cost of revenue? My head hurts.

 

[NemesisPrime]

Traders have killed Sony in Japan today, down almost six percent and has hit it's lowest point since 1980.

Brief article

Wow... things are getting serious now. Sony will need to be VERY careful what they do and produce the next few years. Less products is the key IMHO.

 

[REMEMBER CITADEL]

Will MS investors let them do another project that 'might make its money back around the 8 year mark' simply to continue to have access to living rooms for online services? I think they still might.

When entering the business with Xbox they were nobody in the console space. With the 360 they already had a part of the core audience on their side. When the next system launches, they'll be a household name, primarily thanks to Kinect and Live. The circumstances in each of those cases are vastly different and they've been steadily moving forward, both in terms of market/mind share and in terms of profitability. Investors and decision makers will take that into account, they won't expect the next system to be a repeat of Xbox 360, they will expect it to do vastly better because of all the headway the first two consoles have made. It's a double-edged sword, but the next console will undoubtedly have more support from within the company than Xbox 360 did in its infancy.

 

[spwolf]

If Kaz came out tomorrow and announced they were killing off TV's and selling all TV production assets to focus on the higher margin profitable divisions, Sony shares would probably double.

Too much pride in that company to do what needs to be done.

yeah, a lot like Nokia's, lol. Were you supporter of that move as well?
With regards to TVs, nobody is making money on TVs... Samsung is losing money there as well. But just like with PS3's, they want to push hardware (TVs), to sell services that actually will make them money.

Also, if those "smart" investors were actually following Sony, they would know that at least half of those phones wont be powered by Qualcom chips but by Erickson new Thor chips. Based on their phones selling in Europe, I expect them to do more than their projections.

Considering Yen, Tsunami, Thai Floods, Sony's operating loss is not that bad at all.

Their guidance has been good this time around and thats good for the company and investors...

 

[Loudninja]

Sony Falls to 31-Year Low as Forecast Misses Estimates

Sony Corp. (6758) fell to the lowest level in Tokyo trading since 1980, when the Walkman was new and before it introduced the first compact-disc player, after forecasting profit that lagged behind analyst estimates.

Sony tumbled 6.4 percent to 1,135 yen, the lowest level since Aug. 12, 1980. The stock has declined 18 percent this year, extending the 53 percent drop last year.

http://www.bloomberg.com/news/2012-05-11/sony-falls-to-31-year-low-as-forecast-misses-estimates.html

 

[PerZona]

Sony Falls to 31-Year Low as Forecast Misses Estimates

http://www.bloomberg.com/news/2012-05-11/sony-falls-to-31-year-low-as-forecast-misses-estimates.html

Oh my, market value of only $17.5 billion, compared to Apple ($533 billion) and Samsung ($167 billion). Such a HUGE difference. I wonder how would Sony recovers from this, or any Japanese electronics companies.

The Japanese market is looking realllyyyy grim now, especially with the recent tsunami and tornado, I wonder how they would feel =/

 

[Dreams-Visions]

so is it time to buy?

Hell no. Have they shown you signs of life beyond the gaming division?

Oh my, market value of only $17.5 billion, compared to Apple ($533 billion) and Samsung ($167 billion). Such a HUGE difference. I wonder how would Sony recovers from this, or any Japanese electronics companies.

The Japanese market is looking realllyyyy grim now, especially with the recent tsunami and tornado, I wonder how they would feel =/

Doesn't seem like they can. They've been trying for a decade to recover, but they just can't seem to do it. Too many chiefs, not enough indians. too many divisions (figuratively, literally) and not enough cooperation and interdependence. No singular vision to create a clear suite of products that don't cannibalize each other. No collective focus.

Their last few restructuring efforts were supposed to fix that. They really haven't.

 

[Synth_floyd]

Wow Samsung is almost 10x bigger than Sony.

 

[iamshadowlark]

Link to tv usage, includes % time watching DVD/VCR

It's broken down by demo but I'll just use the demo with the highest DVD/VCR time.
Average TV time a week is 32.86 hours. 5% of that time is spent on DVD/VCR which equals 1.64 hours a week or 6.57 hours a month.

Link to internet video stats

180 million Americans are watching 21.8 hours of internet video a month.

Link to Netflix stats
20 million customers watching 33 hours of content a month.


As I said, the time spent watching streaming or internet video is by far more than time spent watching physical media.

bwhhahahhahah cmon dude. I'm not gonna even comment on whats wrong with this.


Try again.

 

[DopeyFish]

Fair enough, I misread your earlier post as "The division has been profitable SINCE the 360 came out" and was initially refuting that.

The bolded is still speculation though, there's still the original Xbox's losses to take into account as it was in effect a 4 billion dollar advertisement for the 360 in the end, and we're still looking at them taking 7 years to only just make their investment back, a pitiful margin on the whole project, espescially given the US dollar's crash in the meantime.

Will MS investors let them do another project that 'might make its money back around the 8 year mark' simply to continue to have access to living rooms for online services? I think they still might.

Lol. Losses aren't taken as a whole. They are taken from quarter to quarter.

Xbox "losses" are so insignificant to Microsoft... You could take all the losses of Xbox from 11 years and stack them in one year and they'd still have a profit. Even probably a quarter.

 

[Agent Unknown]

Pride goeth before a fall and Sony is falling big time. They need to get organized and stop all the infighting with managers, cut waaaaay back on the countless models of TVs, stop forcing customers to use endless forms of proprietary storage media, and make amends for the poor Vita launch while being extremely careful with how they design and price the PS4.