Support NeoGAF

[coolasj19]

I understand how exclusives work, my point was how sustainable is this business model in the future which is why I touched on things like Plus memberships and other services that tie into the Playstation experience. The cost to produce these games don't seem to be going down for titles like Killzone, those flagship titles.

Sony in the past was better positioned because the Sony brand meant something outside of games. The point of this conversation was how much impact will the PS4 be to Sony as a whole? Sony has done a tremendous job marketing to the core gaming audience and if the PS4 is the success many of us think it is it will sell very well, but where does the gaming audience take the company? The PS2 drove DVD sales, the PS3 drove bluray sales but the system cost them dearly. What tentacles will the PS4 do that can bring the company back?

If Heavy Rain took 20 Million to make. And totaled out to 50 Million with advertising. And made 120 Million-ish dollars. And only sold 2 million copies. I think It's very sustainable. Uncharted 2 took 20 million to make. And honestly, that's probably the baseline most common number for all of the bigger Sony exclusives. I think if you take all the cost and itemize them, Playstation lost money because the PS3 was stupidly expensive to make. Even when it dropped to $400 it was still losing money. It was almost never being sold at a profit. WWS is profitable. They've recently trimmed out any fat no matter how much we loved their games ( Zipper, Liverpool, BigBig, Incognito [?] ), and they've stopped acquiring and instead moved to expanding studios ( Naughty Dog, Santa Monica, Sucker Punch [?] ). They aren't spending money anymore. There shouldn't be any waste. And even their lowest selling games should turn profits.

I went on a tangent. Gaming is not to to reVitalize the company all on it's own. But, it will start turning a profit. And it should be a very healthy one at that. If anything, they need to cut TV's and Vaio's. And they need to double down on stuff that makes them money. Media. Sony Pictures needs to step it up hard. Make more Breaking Bads, the movies sector needs to stop randomly losing money, and then they need to make those co-operate with Playstation. Which, if the SPE CEO showing up at E3 means anything, means they are well on there way to doing so (go watch it again, they really say they're doubling down on Playstation x SPE).

I say this everywhere I go but, I think before they cut Vaio and TV, they integrate VTV components into them and see what happens. If they can get 20-30 million of those a year into houses and put their services through them, that'll do good. They just need to launch it the right way.

TL;DR : Sony needs to be Apple. I've always likened them to a disjointed Apple. All they need to do is build a super compelling ecosystem. One that would be absolutely stupid to buy out of. It starts with the PS4.

 

[Chinpoko_Master]

It's more likely to be the death of Sony.

The PS4 is shaping up to be the most successful product Sony has had in a long time. So yeah, no.

 

[TetraGenesis]

If Heavy Rain took 20 Million to make. And totaled out to 50 Million with advertising. And made 120 Million-ish dollars. And only sold 2 million copies. I think It's very sustainable. Uncharted 2 took 20 million to make. And honestly, that's probably the baseline most common number for all of the bigger Sony exclusives. I think if you take all the cost and itemize them, Playstation lost money because the PS3 was stupidly expensive to make. Even when it dropped to $400 it was still losing money. It was almost never being sold at a profit. WWS is profitable. They've recently trimmed out any fat no matter how much we loved their games ( Zipper, Liverpool, BigBig, Incognito [?] ), and they've stopped acquiring and instead moved to expanding studios ( Naughty Dog, Santa Monica, Sucker Punch [?] ). They aren't spending money anymore. There shouldn't be any waste. And even their lowest selling games should turn profits.

I went on a tangent. Gaming is not to to reVitalize the company all on it's own. But, it will start turning a profit. And it should be a very healthy one at that. If anything, they need to cut TV's and Vaio's. And they need to double down on stuff that makes them money. Media. Sony Pictures needs to step it up hard. Make more Breaking Bads, the movies sector needs to stop randomly losing money, and then they need to make those co-operate with Playstation. Which, if the SPE CEO showing up at E3 means anything, means they are well on there way to doing so (go watch it again, they really say they're doubling down on Playstation x SPE).

I say this everywhere I go but, I think before they cut Vaio and TV, they integrate VTV components into them and see what happens. If they can get 20-30 million of those a year into houses and put their services through them, that'll do good. They just need to launch it the right way.

TL;DR : Sony needs to be Apple. I've always likened them to a disjointed Apple. All they need to do is build a super compelling ecosystem. One that would be absolutely stupid to buy out of. It starts with the PS4.

I don't think I've ever told you, but I really like your posts (titles and all!). We have very similar perspectives it seems.

 

[Hyperactivity]

They need ps2 numbers and via attach rates

 

[casiopao]

I think they're reconstructing and as a result they will become healthier. At the moment they're still in the weeds, especially with the loss for every PS4 sold, so they're expecting to lose money on their newest product. But if they keep downsizing and closing the unnecessary departments and begin focusing on what are their money makers, then I think they'll be in good standnig... eventually.

One must be hopeful.

T___T Sadly, one of the unnecessary department who keep losing money here for Sony here is gaming department.

 

[tbm24]

If Heavy Rain took 20 Million to make. And totaled out to 50 Million with advertising. And made 120 Million-ish dollars. And only sold 2 million copies. I think It's very sustainable. Uncharted 2 took 20 million to make. And honestly, that's probably the baseline most common number for all of the bigger Sony exclusives. I think if you take all the cost and itemize them, Playstation lost money because the PS3 was stupidly expensive to make. Even when it dropped to $400 it was still losing money. It was almost never being sold at a profit. WWS is profitable. They've recently trimmed out any fat no matter how much we loved their games ( Zipper, Liverpool, BigBig, Incognito [?] ), and they've stopped acquiring and instead moved to expanding studios ( Naughty Dog, Santa Monica, Sucker Punch [?] ). They aren't spending money anymore. There shouldn't be any waste. And even their lowest selling games should turn profits.

I went on a tangent. Gaming is not to to reVitalize the company all on it's own. But, it will start turning a profit. And it should be a very healthy one at that. If anything, they need to cut TV's and Vaio's. And they need to double down on stuff that makes them money. Media. Sony Pictures needs to step it up hard. Make more Breaking Bads, the movies sector needs to stop randomly losing money, and then they need to make those co-operate with Playstation. Which, if the SPE CEO showing up at E3 means anything, means they are well on there way to doing so (go watch it again, they really say they're doubling down on Playstation x SPE).

I say this everywhere I go but, I think before they cut Vaio and TV, they integrate VTV components into them and see what happens. If they can get 20-30 million of those a year into houses and put their services through them, that'll do good. They just need to launch it the right way.

TL;DR : Sony needs to be Apple. I've always likened them to a disjointed Apple. All they need to do is build a super compelling ecosystem. One that would be absolutely stupid to buy out of. It starts with the PS4.

Why should/would Sony cut off their TV sector? They make some of the best sets money can buy interestingly enough at a damn good price these days. I haven't had the opportunity to buy my next hdtv yet so none of that talk!

 

[Primedoughnut]

Kaz making Game a pillar is a pretty clear admission that he plans to dramatically shrink Sony.

Actually Kev, that makes a lot of sense, be like Nintendo and have a small but very profitable gaming / hardware division.. then just grow your company when you have the cash to do it...

Don't Sony also have a good R & D department too though?

 

[kartu]

I was under the impression that Sony made good TV's. What reputation damage did they sustain?

Well, Sony margins and lack of support for anything "not industry standards" that competitors have no problem supporting. (like MKV) and that for mostly OK, not superior, quality TV.

 

[davepoobond]

Actually Kev, that makes a lot of sense, be like Nintendo and have a small but very profitable gaming / hardware division.. then just grow your company when you have the cash to do it...

Don't Sony also have a good R & D department too though?

they're only going to be cutting off parts of the company that can't sustain themselves. Sony doesn't seem like they are willing to compete with low budget TV sets, so they are trying to consolidate their offerings and offer a "low end" and a "high end" set, but the "low end" set is priced more like a mid-tier TV.

most people don't buy anything other than the shittiest TV they can get by with paying as low amount of money as they can. then they stretch and zoom the shit out of SD video and don't even hook up HD signal and convince themselves it looks a lot better than their older TV. so that doesn't bode well for a turn around for Sony at all.


that's their main bleeder at the moment, with another department sucking it up as well.

Sony's main focus i think is going to be gaming, cameras/imagery (medical stuff), and mobile, with the other things sort of whimpering along as they are reduced to nothing and then cut off completely, unless they somehow begin to turn a profit. Sony Pictures isn't going anywhere, though.

 

[Vigilant Walrus]

Ok so this is a topic I'm curious about but I don't really know how to find exactly what I'm looking for, so I'm hoping some people who know what's up on GAF can help me out. I know there are rumors right now of MS getting rid of or selling Xbox because it doesn't make enough money. Are games more critical to Sony from a business perspective? I'm curious as to how important the PS4/video games in general are to Sony. I know the company as a whole has struggled in recent years, but I've heard they're on the rise with Kaz as CEO and I'm curious as to how a successful PS4 will contribute to it?

I'd like to know what's going on so I can feel more confident in the future of the PS4 since that will likely be my only console as of now. I have low confidence in anything Xbox related right now so I need some positive news from the Sony side.

When I look at their Sony Vaio lineup, I think they could do better. Their engineers are really great, but all I see in stores are the crappy plastic notebooks for 400-500 dollars. it reduces the value of Sony as a quality brand to have these low comodity products. I have a Vaio S Premium. The machine is wonderful and powerful. it's ultrabook thin but with a dedicated graphics. The temperatures are very low even when gaming insane. AND it has a dvd drive. in a 13 inch ultrabook. that's like times the amount of stuff you would put in a comparable Mac.

 

[ArkkAngel007]

Maybe it will help them conduct business in the future and realize how to target and provide for their consumers. If it doesn't, then no.

Edit: To clarify, while PS4 will be quite a success for Sony, they have many other departments that are suffering and are going to continue to drag the company down. Unless they can figure out what Samsung and Asus are doing right, they aren't going to get as far as they want to.

 

[RanoNL]

Microsoft only future.

Spoiler

Believe.

Microsoft will go down just as fast as Sony will. I'm not surprised if both company's do not exist anymore in 5~10 years from now. Or maybe they will but they became irrelevant like Nokia and Blackberry.

 

[coolasj19]

I don't think I've ever told you, but I really like your posts (titles and all!). We have very similar perspectives it seems.

Spoiler

Full disclosure to this post. I'm typing sleepy. This post isn't going to flow well and might possibly make no sense at all.

Thank You !! =D. But, I must be doing something right/wrong then... I think I'm a raving lunatic. Good to know I'm not insane alone.

Gamers have metric

Spoiler

or imperial

shittons of money or at least, we spend lots of it on games. And we buy lots and lots and lots of product, it's wise to invest in us. Take me for example, for the past generation I've been a high school ---> college student and I've had a minimum wage job for a few months. But, I've still spent thousands on games. PS3 : Probably somewhere around 40 retail games almost all of them new and at $60 = ~$2400 + 2 PS3 $1k = ~$3500 without digital sales. I've spent at least $800 on my Vita despite being severely money constrained at nearly all times since owning it.

Sony needed to make the gamers they have buy their movies. And buy their phones. And their tablets. Sadly, that day is long gone. They had that chance with the PS3 and when phones and tablets were getting popular. Honestly, I think what Sony is going to end up doing when they say stuff like this,

...we will start streaming PlayStation gaming experiences to PlayStation devices, but also to non-PlayStation devices, like smartphones, tablets, laptop computers, televisions, and Blu-ray players.

Is that they are going to expand the market. I think we are all underestimating what Sony is trying to accomplish. Remember, they bought Gaikai in July 2012, when they were on there way down to their lowest stock prices at $10 a share. For $380 Million Dollars. That's not just some random purchase. And I'm thinking this was one of Kaz's first decisions.

Spoiler

With help from Agent Harrison of course. Who served on theBoard of Gaikai for 2 years until March 2012.

. Seeing as how he took over in January 2012. You know how the Wii got everyone playing games for 2 weeks at a time before it sat collecting dust? Sony is gonna 1-Up them better. I believe Sony is going to go after those billions of internet connected devices. And if they can turn them too into gamers ( Read : big ol' piggy banks ) they will reap the rewards first. Screw the Blue Ocean Strategy, this is the Cerny Ocean Strategy. And don't forget Shuhei Yoshida-sans Master Plan.

TL;DR : Kaz is a smart dude. Especially in regards to gaming. Playstation isn't a Pillar Of Sony because he thinks it's cool and love us gamers. It's because everyone could be a gamer.


Yo guys. I should have invested in Sony in January. It was $10 back then. Who wants to start a pool? I can toss in like $30 !!

How I weave my arguments : Take a hopelessly idealistic stance. Talk about things that could happen based on conjecture and my crystal ball. My ass is covered for another 4-5 years.

 

[NemesisPrime]

I don't think it will... the money being made in the console business doesn't seem to be big enough for a company the size of Sony. MS and Sony are in the console business more for denying competitors a vital market instead.

 

[UltraGunner]

Madatory PS+ for online games will surely bring in a pretty penny.

 

[davepoobond]

i think what will ACTUALLY revitalize Sony as a whole is not the PS4 itself as a product, but the people running the business at the moment.

if they proliferate the "new" kind of management we're seeing from the gaming department, which I'd arguably say is their greatest strength at all of Sony at the moment, into other departments it could put them in a better place for sure. if they are promoted from the gaming division into the other parts, it may help reduce in-fighting between departments.

 

[coolasj19]

T___T Sadly, one of the unnecessary department who keep losing money here for Sony here is gaming department.

No. The unnecessary department who kept losing money was selling the PS3 hardware. Which is why I'm absolutely convinced Sony is going to smother it to death as soon as possible (When the PS4 is profitable). Unless it's selling at a $50 profit and I don't know about it. Also, the Vita makes Sony money. And they aren't dropping the price for another 2 years. The last pricedrop did very little. So why should they? They have the VTV for a low priced Vita.

Why should/would Sony cut off their TV sector? They make some of the best sets money can buy interestingly enough at a damn good price these days. I haven't had the opportunity to buy my next hdtv yet so none of that talk!

"We can't continue selling TV sets [the way we have been]. Every TV set we all make loses money."

That's it. That's all the information you need. You see this TV set? Buy it now. Before it's too late. And yes, Sony makes baller TV's. And the price is most likely a loss for them. They need to cut it for profit, or make it profitable. I'm getting a couple of my own when I get a good enough job.

Microsoft will go down just as fast as Sony will. I'm not surprised if both company's do not exist anymore in 5~10 years from now. Or maybe they will but they became irrelevant like Nokia and Blackberry.

=) I can't find a good gif for this. So here's this I guess.

When I look at their Sony Vaio lineup, I think they could do better. Their engineers are really great, but all I see in stores are the crappy plastic notebooks for 400-500 dollars. it reduces the value of Sony as a quality brand to have these low comodity products. I have a Vaio S Premium. The machine is wonderful and powerful. it's ultrabook thin but with a dedicated graphics. The temperatures are very low even when gaming insane. AND it has a dvd drive. in a 13 inch ultrabook. that's like times the amount of stuff you would put in a comparable Mac.

I have a Vaio F Series. This sexy beast looks like the big brother to the PS4. Probably designed by the same guy. And it's goddamn gorgeous. Unfortunately, all that build quality you get from ordering the best ones come at performance and insane prices costs. And I've never heard any positive or negatives about the Vaio line. Needless to say though, they probably don't make bajillions of dollars.

EDIT : I forgot about IPTV. Yeah. That's another big thing. Sony, paving the way forward before you knew you needed one. Gaikai, PS+, and IPTV. OoooOOoOoOooooo boy. I'm serious about that pot for stock shares -_-

 

[CouchMaster]

It should help yes, but I think it's coming from other devices as well. Their new lineup of Bravias are a far cry from previous gen, their DSLRs are doing better thanks to new SLT tech, the RX100 is basically the best pocket camera in sub-600$ category, and their Xperia phones are just phenomenal. Even if their financial situation isn't as good as it was a decade ago, I like the way that they're slowly moving back to that "Sony equals quality" branding.

 

[zomgbbqftw]

Strategy-wsie I think you're right, but it'd be tough to be the guy who killed off Sony TVs. Do you have any idea how many jobs that is? (Not being rhetorical, I'm actually asking. I have no idea.)

I would estimate around 23-25k job losses in Japan for TVs and a further 3k for laptops if they exit completely. If they take the Apple "production-lite" model then around 20k job losses in TVs and around 2k in laptops. That's just Japan though. Sony actually employ around 20k people for manufacturing/assembly in the rest of Asia most of whom would lose their jobs if they outsourced it to third parties or ended it. All in all Sony would shed around 40-50k jobs if they left TVs and laptops, if they went production-lite then I would say 35-45k jobs lost from the group with over half coming from Japan.

If I was in Nomura's position (Sony's primary consultant afaik) I would be recommending the production-lite plan to be executed from the next FY for laptops and TVs. The only successful Sony electronics ventures (Game and Mobile) are production-lite and between them employ around 15k people globally but account for an increasing proportion of the group's revenues. The model exists internally within the group, now they need to extend it to TVs and laptops to ensure their future survival.

 

[Jinko]

I had no idea there were so many business geniuses on NeoGAF giving out free advice on exactly what Sony need to do!

This is GAF everyone knows something about everything here.

 

[jhmtehgamr20xx]

I've seen a lot of posts in this thread calling for Vaio getting axed,...can I ask why? I think it's the one brand Sony has that's closest to an Apple kind of chic appeal, aside from Xperia maybe. Just thought it'd be wiser to attach it to a tablet and cut the desktop/laptop lines, but not the Vaio brand itself.

I can easily agree w/ selling off the TV business tho; it's not like it was back in the early HD or SD era where the difference between an economy and high-end model was like night and day. The tech's improved so where budget models offer around similar or comparatively close quality to the high-end. I'm not even sure most consumers make use of many of the optional features the televisions come packed with.

These two companies are basically worth the same (Sony's market cap is $17 billion and Nintendo $15,5 billion) although the other one tries to offer everything and the other concentrates on one business.

For comparison, Microsoft as a company is worth $313 billion dollars. Also, just for comparison Samsung who is competing in many of the same product categories as Sony is considered worth $190 billion dollars.

17< 313, okay that's a MASSIVE difference I admit, but it makes what's going on w/ XBO that much sadder. A company that size could've afforded Titan levels of power and investments in plenty of 1st party core-centric studios, so it's only showing how stingy they are.

 

[Gorillaz]

Naw and they mentioned it on the bonus round but Sony as a whole is stuck in the past with there type of thinking. As of right now the company lack synergy imo

It will jump start a spark tho...maybe the one they need

 

[apana]

they're only going to be cutting off parts of the company that can't sustain themselves. Sony doesn't seem like they are willing to compete with low budget TV sets, so they are trying to consolidate their offerings and offer a "low end" and a "high end" set, but the "low end" set is priced more like a mid-tier TV.

most people don't buy anything other than the shittiest TV they can get by with paying as low amount of money as they can. then they stretch and zoom the shit out of SD video and don't even hook up HD signal and convince themselves it looks a lot better than their older TV. so that doesn't bode well for a turn around for Sony at all.


that's their main bleeder at the moment, with another department sucking it up as well.

Sony's main focus i think is going to be gaming, cameras/imagery (medical stuff), and mobile, with the other things sort of whimpering along as they are reduced to nothing and then cut off completely, unless they somehow begin to turn a profit. Sony Pictures isn't going anywhere, though.

As far as the televisions go it's not just the average consumer that is hurting them. Even people here who research televisions and are willing to spend more money often opt for Samsung or Panasonic.

 

[jcm]

I would estimate around 23-25k job losses in Japan for TVs and a further 3k for laptops if they exit completely. If they take the Apple "production-lite" model then around 20k job losses in TVs and around 2k in laptops. That's just Japan though. Sony actually employ around 20k people for manufacturing/assembly in the rest of Asia most of whom would lose their jobs if they outsourced it to third parties or ended it. All in all Sony would shed around 40-50k jobs if they left TVs and laptops, if they went production-lite then I would say 35-45k jobs lost from the group with over half coming from Japan.

If I was in Nomura's position (Sony's primary consultant afaik) I would be recommending the production-lite plan to be executed from the next FY for laptops and TVs. The only successful Sony electronics ventures (Game and Mobile) are production-lite and between them employ around 15k people globally but account for an increasing proportion of the group's revenues. The model exists internally within the group, now they need to extend it to TVs and laptops to ensure their future survival.

Thanks, this is very informative. I can see why Hirai is hesitant to pull the trigger. That's a lot of jobs, in addition to the loss of prestige or whatever.

 

[SPDIF]

Microsoft will go down just as fast as Sony will. I'm not surprised if both company's do not exist anymore in 5~10 years from now. Or maybe they will but they became irrelevant like Nokia and Blackberry.

No. Even if Microsoft's worst nightmare comes true and consumer sales of Windows completely evaporate (which isn't going to happen, even within 5-10 years), they'll still be making billions from elsewhere.

 

[BadWolf]

There is definitely a chance but obviously can't say for sure.

Things are looking very good for the PS4 thus far though.

 

[Off-Kilter]

No, the company is too big and too disjointed to have the success of the PS4, however large it may be, dramatically improve the other divisions.

 

[tehrik-e-insaaf]

Market cap is a terrible tool to compare them. SNE has an EV of 27.83B, NTDOY is 4.80B.

Why are you using EV? EV is equity+debt-cash ---> SNE has 17+ billion in debt and 6.5 billion in cash... NTDOY has no debt and has far more cash... NTDOY also has zero exposure to complex derivatives which can blow up SNE... Unless your point is to say that SNE is far more "complex" as a company and are using EV to explain it... But even that doesn't tell the whole story since Sony is sitting on lots of dead assets that no one wants to take off their hands

NTDOY is basically trading very close to cash - they have limited good will beyond that

Investors think Sony might have some possibility of a turn-around so they are giving it a pretty healthy P/E... they are getting 21x forward earnings - which is insane since last year's earnings were basically made up by selling two major headquarter buildings via a temporary entry into the real estate business...

Me? I wouldn't touch SNE period... Company is in huge trouble and Playstation isn't going to save them... Even if PS+ goes gangbusters.... the company is going to be straddled with huge debts as they sell off and write down the other failed parts of their company... a few hundred million or a billion a year from Playstation isn't gonna make up the $17 billion they owe anytime soon... They really need the Xperia or healthcare or finance/insurance or some other group to start generating 3-4 billion a year so they can refinance their debts and pay them off (or maintain some long-term debt at a predictable and serviceable level) to become a healthy organization again...

Playstation won't take down Sony, but their internal structural problems (debt) might force them to eventually spin off Playstation if they want to try and save the brand after this generation

 

[jcm]

Why are you using EV? EV is equity+debt-cash ---> SNE has 17+ billion in debt and 6.5 billion in cash... NTDOY has no debt and has far more cash... NTDOY also has zero exposure to complex derivatives which can blow up SNE... Unless your point is to say that SNE is far more "complex" as a company and are using EV to explain it... But even that doesn't tell the whole story since Sony is sitting on lots of dead assets that no one wants to take off their hands

NTDOY is basically trading very close to cash - they have limited good will beyond that

Investors think Sony might have some possibility of a turn-around so they are giving it a pretty healthy P/E... they are getting 21x forward earnings - which is insane since last year's earnings were basically made up by selling two major headquarter buildings via a temporary entry into the real estate business...

Me? I wouldn't touch SNE period... Company is in huge trouble and Playstation isn't going to save them... Even if PS+ goes gangbusters.... the company is going to be straddled with huge debts as they sell off and write down the other failed parts of their company... a few hundred million or a billion a year from Playstation isn't gonna make up the $17 billion they owe anytime soon... They really need the Xperia or healthcare or finance/insurance or some other group to start generating 3-4 billion a year so they can refinance their debts and pay them off (or maintain some long-term debt at a predictable and serviceable level) to become a healthy organization again...

Playstation won't take down Sony, but their internal structural problems (debt) might force them to eventually spin off Playstation if they want to try and save the brand after this generation

I brought up EV to show that having similar market caps doesn't necessarily mean that "these two companies are basically worth the same", which you seem to understand perfectly well.

 

[coolasj19]

Why are you using EV? EV is equity+debt-cash ---> SNE has 17+ billion in debt and 6.5 billion in cash... NTDOY has no debt and has far more cash... NTDOY also has zero exposure to complex derivatives which can blow up SNE... Unless your point is to say that SNE is far more "complex" as a company and are using EV to explain it... But even that doesn't tell the whole story since Sony is sitting on lots of dead assets that no one wants to take off their hands

NTDOY is basically trading very close to cash - they have limited good will beyond that

Investors think Sony might have some possibility of a turn-around so they are giving it a pretty healthy P/E... they are getting 21x forward earnings - which is insane since last year's earnings were basically made up by selling two major headquarter buildings via a temporary entry into the real estate business...

Me? I wouldn't touch SNE period... Company is in huge trouble and Playstation isn't going to save them... Even if PS+ goes gangbusters.... the company is going to be straddled with huge debts as they sell off and write down the other failed parts of their company... a few hundred million or a billion a year from Playstation isn't gonna make up the $17 billion they owe anytime soon... They really need the Xperia or healthcare or finance/insurance or some other group to start generating 3-4 billion a year so they can refinance their debts and pay them off (or maintain some long-term debt at a predictable and serviceable level) to become a healthy organization again...

Playstation won't take down Sony, but their internal structural problems (debt) might force them to eventually spin off Playstation if they want to try and save the brand after this generation

Hey look !! It's the post I've always wanted but didn't have the words to say it. Though, potentially dumb question. How big of a deal is debt? I feel like everyone is just riddled in it. Who's the debt owed to anyway? When will they want it back?

I can't say that Playstation will save Sony. But I do think it could save Sony. All of the ingredients are there for pulling off a Blue Ocean Strategy like Nintendo did. Hell, just look at the cash potential. $50 for PS+ a year. Lock Gaikai behind it for $10 a month or something. And that's just the subscriptions. Playstation is a healthy market. It's going to make money. How much money, is the question. Does Gaikai take off? Or is it just this niche thing? No other part of Sony has such potential to generate an exorbitant amount of cash so quickly as Playstation. Maybe Xperia does, but you get 1 shot a year at that and it's goddamn random what people decide they like. SPE could launch the next Avatar or something, but once again, it's goddamn random what people decide they like.

It starts with Playstation. Maybe it can support all

Spoiler

Ignore my hyperbole, it just sounds good, okay?

of Sony.

 

[enra]

Well, Sony margins and lack of support for anything "not industry standards" that competitors have no problem supporting. (like MKV) and that for mostly OK, not superior, quality TV.

Stop lying to yourself; mkv files are only used for piracy and because sony produces movies they will never support that fileformat.

 

[pizza dog]

The fuck do I know about running an insurance company. What do you?

 

[Fezan]

As a whole not but if Ps4 is a huge success it will help establish image of the company like what ipods and macbooks did for apple.
Beside that Sony is also making great products again .

-They are among the best tv makers now even tough they use lg panels they have most lag free gaming tvs. also their top end are best led tvs you can buy right now and price is competitive to Samsung. anybody saying otherwise hasn't seen a sony tv in last year. their mid range are also competitively priced and low end tvs are not only better than sony but also cheaper .

- Xperia lineup is doing great now. they are among the best smartphones. just look at tablet z thinnest and lightest tablet around. i think now only problem is their brand awareness and non presence is US. Sony themselves some time underestimate sales like tablet z was out of stock for weeks.

-Vaios are best laptops around. thin light with excellent screens. Also the prices are good.

-Sony music = no idea
-sony movies= they had 2 bombs this year hopefully next will be better
-Sony financials= the most money maker

 

[Melchiah]

Aren't they all selling terribly? I'm pretty sure the new Xperia is selling worse than a Windows Phone.

The last time I heard they were 3rd in global sales, above Windows/Nokia, but there's a long way from 3rd to 2nd.

 

[spwolf]

As a whole not but if Ps4 is a huge success it will help establish image of the company like what ipods and macbooks did for apple.
Beside that Sony is also making great products again .

-They are among the best tv makers now even tough they use lg panels they have most lag free gaming tvs. also their top end are best led tvs you can buy right now and price is competitive to Samsung. anybody saying otherwise hasn't seen a sony tv in last year. their mid range are also competitively priced and low end tvs are not only better than sony but also cheaper .

- Xperia lineup is doing great now. they are among the best smartphones. just look at tablet z thinnest and lightest tablet around. i think now only problem is their brand awareness and non presence is US. Sony themselves some time underestimate sales like tablet z was out of stock for weeks.

-Vaios are best laptops around. thin light with excellent screens. Also the prices are good.

-Sony music = no idea
-sony movies= they had 2 bombs this year hopefully next will be better
-Sony financials= the most money maker

They are #1 in music.

Sony has great products today, as you listed above, together with Camera's... for past 5-6 years they had a lot of nothing special products though, so there is a question if they will be able to turn around just based on the strength of better (and not brand new) products.

Their phones and Playstation (including PS+ and Gaikai) are definitely their next year growth drivers.

 

[Fezan]

They are #1 in music.

Sony has great products today, as you listed above, together with Camera's... for past 5-6 years they had a lot of nothing special products though, so there is a question if they will be able to turn around just based on the strength of better (and not brand new) products.

Their phones and Playstation (including PS+ and Gaikai) are definitely their next year growth drivers.

i dont know how much profit they make. and cameras sales are decreasing, it will be irrelevant in 2,3 years

 

[jhmtehgamr20xx]

I would estimate around 23-25k job losses in Japan for TVs and a further 3k for laptops if they exit completely. If they take the Apple "production-lite" model then around 20k job losses in TVs and around 2k in laptops. That's just Japan though. Sony actually employ around 20k people for manufacturing/assembly in the rest of Asia most of whom would lose their jobs if they outsourced it to third parties or ended it. All in all Sony would shed around 40-50k jobs if they left TVs and laptops, if they went production-lite then I would say 35-45k jobs lost from the group with over half coming from Japan.

If I was in Nomura's position (Sony's primary consultant afaik) I would be recommending the production-lite plan to be executed from the next FY for laptops and TVs. The only successful Sony electronics ventures (Game and Mobile) are production-lite and between them employ around 15k people globally but account for an increasing proportion of the group's revenues. The model exists internally within the group, now they need to extend it to TVs and laptops to ensure their future survival.

Why can't they just shift most of those people over to a different, semi-relevant department like smartphones, tablets, or even PS manufacturing? Any restructuring's going to result in some people getting fired, but if Sony's that concerned about their employee community it'd be something worth considering.

There's a point where Sony has to consider what's best for the company and put their foot down. If they can keep most of those employees that's great, but if they keep all of them and those sectors keep being toxic, it could sink the entire company. Is it worth Sony going down for a few thousand extra jobs?

 

[darkistheway]

I can't say that Playstation will save Sony. But I do think it could save Sony. All of the ingredients are there for pulling off a Blue Ocean Strategy like Nintendo did. Hell, just look at the cash potential. $50 for PS+ a year. Lock Gaikai behind it for $10 a month or something. And that's just the subscriptions. Playstation is a healthy market. It's going to make money. How much money, is the question. Does Gaikai take off? Or is it just this niche thing? No other part of Sony has such potential to generate an exorbitant amount of cash so quickly as Playstation. Maybe Xperia does, but you get 1 shot a year at that and it's goddamn random what people decide they like. SPE could launch the next Avatar or something, but once again, it's goddamn random what people decide they like.

It starts with Playstation. Maybe it can support all

Spoiler

Ignore my hyperbole, it just sounds good, okay?

of Sony.

There is absolutely nothing Blue Ocean about Sony. Everything they do is in highly competitive markets - TV, movies, games, mobile. All they can hope for is increasing revenues from those markets.

 

[dcx4610]

Unlike Microsoft, Sony has their company named branded all over the PlayStation.

If the PS4 is a big success, it's a good first step in re-establishing "Sony" as a big brand that puts out good products.

Sony let their success get to their heads in the 80s and 90s. They were certainly innovative but their prices were more times than not double the price of the competition. It was a quality product but was it worth double the price?

Samsung has claimed Sony's spot in the 00s and it looks like they are repeating the same mistake as their prices are starting to look similar.

Sony just needs the PS4 to be profitable and to market their failing divisions better while being competitive. The TV market isn't dead, they just need to rework their strategy.

 

[zomgbbqftw]

Why can't they just shift most of those people over to a different, semi-relevant department like smartphones, tablets, or even PS manufacturing? Any restructuring's going to result in some people getting fired, but if Sony's that concerned about their employee community it'd be something worth considering.

There's a point where Sony has to consider what's best for the company and put their foot down. If they can keep most of those employees that's great, but if they keep all of them and those sectors keep being toxic, it could sink the entire company. Is it worth Sony going down for a few thousand extra jobs?

Smartphones, tablets and PlayStations already use the production-lite model. Sony specifically fired all of the Sony Ericsson manufacturing and assembly staff back in 2007-2009 in preparation for smartphones having seen how Apple shook up the market. PS3 moved to production lite after the phat was discontinued. The PS3 phat was the last PlayStation to be made by Sony Electronics, since then they are built at third parties and the components are mostly sourced from third parties (especially true for the Vita and PS4 which use off the shelf parts).

Sony's two most successful electronics divisions use the production lite model, to see any success in TVs and laptops they will probably have to do the same. I think Kaz could announce such a move by around this time next year. The investor pressure to get TVs either out of the picture or reliably profitable will be too great to just continue down the current path and hope for the best.

 

[coolasj19]

There is absolutely nothing Blue Ocean about Sony. Everything they do is in highly competitive markets - TV, movies, games, mobile. All they can hope for is increasing revenues from those markets.

This is what I think you just said
"Nu-uh"
That's your 3 sentences in one word. I'll respond to you, and see if you respond with something more extensive.

Since when are movies "highly competitive"? I've never heard of anyone saying that because they went to go see movie A, they didn't see movie B. The same thing applies to television. It's very black and white when it comes to both of those. Your production either made money, broke even, or lost money.

When it comes to games, yes, it is a highly competitive market. It's pretty cut throat. The casual gamer has their iPad, the mobile gamer has a 3DS, the console gamer has a PS4 or XB1, and the PC gamer has their PC. What's going to happen, is Sony is going to try and make, the cloud gamer. And when it comes to cloud gaming, your install base is literally every single device with an internet connection. That's billions, by the way.

Here are two of the principles of the Blue Ocean Strategy.
1. Create uncontested market space by reconstructing market boundaries.
2. Focusing on the big picture.

Nintendo did that with the Wii by focusing on the casuals. And, people that never played video games before that. And then Nintendo failed to capitalize on that momentum but that's beside the point.

But anyway, so what your telling me, that if Sony were to bring cloud gaming to those billions of internet connected devices, it wouldn't fit the above principles? I'd say it's reconstructing market boundaries. Guess what? The people with iPads, don't have anywhere to drop $60 on a big budget extensive game. Or subscribe to a gaming service. If they can grab those people, and get them to pay money for better gaming, Sony gets to that market first, and they keep a stranglehold on it, the everyone else, just starts playing catchup, just like with the Wii.

Also, IPTV. Cable cutters are a big deal. Mark my words.