Support NeoGAF

[tzare]

I'm pretty sure the 360 dominates the PS3 in the UK as well. And if you've heard that is a pretty big market.

yup, UK is probably the second best market for 360 but, that's it, the rest of the world ain't at US or UK levels, maybe canada or australia. 360's awesome sales are too concentrated on certain territories, so i doubt they maintain their ratio there.
ANd yes, hw sales are usually tied to sw, but there are fluctuations, not everywhere games sell the same.

 

[patsu]

Just imagine how bad it's going to be next year with the vita losses

Andrew House says Vita h/w loss depends on Yen's strength. If Tsunami hits Japan again this year, then it may be time to relocate Sony to South America !

 

[Castef]

PS3 going to outsell 360 soon enough.

Said someone back in 2009.

 

[kensama]

Don't know if anyone said that but:

Sony bought in january Ericsson for 1 Billion $, this could explain the 2 Billion net loss no?

 

[bigtroyjon]

Don't know if anyone said that but:

Sony bought in january Ericsson for 1 Billion $, this could explain the 2 Billion net loss no?

No.

Not only would that not be a loss(they actually took a gain off of the valuation increasing the half they already own) but the earnings are as of Dec 31.

 

[cyberheater]

PS3 going to outsell 360 soon enough.

With declining sales of PS3. How exactly is that going to happen?

 

[AranhaHunter]

No.

Not only would that not be a loss(they actually took a gain off of the valuation increasing the half they already own) but the earnings are as of Dec 31.

Yeah those will go in the next Quarter as the acquisition happened in January.

 

[kensama]

No.

Not only would that not be a loss(they actually took a gain off of the valuation increasing the half they already own) but the earnings are as of Dec 31.

ok

 

[Kazerei]

PS3 going to outsell 360 soon enough.

Well, PS3 was outselling 360 in Q1 and Q2, but strong holiday sales pushed 360 ahead in Q3.

Looking at hardware/software sales the PS3 seems to be doing well. Sony is probably losing money due to other things. Vita launch is probably going to make things worse.

 

[szaromir]

How does Sony keep surviving with year after year of losses? This doesn't seem like a company that creditors would want to sink their money into at the moment.

Their losses are somewhat small compared to revenues. Imagine that you as a person made $23k of income but spent $25k in the last 3 months. You'd be able to live for a couple of years like that, especially if you consider that Sony typically lose less money per quarter. Though I imagine the situation is getting very tight in Sony HQ, especially with their stock plummeting.

 

[Camilos]

in terms of the influence on the gaming market that size of install base brings, the race was over a long time ago

This

 

[patsu]

What you don't seem to get is that MS never cared if HD-DVD or Blu-Ray won. You make it sound like MS started the push for HD-DVD. They only supported HD-DVD(A year later) to prolong the war while they kept building up their digital push. MS HD-DVD was a strategy for the bigger picture we see today.

They did care. They wanted to push their own tech for the HDM market but it all went south. The scenario they shot for was the parallel adoption of HD-DVD and BR, but the industry only want 1 standard.

NetFlix jumped in, capitalized on BR players and achieved their market share today by taking advantage of both DD and BR growth.

 

[Admiral Bone to Pick]

Hand the company over to Carlos Ghosn. Please.

 

[Marco1]

It amazes me that the PS3 has never caught up to the 360 considering how much it oversells in the East and Euro.
Personally my biggest complaint of the PS3 in the UK since launch was the price never met the performance. If you launch a console over 1 year later than the 360 then PLEASE make sure that at a pricepoint of over £400 the console launch line-up blows away the 360 version.
It was at that point I realised Sony had made some dire mistakes.

 

[frequency]

I don't know if this has been discussed in this thread or similar threads (I can't find anything), but I had a question.
I'm not a numbers person. The only thing I get out of this is that they're losing money.

It seems really rare to ever see reports about profits.

So does this mean they lost $2 billion? So they made no profit? If so, how does a company stay in business if it's just loss after loss in every report?
Or does it mean their profit is just $2 billion less than it was?

Dumb question. But I'm really curious and would like to put these numbers into perspective. Whenever I see threads like this, I just can't understand how they can stay in business with such huge number losses.

 

[Elios83]

Good luck to Hirai.
It's a difficult time for the company but I'm glad that gaming consoles, digital imaging and mobile products have been recognized by Kaz as the main pillars going forward.
Also trimming down unprofitable and redundant products is a good decision and so is making the medical sector a core business.
As for TVs they are basically going out of the LCD race, they will make partnerships and offer LCD TVs as a commodity product while focusing on new technologies like Crystal LED and OLED for the future.

 

[see5harp]

PS3 going to outsell 360 soon enough.

truth bombs

 

[patsu]

I don't know if this has been discussed in this thread or similar threads (I can't find anything), but I had a question.
I'm not a numbers person. The only thing I get out of this is that they're losing money.

It seems really rare to ever see reports about profits.

So does this mean they lost $2 billion? So they made no profit? If so, how does a company stay in business if it's just loss after loss in every report?
Or does it mean their profit is just $2 billion less than it was?

Dumb question. But I'm really curious and would like to put these numbers into perspective. Whenever I see threads like this, I just can't understand how they can stay in business with such huge number losses.

See szaromir's post above. Also, one of the recent reported losses were paper loss for accounting purposes.

 

[frequency]

See szaromir's post above. Also, one of the recent reported losses were paper loss for accounting purposes.

I don't really understand. Do people just not make threads if they post a profit?
It seems like it's always just loss. Even if it's relatively small, that's still like... running a business that just bleeds money?

I don't know what "paper loss" is. But I guess I'll google it.

Business is confusing.

Thanks.

As long as this doesn't hurt their console business, I'm happy. But I would like to understand because I get worried every time I see these threads that we'll have less choices in the game console market if someone loses too much and goes under/pulls out.

 

[spwolf]

As for TVs they are basically going out of the LCD race, they will make partnerships and offer LCD TVs as a commodity product while focusing on new technologies like Crystal LED and OLED for the future.

not at all.. they just restructured it and got out of SLCD so they dont have to incur losses because of it. But they have 3 TV divisions now - outsourced, inhouse and future gen.

And Samsung itself outsources 40% of their TV production to Taiwanese manufacturers.

 

[Elios83]

I don't really understand. Do people just not make threads if they post a profit?
It seems like it's always just loss. Even if it's relatively small, that's still like... running a business that just bleeds money?

Business is confusing.

Well... as long as this doesn't hurt their console business, I'm happy. But I would like to understand because I get worried every time I see these threads that we'll have less choices in the game console market if someone loses too much and goes under/pulls out.

It's a mega company. When you have (just an example) 50 billion dollars in your pocket and you lose 2 billion dollars every year you can surive many many years of consecutive losses.
It's not a small company which has little to no cash reserves so if they don't make profits they go bakrupcy in a year or two.
Also if Sony was in real danger Japan's governament would jump in to save it by injecting cash so yeah, huge companies like Sony, Microsoft and so can't go down really easily

 

[Psychotext]

I don't really understand. Do people just not make threads if they post a profit?

There's a thread every quarter. You've just not been paying attention.

It's not all been losses, but the last few years have been pretty bad. They've still got a ton of assets they could sell before the shit hits the fan though.

 

[bigtroyjon]

I don't really understand. Do people just not make threads if they post a profit?
It seems like it's always just loss. Even if it's relatively small, that's still like... running a business that just bleeds money?

I don't know what "paper loss" is. But I guess I'll google it.

Business is confusing.

Thanks.

As long as this doesn't hurt their console business, I'm happy. But I would like to understand because I get worried every time I see these threads that we'll have less choices in the game console market if someone loses too much and goes under/pulls out.

These threads get made every quarter. This will be the fourth consecutive year of Sony losing money, all of these companies have lots of cash in reserve and can also borrow money if need be. Sony has burned through a combination of cash and assets over the 4 year period.

The Microsoft thread got bumped to the first page so go take a look at that one if you want to see a company that's making money

 

[frequency]

It's a mega company. When you have (just an example) 50 billion dollars in your pocket and you lose 2 billion dollars every year you can surive many many years of consecutive losses.
It's not a small company which has little to no cash reserves so if they don't make profits they go bakrupcy in a year or two.
Also if Sony was in real danger Japan's governament would jump in to save it by injecting cash so yeah, huge companies like Sony, Microsoft and so can't go down really easily

That's reassuring.

There's a thread every quarter. You've just not been paying attention.

It's not all been losses, but the last few years have been pretty bad. They've still got a ton of assets they could sell before the shit hits the fan though.

I guess I haven't. I'm not a numbers person so most of these go over my head or I forget about it soon after. I remember this feeling of confusion though.


I think it doesn't help that a lot of people in these threads speak of losses like the end is right around the corner.

 

[Elios83]

not at all.. they just restructured it and got out of SLCD so they dont have to incur losses because of it. But they have 3 TV divisions now - outsourced, inhouse and future gen.

And Samsung itself outsources 40% of their TV production to Taiwanese manufacturers.

I was not saying that they're going out of the LCD TVs business but they're going out of the competitive race in that business.
Kaz said it clearly, LCD TVs are for them a commodity products are this point, which means that you can choose a TV from whatever manufacturer you want and it's basically equivalent.
They are not going to lose money or invest for market share in that business.
They will make partnerships and outsource production to offer LCD TVs as part of their lineup but they're not focusing on them anymore, for the future they're developing Crystal LED and OLED products.

 

[AZ2002]

not bad i thought it will be worse.and with one off cost like buying their self out of the LCD venture with Samsung for 800$ million dollar and one off situations like the earthquake and the PSN hack.i think they well start to turn things around.i see they already started to correct the TV division situation as its the one dragging the company down with a 3$ billion dollar loss this year.and they said they will be making profits from it starting the next fiscal year.good luck to Kaz Hirai and here is quote from Sony new CEO


Hirai, a 51-year old Sony veteran known for reviving the PlayStation gaming operations through aggressive cost-cutting, said he would not hesitate to scale back or withdraw from businesses if they were not competitive.


"I have a very strong sense of crisis about the environment surrounding us," Hirai told a news conference. "We cannot be afraid to make painful choices for the future of Sony. Our rivals and the operating environment won't wait for us."



http://www.reuters.com/article/2012/02/02/us-sony-results-idUSTRE8110E020120202

 

[Ken Masters]

Andrew House says Vita h/w loss depends on Yen's strength. If Tsunami hits Japan again this year, then it may be time to relocate Sony to South America !

Even before the tsunami the yen was going down the shitter

 

[Digishine]

Sorry for asking but how the hell can a company who loses 2 Billion still manage to operate ?

 

[Psychotext]

Sorry for asking but how the hell can a company who loses 2 Billion still manage to operate ?

It's been answered. Read the thread.

 

[spwolf]

Yes and no. Those external factors are not Sony's inherent problems. If they go away, Sony will face tougher competition from fellow Japanese companies. If currencies and disaesters remain a problem, the management and execution still need to carry Sony out of the red.

Pointing finger at those issues won't change the issues on hand.

fact still stays that without yen and tsunami and floods, they would have probably made 3-5 billion in profits overall for 2011.

only someone as strong fiscally as apple and with as many hit products as apple would have survived Japanese 2011 without losses.

 

[JoshuaJSlone]

Now above NES in both hardware and software.

 

[spwolf]

I was not saying that they're going out of the LCD TVs business but they're going out of the competitive race in that business.
Kaz said it clearly, LCD TVs are for them a commodity products are this point, which means that you can choose a TV from whatever manufacturer you want and it's basically equivalent.
They are not going to lose money or invest for market share in that business.
They will make partnerships and outsource production to offer LCD TVs as part of their lineup but they're not focusing on them anymore, for the future they're developing Crystal LED and OLED products.

as i said, thats not really true... what they did was formed 3 division of Sony TV.
1. Outsourced production for cheap TVs (complete solution)
2. Sony TVs (Sony technology)
3. Future products.

And complete TV division is now run by same guy that revitalized their camera business. These changes were made 2-3 months ago. It is not like they didnt outsource it before, they just reogranized it into different division so to make each divisions work simpler. They are basically making it Apple's approach where Sony does not own the factories but procures parts from whoever offers the best rate.

Pretty much what Apple does. So no more TV factories, but focusing on delivering Sony content on these TVs and Sony technology in certain areas. Probably still more focused on hardware than Apple for instance as while they wont make their own LCD's anymore, they still have their processing technology inside.

 

[REMEMBER CITADEL]

I think it doesn't help that a lot of people in these threads speak of losses like the end is right around the corner.

Remember "Sony is doomed" and "PS3 has no games" from the start of the generation or the "Xbox has no exclusives" talk we've been hearing recently? This is the internet, people like to overact.

The situation is rather grim, however, but not hopeless.

 

[Elios83]

as i said, thats not really true... what they did was formed 3 division of Sony TV.
1. Outsourced production for cheap TVs (complete solution)
2. Sony TVs (Sony technology)
3. Future products.

And complete TV division is now run by same guy that revitalized their camera business. These changes were made 2-3 months ago. It is not like they didnt outsource it before, they just reogranized it into different division so to make each divisions work simpler. They are basically making it Apple's approach where Sony does not own the factories but procures parts from whoever offers the best rate.

Pretty much what Apple does. So no more TV factories, but focusing on delivering Sony content on these TVs and Sony technology in certain areas. Probably still more focused on hardware than Apple for instance as while they wont make their own LCD's anymore, they still have their processing technology inside.

That doesn't change the substance, LCD TVs will be offered as a commodity product. They will make parterships (read, rebranding chinese and taiwanese TVs), they will outsource productions of a few models designed in Japan but they're not going to spend money to win market share in the LCD business. They just want to offer LCD TVs as part of their TVs lineup but they want to differatiate from the competition with other technologies like Crystal LED and OLED.

 

[NemesisPrime]

With declining sales of PS3. How exactly is that going to happen?

Magic!

 

[Elios83]

I think it doesn't help that a lot of people in these threads speak of losses like the end is right around the corner.

There is a lot of confusion and people who know Sony for their consoles also tend to relate losses to the gaming business and think that this will have a huge impact on future consoles while on the contrary the gaming business will be more important than TVs for Sony going forward.

 

[xHAASx]

Good luck Kaz.

 

[NIGHT-]

PS3 going to outsell 360 soon enough.

I love this quote!! Been hearing it since 2007 on GAF

 

[xHAASx]

I love this quote!! Been hearing it since 2007 on GAF

Yes, it is getting mortifying.

 

[spwolf]

That doesn't change the substance, LCD TVs will be offered as a commodity product. They will make parterships (read, rebranding chinese and taiwanese TVs), they will outsource productions of a few models designed in Japan but they're not going to spend money to win market share in the LCD business. They just want to offer LCD TVs as part of their TVs lineup but they want to differatiate from the competition with other technologies like Crystal LED and OLED.

i guess if you think thats all Apple does (rebrands chinese and taiwanese phones), then ok . Because new strategy is a lot like what Apple does with their manufacturing.

There is no such thing as rebranding chinese TVs, and it is not different from what Sony and Samsung do today - they let their Taiwainese partners build complete TV sets based on their specs, but they still look like Sony tvs.... As I said, 40% of Samungs are made like that.

 

[StevieP]

I'm thinking the poster was talking about ms, since all rumors point to modest tech pushing kinect 2.

What will the fanboys do when all three next gen systems are similar ???

503 error.

PS3 going to outsell 360 soon enough.

Never change, JWong.

 

[Parmenides]

Sony Discusses F3Q11 Results (Seeking Alpha)

CPS Segment

Operating loss was ¥85.7 billion compared to operating income of ¥63.5 billion in last year.

Game Business

Now Game business, sales and operating income decreased year-on-year for the Game business. Although we achieved sales that were basically to our expectation for PlayStation retail which went on sale last year, Game business sales decreased due to the strategic price reduction of the PS3 hardware and decrease in unit sales of PS3 hardware.

Despite an increase in market expenses for network services and impact of the price change of PS3 hardware, we maintain consistent profitability. PS3 hardware unit sales were ¥6.5 million, tying the March 2010 fiscal year for the highest Q3 sales.

TV Business

Sales in the TV business decreased 42% to ¥237 billion. This was due to a shifting of this unit sales expansion to profitability, price declines resulting from deterioration of operating environment and the impact of the flood. During the quarter, LCD TV unit sales decreased 24% to 6 million units.

Excluding restructuring charges and impairment losses, an operating loss of ¥33.5 billion was recorded. During the quarter, we recorded ¥65.5 billion impairment losses including a ¥53.4 billion of shares in LCD. Operating loss including all of these processes was ¥101 billion.

 

[GavinGT]

Forget console sales and 1-year leads. 360 has no doubt trounced PS3 in terms of software sales (both physical and digital), which is what really counts for these two companies.

Maybe this year. But last time I saw SW numbers it showed PS3 sold more software.

This seems to be impossible to verify one way or the other, as Microsoft apparently hasn't released a cumulative worldwide software figure in a while (if ever, officially). I do seem to remember them announcing some sort of milestone at E3 one year, but Google isn't turning up anything in that regard.

The only worldwide 360 software number I can find is shady at best. It's old, it's from Wikipedia, the link is expired, and there's no trace of Microsoft putting out the number themselves. Still, it claims 353.8 million software units sold as of December 2009. Referencing the OP in this thread, Sony claims they were at about 260 million at that time. Extrapolating that out, it wouldn't be a stretch to say that 360 is still comfortably in the lead. Also, as if there was any doubt that 360 has been leading in at least U.S. software sales, Gamasutra provided this estimate in June 2011:

 

[Elios83]

There is no such thing as rebranding chinese TVs

They are talking about making partnerships with other TV manufacturers to offer cheap TVs.
That for me means that they will rebrand cheap TVs made by chinese and taiwanese manufacturers and slap the Sony name on it and sell them as entry level products.
Then there will be TVs designed by Sony but with outsourced manuafacturing like Apple does.
What is clear is that Sony is going out of competitive race with Samsung, LG on LCD TVs, they have realized they can't compete because they can't offer a truly superior product and their competition will always have cheaper prices.
So they will continue to offer LCD TVs as a commodity product but focus on new technology to differentiate.
I think the message is quite clear honestly.

 

[muu]

Q&A sessions seemed to be as interesting as ever: PSN profitability in 5 years, except they have no concrete plans or ideas on how to achieve that goal.

 

[bananas]

Q&A sessions seemed to be as interesting as ever: PSN profitability in 5 years, except they have no concrete plans or ideas on how to achieve that goal.

Oh, they have a plan. They just don't want to publicly state that the PS4 will require PS+ to play online multiplayer.

 

[Kazerei]

Sony Discusses F3Q11 Results (Seeking Alpha)

CPS Segment


Game Business

Now Game business, sales and operating income decreased year-on-year for the Game business. Although we achieved sales that were basically to our expectation for PlayStation retail which went on sale last year, Game business sales decreased due to the strategic price reduction of the PS3 hardware and decrease in unit sales of PS3 hardware.

Despite an increase in market expenses for network services and impact of the price change of PS3 hardware, we maintain consistent profitability. PS3 hardware unit sales were ¥6.5 million, tying the March 2010 fiscal year for the highest Q3 sales.

TV Business

They sold less and at a lower price.

Come on Sony, another price cut please!

 

[GavinGT]

They sold less and at a lower price.

Come on Sony, another price cut please!

I'm not so sure about that move....for a company that's bleeding money, potentially forfeiting nearly $1 billion due to price cuts over a year might not be the best move.

 

[gundamkyoukai]

Sony really needs to sort out there TV business.
Yeah this year was bad thanks to the flood , earthquake along with other stuff .
Still it's there TV business that has been really hurting Sony the last few years .

 

[Punchpudding]

I think Sony has a bit of a 'not invented here' bias that's hurting them. They've set themselves up so that a consumer can play on a Sony Playstation (with a Sony Cell processor and Sony XMB OS), on their Sony TV, a Sony published game, printed on a Sony Bluray, while connected to a Sony Phone (or Vita), while listening to a Sony Music Entertainment artist...

This is all well and good if you're dominating in one or more of these areas but its also clunky and difficult to sustain (unless you're Apple). I honestly think there are lots of little pieces of the Playstation ecosystem that would benefit from some outside innovation (XMB or PSN are big ones).