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Kentaro
05-19-2006, 01:29 AM
Sony's Huge PlayStation 3 Bet

We examine Sony's financial statements and the impact the PS3's launch and eventual success or failure will have on the company at large.
by Gerry Block

May 17, 2006 - With E3 come and gone, Sony has now played their biggest cards in the PS3-hand. Price point, launch date, and playable games all made their debut last week, and it'll be a pretty big surprise if we get another info dump of this magnitude before the Tokyo Game Show in late September and the actual system launch on November 17th. With most of the critical information now available, a far clearer picture of Sony and their plans for the PS3 becomes apparent.


http://gear.ign.com/articles/709/709082p1.html

CupOWonton
05-19-2006, 01:39 AM
Because sony doesnt make or own anything except playstations.

M.E.L.
05-19-2006, 03:51 AM
HAHAHAHA... whew, wow people gotta keep posting things like this or believing it so I can come home from work to a good laugh :)

Just as wonton said... Sony isn't all about the playstations and even if they were, this isn't going to break the bank. They're stepping out on a limb with the PS3 just like MS did the 360; nothing to risk, nothing to gain as they say.

-s

noisewar
05-19-2006, 04:24 AM
Because sony doesnt make or own anything except playstations.


I thought SCEA was their most (only?) profitable section. Someone correct me on this?

Bael
05-19-2006, 05:07 AM
I thought SCEA was their most (only?) profitable section. Someone correct me on this?

From the second paragraph of the article, which I don't think either of them read:

Over the past four years, the conglomerate's revenues have remained essentially flat, while operating profits have increased by only 3 percent. Though the total amount of money (revenue) that flowed into Sony last year was an impressive $67.94 billion dollars, their profit margins were a slim 1.65%, figures that reveal a giant corporation barely squeezing profits out of its many disparate holdings in consumer electronics (http://gear.ign.com/articles/709/709082p1.html#), movies, music, and videogames.

Sony makes a ton of stuff, and has their hands in many markets, but they haven't been seeing too great of profits lately. That being said, its ridiculous to speculate they'll 'break' over the PS3. Though I don't see it doing nearly as well as the PS2 did.

OneSharpMarble
05-19-2006, 07:39 AM
I think Wonton hit it on the head before, if Kentaro isn't with one of those internet forum ad agencies I will eat my mouse.

Just admit it Kentaro, we wont chase you out with torches or anything. :twisted:

M.E.L.
05-19-2006, 02:05 PM
I thought SCEA was their most (only?) profitable section. Someone correct me on this?

I believe so, SOE seems to have plummeted in recent years while SCEA continually gets stronger with each release... though last I heard SCEA had bought into a large portion of SOE or something. Not sure how Imageworks fares budget wise or how any of their product lines do profit margin wise either.

-s

quyeno
05-19-2006, 02:54 PM
one of the reasons why Sony's profits have been relatively flat is the fact that its has alot of CRT fabs which have been loosing money and that they have been sourcing LCD's for their tv and monitor ranges. However Sony now have the ability to manufacture their own flat panels and other key components which will mean a very much larger increase in profits. The TV market is also going through a major transition period which should resolve within the next 2 years when TV broadcast goes to digital. IF (a VERY big if) the ps3 doesn't sell, i don't think it will break sony's back. The Cell processor is also being used in other numerous products including the science and defense sector. So the Cell will be making money else where and not just via PS3 sales.

SHEPEIRO
05-19-2006, 03:06 PM
the PS3 sucsess is quite a big gampble because its tied in with the sucsess of Blueray, if the PS3 sells then so will Blueray if on the other hand Blue Ray is beaten by HD-DVD then it will be a big risk IMO

PyRoT
05-19-2006, 03:07 PM
Though a PS3 failure wouldn't see Sony go down, they might decide to close their console down division thus going the SEGA way. Another bad thing that can happen is some flaw in the console which requires lots of free replacements.

I wonder about soemthing else though though. I think the XBOX360 came out before or just at the start of these rocketing fuel prices. Could today's higher cost of living result in many people not being able to get a PS3 even if they really want to? And if they do get it, maybe they may not buy as many games which could hurt Son'y attempt to make up for the loss of money in console sales. I really would like to know how much each PS3 is costing them.

Tomek

chadtheartist
05-19-2006, 03:07 PM
I find it interesting that Sony is trying to do so much with the PS3. It just seems pretty risky to put all your eggs in one basket so to speak.

CupOWonton
05-19-2006, 05:08 PM
The Cell processor is also being used in other numerous products including the science and defense sector. So the Cell will be making money else where and not just via PS3 sales.
The money that is traded in some of the serious science and defense contracts dealt in the world could probably BUY sony's compedators. So yeah, if theyre getting any contracts for that, they should see some proffit after a wile.

Kentaro
05-19-2006, 06:02 PM
Internet Forum Agency?


what tha?

It's just news take what u will from it.

Ninjas
05-19-2006, 06:22 PM
While I already commented on the "economies of scale", and loss projections in another thread, I do think it is funny when game review writers think all-the-sudden that they are some kind of business analyst.

I like how the more expesensive PS3 has chrome on it. I wish I could pay even more to get it gold plated and have spinners on the sides.

Koogle
05-19-2006, 06:32 PM
Well like all Sony formats they've all been rubbish and overpriced, and I don't think Blue-Ray is going to be much different, it also has an awful name. I don't the PS3 will be a big success either, Microsoft are already out there with the x360 and with Sony's early announcement of the PS3 price and packages I don't think many will stick with the brand name after release especially if the game selection on release isn't offering anything better than the x360.

And even though the x360 will offer external HD-DVD support and probably won't be a huge succes it will boost the market some more, I think the HD-DVD format will be more of success than blue ray., so as the HD-DVD's come in cheap and get a decent amount of support from the movie industry things will be good for them. Don't think it will be long before people will have more options to just legally download a movie and put it onto disc themselves.. although I suppose more DRM rubbish will have to into the software but thats the way they want it.

richcz3
05-20-2006, 12:42 AM
More important than how well the PS3 does. I'm not buying into the idea that the current slump in existing and new game sales can still be attributed to waiting for the PS3. I can almost bet that even after 3 months after the release of PS3, the gaming market slump will continue. All the console makers (Sony, MS, and Nintendo) will be equally singed.
I can see the hand held and wireless markets will see an increase in the same time.

PhilOsirus
05-20-2006, 04:00 AM
April sales were way up, a reversal of what was expected. The mobile game market is having huge issues at the moment too, it's not picking up thanks to consoles like PSP and the DS. Video game sales are said to be "down" but that's because we are in a transition phase and more people are playing online games with online fees like WoW, and that's not counted in the sales.

Companies will make a lot more money with online games and downloadable content.

quyeno
05-30-2006, 11:00 PM
the transition slump will probably still be felt for at least another 12-18 months after the ps3 launch.

Valkyrien
05-31-2006, 03:25 AM
I'll probably buy it.:) Just call me a sucker if you want, but it's got the most features of any next generation console--ergo, the higher pricetag ;)

RmachucaA
05-31-2006, 04:56 AM
or the biggest sucker, depends how you see it :D

just being the devil's advocate :P.

D-3
05-31-2006, 04:57 AM
I think the Blue Ray will win!!

is technologically better, more storage space cam come to storege 100gb, can play back content while recording to the disc at the same time.

More Storage space = better image, and have more more companies:
Sony, Dell, Hewlett-Packard, Hitachi, LG Electronics, Matsushita Electric Industrial (Panasonic), Mitsubishi Electric, Philips Electronics, Pioneer Electronics, Samsung Electronics, Sharp, TDK, and Thomson Multimedia.

and Sony holding the rights to Columbia Pictures and MGM movie and television libraries, there will probably be a hole in HD-DVD's content.

the side of hd-DVD what we have?

nothing...

because the movie studios will sell in both formats.. I love the capitalism !!!

some people need to speculate, they earn a living making that! !

c ya!!

CupOWonton
05-31-2006, 06:08 AM
You are all SUCKERS!
INFINIUM LABS PHANTOM CONSOLE WILL WIN! :O

CupOWonton
05-31-2006, 06:10 AM
I think Wonton hit it on the head before, if Kentaro isn't with one of those internet forum ad agencies I will eat my mouse.

Just admit it Kentaro, we wont chase you out with torches or anything. :twisted:

What am I supposed to do with all these torches we bought? You said it was going to be fun.

sheppyboy2000
06-09-2006, 02:40 PM
First off, Xbox 360 did launch around the time game prices were nearly $3.00 so that isn't really an issue. Second, I really want to know where this $70 a game price came from. Most people blame it on BluRay but there is a problem with that... single layer BluRay is actually cheaper to make than dual layer DVD. Makes you wonder how a company will jump prices up by $10 to recover a $.08 increase in cost to manufacture.

Plus, BluRay has 5 of the six major studios and, of the two, the most pornographic support which actually won the VHS vs. Beta war and I have no doubt that, would Sony have allowed it in the US, pornographic UMDs would have skyrocketed PSP sales. I mean, look at how viable in the market it has become in Japan based upon that alone. HD-DVD, meanwhile, only has 4 of the six studios, lacking the two exclusive studios BluRay has yet obtaining their own exclusive studio. The cheaper price on the HD-DVD format will matter worth not when people see the movies they want are just not coming to HD-DVD. BluRay, despite being more expensive, has more support, by a long haul.

Of course the technology in PS3 can be marketed to other places as well. As mentioned here. Not to mention the not-so-subtle hints from Krazy Ken that much more feature loaded versions of PS3 may be available in the future (ala PSX).

And since when did losing to Nintendo mean "failure?" Despite the fact DS is killing PSP, PSP is still a very strong console and, unlike previous contenders, is making a huge dent in marketshare with Nintendo. But most of all, PSP got profitable real fast and has their own stable of killer games.

But what about the bad press of PS3? Well, consider this for a moment. PSOne got bad press. So did PS2. Will it be a runaway smashing success like PS2? Very doubtful, it it will be sought after at launch. They will be hard to find during the christmas season even though Sony, unlike Microsoft, will be producing them in reasonable numbers. In the end, Sony is banking on two drastically different kinds of consumers this time around. The first is the kind of consumer that is a hardcore gamer. They have them. The games alone (FFXIII and MGS4) could sell the console. Then they are targeting the technophile. The ones that have to buy Razors because they are small and cute. The ones that spend $400 on the latest portable music/video player. The ones that buy Macbooks just because of the style. The kind of people who NEED LCD screens because they are "awesome." That's their secondary market. Then, as PS3 fills the marketplace, they'll drop the price to target casuals within the first 8-12 months.

SHEPEIRO
06-09-2006, 03:01 PM
sheppyboy- theyll stick another tenner on it because its Blueray, cds were alot cheaper to make than carts, but these were more expensive to start off with cos they were shiney and nice :-)

good point about losing and failiure, most people consider nintendo as the loser of the last console generation, but it made the most profit, and brought out some quality games.

the trouble with the ps3 as i see it is the consoles are finely balanced financially, and it looks like soony may just be a touch too high this time round, i hear quite alot of umming and arring from developers as too whether the risk of developing for it is too great. this could tip the balance, anyway they are playing a dangerous game, it could be a good gamble but it could also be slightly disasterous

mech7
06-09-2006, 03:14 PM
El cheapo edition doesn't ecen have HDMI which makes the blu ray player kinda useless.. but im guessing the marketing boys wanted to have 2 versions.

sheppyboy2000
06-09-2006, 03:16 PM
sheppyboy- theyll stick another tenner on it because its Blueray, cds were alot cheaper to make than carts, but these were more expensive to start off with cos they were shiney and nice :-)

Umm, no they weren't. Sega CD games were $40-$50. Sometimes $60 for WD games. Sega Genesis carts wer $50-$60. SNES carts were $50-$85 (chrono trigger). Likewise, N64 games were $60-$85 (MK Trilogy) and PSX games maintained a $50 range for a vast majority of their games.

SHEPEIRO
06-09-2006, 03:46 PM
erm ok your probably right as i didnt write the prices down at the time (should have known theyd come in handy), i may be remebering it wrong, but in the uK i can remeber thinking the Megacd games being 60-70quid where a cartridge was 30-40
hey ill give you that one just cos your names slightly similar to mine:scream:

EpShot
06-09-2006, 04:59 PM
More Storage space = better image
!

they both output 1080, the exact same image. and can both fit an entire movie on 1 disk.
i'm all for the Blu-Ray winning, btu i think its doubt ful because the players are twice as expensive, arent' realyl on teh market yet, (while Hd-DVD players are selling out, alogn with the crappy list of movies) and both perform as a movie player, eaxclty the same. admittedly the ps3 and Sony and movie industry backgin WIL help them and give them a running chance. But unless the players drop price FAST,HD-DVD will win. unfortuntely

sheppyboy2000
06-09-2006, 06:22 PM
Shepiero, I can't really say for certain about Europe pricing because I lived in the states all my life so you may be correct about your region. But Europe has always gotten shafted with game prices (and even releases).

But someone just made mention, BluRay players need to see a price drop fast...
They will. It's called PS3. $600 for a BluRay with a built in next gen console and 60GB HD space for $400 cheaper than a stand alone BluRay player will have it's benefits. Such as the price pressure applied to the stand-alone players will be force drops in price damn fast.

aaraaf
06-09-2006, 06:35 PM
I'm really curious about how this all pans out for Sony.

They ruled the CRT television market (at least with quality)... I have a CRT Trinitron and a lot of philes liked them quite a lot. But their DLP's just don't look as nice as other brands.

The Vaio's were a pain. The bean sucks monkey butt. I got one for my daughter and wish I had taken it back as soon as I realized it doesn't actually play mp3s... which I know someone who took back a larger version for the same reason. I still haven't loaded their crap music player so that she can transfer songs over on my new build.

I think that Sony may have grown in too many directions and they have a lot of conflict of interest in their company. Content availability vs. music players vs. music publisher, Movie Producer vs. Movie Distribution vs. Movie Players. All of the problems and horrible reviews of the Vaios and the beans and... are really hurting their rep as a company.

AND I think that HD-DVD (while obviously an inferior storage medium) is going to win over Blu-Ray simply because of the name of the device. HD-DVD... the name makes sense to the public. Blu-Ray... when the customer asks, "what's that" you've probably lost them.

Beta Max... now THERE was a format! :scream:

sheppyboy2000
06-09-2006, 09:00 PM
Actually, pick up this weeks New Yorker. They have a profile piece on Sony CEO Howard Stringer where he does admit Sony has become a decentralized group of studios that no longer work together and he's trying very hard to get them all back together.

JonShipman
06-09-2006, 09:31 PM
The likely scenario I see is computers adopting Blu-Ray and movies going more HD-DVD. As in BR-Rs and REs will sell more than HD-DVD-R's. Mostly for the more size issue. Recordable BR disks @ 25GB are already only $3 more than 15GB recordable HD-DVDs. Movies on HD-DVD seem more plausible because of backwards compatibility with existing FAB machinery.

You can fit 1080p movies on DVD9. Though without extra content - and I see studios want to stop the "dual DVDs" that we've gotten into. 2 DVDs cost more that 1 HD-DVD to FAB. I dunno 2 DVDs to 1 BR so I do not know that cost variable.

Or I see it like the whole DVD-R DVD+R incident.

tozz
06-09-2006, 09:52 PM
The likely scenario I see is computers adopting Blu-Ray and movies going more HD-DVD. As in BR-Rs and REs will sell more than HD-DVD-R's. Mostly for the more size issue. Recordable BR disks @ 25GB are already only $3 more than 15GB recordable HD-DVDs. Movies on HD-DVD seem more plausible because of backwards compatibility with existing FAB machinery.

You can fit 1080p movies on DVD9. Though without extra content - and I see studios want to stop the "dual DVDs" that we've gotten into. 2 DVDs cost more that 1 HD-DVD to FAB. I dunno 2 DVDs to 1 BR so I do not know that cost variable.

Or I see it like the whole DVD-R DVD+R incident.
Highly compressed H.264 can fit yes, not anything else. Movies like Gladiator weighs in at 14gb from HDTV streams, and that's 1080i. Quality isn't that great so for retail content bitrate has to be higher + 1080p. I say HD-DVD is lacking space allready. Probably a reason why the players are 1080i for now too.

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