Sony FY 2008 Q2 Results Analysis SONY BLEEDING LOOKING BAD

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Bumidan! You've found an area with a lot of interest, I expect you'll recieve the interest your threads have always deserved here friend.

Now regarding cost: Development is going to be a big one!

Each chair costs Sony ~100k per year. If you look at EAs recent layoffs of ~500 people to save ~50 million dollars then it holds true.

A very quick and easy analysis for payroll costs is simply total the quantity of developers and multiply by $100,000.

Regarding operating expenses -> PSN would probably cost more than Xbox Live to manage and run as they rely on servers rather than P2P like a lot of Xbox Live games. There are two other comparable services currently, Steam and Xbox Live. Steam most likely relies on a margin on each game to run its servers so effectively brick and mortar store margins = server upkeep for them. I have no idea how to work out the cost.

Another thing with PSN is the frequent updates to the service, remember there are programming and testing expenses with the frequency of updates they have. Remember 100k per year per person.

Since they have so many projects coming to fruition next year you would expect to see personel costs rise reasonably quickly as headcounts tend to increase nearer to release.

For example, Guerilla games has 130 employees so it costs them roughly $13,000,000 a year to feed those numbers, if the game has taken say 3 fulltime years it would cost them $39,000,000 aprox to develop excluding contractors and third party companies/technology.


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Too much speculation in this thread.

Makes my head hurt.

ouch, this hurts:P


Good stuff…I don't believe your estimates are off base, and while you might not receive any hard data from Sony, alot can be determined from 10-Q's. In my review of sony's 10-Q this year, it was apparent that Sony will have to make changes in it's strategy for the ps3, because even as the system reaches a breakeven point, it is still going to not make enough money to cover the cost of free psn, much least ever hope of making back it's investment cost. In 2 years, M$ and Nintendo will be possibly releasing new console, and most likely, they are both going to have their consoles backward compatible with the last gen. This allows fans to transition seamlessly. the ps3 will suddenly be outdated and outclassed by newer and more fwd leaning consoles. imho, I think Sony will fight like crazy to get a console out sooner, rather than later, which will further turn the ps3 into a relic.

"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

- From By Schism Rent Asunder

DMeisterJ said:
Too much speculation in this thread.

Makes my head hurt.

You didn't add me to PSN.

Makes my heart hurt.



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You can add me Squillies!


i have psn.. just don't know how to use it..


my name is omosai

@Bumidan if you can find a headcount for Sony developers you can estimate how much their 1st party studios are blowing the budget by. As its a continual operating expense you could assume that the cost will be similar year over year/quarter by quarter and once you work it out you could work backwards through your analysis and tighten up your numbers. One things for sure, PS3 games are more expensive than 3rd party games, Sony uses them as technical showpieces/advertising as well as profit sources.

My 100k figure was suggested by a developer on Beyond3d, confirmed by another and EAs recent statements about their savings from the layoffs independently confirm it.


the big thing is the structural deficit.

lets pretend they produced a blockbuster game that quarter.

So if all our assumptions are relatively "correct", then if they produced a hit like MGS4 (1st party), then:

Sales = 4 million units
Assume profit is greater coz it is 1st party = $5 per unit (instead of $2)

then that is still only $20 million, out of a loss of almost $400 million

Lets even pretend they made HALO 3 in that quarter.
According to MSFT - Halo 3 earned REVENUES of $330 million.

EVEN IF (VERY BIG IF) they made a NET PROFIT OF $50 million on Halo 3, then IT STILL DOESN'T PUT A DENT in that LOSS.

So even if they keep producing a Halo 3 1st party BLOCKBUSTER every quarter, they lose money.
Again, note that last quarter Sony made money.
And HOPEFULLY in the Holiday quarter, they will also make money.

But PS2 is basically dying, PSP is not selling any software (where the high margins) are.
PS3 is selling decent software and hardware

But the division is still BLEEDING money...
so there must be some sort of structual problems, because it is now 2 years in.

that is assuming the PS3 is almost BREAKING EVEN on hardware already....

btw, my msft thread didn't get any love, so i will plug it here... hahahah