Well ok then but what's the point to analyse quaterly results? Big corporations have development and bussiness plans for few next years planned. They knew it very well that they will be taking loses in x initial years of ps3 lifetime

bumidan is very likely correct in his assumptions when one compares the last two quarterly results from Sony. The last quarter showed a big deficit increase which can be attributed to structural problems or some unknown variable pulling down the resutls.

BengaBenga is almost certainly wrong in a big way. Remember the big outcries when Sony cut out PS2 compatibility off the PS3 and announced a major cost savings? I've seen several reports that claim almost $100 manufacturing savings by removing backward compatibility. Removing backward compatibility essentially meant removing the two PS2 chips - so if those chips are worth $100 according to some opinions, then a complete PS2 would cost over $150 to manufacture... I'd guess the manufacturing costs of the two PS2 chips are around $50, so a complete PS2 could cost around $100 to manufacture. And the manufacturing costs are actually _rising_ right now, not declining due to exchange rates and massive increases in shipping costs (particularly to Europe if you read the news lately).

So, at this time, as far as manufacturing is concerned, Sony very likelyy:

-loses money on PS2 (and possibly on PSP as well)

-barely breaks even on PS3 (if PAL > NA and Jap <<< PAL,NA)

I don't think they expected that amount of losses in first years and the difficult to expand their userbase that PS3 encountered ( last fiscal year they revised down their PS3 forecast to 9.5M yet PS3 missed the goal ).

And obviously they can't predict the current credit crisis.

Like I said their original expectation was to start to profiting from SCE from this curretn year on ward ( I don't think they will ).

Considering they're probably about to lose 10-20% of their cash reserves in a single holiday quarter when they're supposed to have their biggest profits, I'd say that's a major problem right there.

In a business as usual scenario under the current conditions they could run out of cash in one or two years. That's before even accounting for lower sales due to the recession. Sony will have to do big changes unless the dollar/euro recover.

The sky is falling! The SKY is FALLING!

Let me reword the above as obviously it's not extreme and absolute for you. I am 100% certain PS3 penetration has helped HDTV sales and vice versa.

If Sony does run into major losses in the future (which isn't yet the case), maybe some execs won't get their bonusses and Sony may let some workers go. The company employs over 180K people worldwide, over twice an employer than a company like Microsoft is.

Sony has huge assets and excellent wide ranging expertise, we will see other major electronics companies break down much quicker than Sony will.

Microsoft had over quadruple the net income per year of Sony with that half amount of employees - which gives a basic comparison of future business outlook in times of recession (not sure why a comparison with MS was done in the first place though).

Aaaah.. the joys of having a worldwide monopoly on certain softwares

Sony has themselves to thank for. If they think that people just buy their console at this time of year when financial crisis is taking the overhand and sell it pure by the games they have released... they've got another thing coming. Price "does" matter and sales show it.

I've outspoken my thoughts many times on the Blog PlayStation that they should drop the price. I don't care if they lose money or not, they're losing now as well. They're losing exclusives, they're losing profit, they're losing more and more sales. The 360 is a cheap bargain and the Wii might be more expensive than the 360 but thanks to advertisements the console is appealing to families. Plus postponing games, postponing Home, games filled with bugs or lag (Socom, LBP etc.) doesn't make it any easier. My opinion is also that the PS3 is still suffering from a large amount of variable games in different genres. There's just not enough to entertain families and not enough for like RPG fans. Mainly the action / FPS fans are comfortable with the PS3.

IMO the PS3 is "the" future of gaming, but Sony is using the present on a horrible way by nearly killing its future.

Way to focus on all the wrong indicators.

There are plenty of big companies which fail. Nevertheless, I don't think anyone here is saying that Sony will suddenly go bankrupt. At least that's certainly not what I'm saying. I'm just saying they'll have to do significant changes in their business unless the economy and exchange rates start helping them instead of hurting them.

When the economy and exchange rates were good, Sony had profit margins of 1-4% (more commonly 1-2%). Now that their revenue is dropping by 10-20% (even without accounting for lower consumer purchases), can anybody tell me what miracle will allow them to be profitable without radical changes?

In an economic crisis like this, I wonder if Sony is suffering from substitution of its goods for other inferior brands.

The basic principle of inferior/normal goods is that when the consumers income goes down they tend to buy more inferior goods and when their wealth increases the opposite.

So instead of buying a Sony, someone might instead buy a Sanyo and save a few hundred $$$.

Am I right?