PS3 forecasts: Setting the record straight, wondering about their Q2 report

[Dodece]

You know it occurs to me that Sony could have a much simpler reason for their hardware production exceeding their needs many fold. They might be pushing to get to a position where they can bolt from the console market.

Right now Sony has no choice but to stay in this market. They cannot leave now they would lose billions on the venture. However if they can ratchet up production, and equal out their loss ration with profit ratio on later machines. They could effectively make the machines have zero cost for production. Once they achieve that they can halt production. Actually they might actually be forced to. Until those machines are sold Sony is out the cash in hand.

What this means is they could build fifteen million units. Stop production and sell off the remainder of the units through the consoles life. After all how many consoles will not sell at the very least that many, and more to the point if not as a console then as a movie player then. They can remove their hardware loss in less then a year, and the licensing fees can help make up the other losses down the road.

Sony can actually afford to wait quite some time to sell off the units. They borrowed heavily to finance their console, and those loans are probably not due for their payment for many years. So Sony would do well to cover its losses so it could walk away from the market.

There is a difference between winning, losing, and staying unchanged. Right now I think that Sony would have a major goal of at the least staying unchanged financially. They really do not want to lose, and they are realistic about their chances of being able to win. They would like to win, and if they start too then the safe path will not cost them anything hell it would put them in a position to take advantage of it. However if they do not win they are in a position to leave the race without actually losing anything for the effort.

Just an interesting way to look at the question perhaps Sony is running up production so they can run out of the market. Most of us would not think this way basically, because we could not afford to. We would never spend into a problem to cut costs so we can sell off and leave. However we do not have the resources or the volume of production a company has. How would we view the world if every month our bills would go down at an average rate.