HappySqurriel said:
Dryden said:
I am not as pessimistic on this as others, because there is a bigger picture to SONY's plan. I think many of us gamers (myself included) sometimes fail to see the forest for the trees. Yes, SONY is still losing money out of the gaming arm in large part due to R&D/manufacture behind the PlayStation 3 (lagging software sales tied to the PSP notwithstanding), but the high price point was long acknowledged as being troubling in the short term, and the division is nearing profitability again. Sales appear to be steady and meeting targets, and the future of Blu Ray and SONY's downloadable content offerings are very bright.
The PS3/gaming division will return to health as consumers get over the initial sticker shock and high barrier of entry and are able to invest in the games and Blu Ray movies in the coming years.
Long term, the gaming division will be fine. SONY's bigger hurdle over the next decade will be their other consumer electronics, which continue to carry premium prices for less-and-less feature differentiation. Really, all the big Japanese manufacturers are at risk with their TV and stereo and camera sales being cannibalized by cheaper Asian imports from Korea and China.
I am a lot more optimistic about the PS3 now than I was a year ago, both as a content delivery system/BD player and as a gaming console. The major brick-and-mortar retailers are slowly trimming DVD shelf space and stocking more and more BD content. That is an encouraging sign for the future of the PS3. SONY's biggest coup in the gaming division had nothing to do with games, but rather the ridiculous sales of Iron Man on BD.
SONY might be battered and bruised for its efforts, but it appears going all-in by tying Blu Ray to the PS3, while having downloadable film available to the next big emerging market, will pay off. I'm sure it's taking longer than anyone at SONY thought or would ever care to admit, but they're getting there. |
I have yet to see anyone create reasonable numbers that demonstrate how the success of Blu-Ray can compensate for the losses of the PS3 and the lost dominance of the Playstation brand. From my understanding, the licencing fees associated with movies are far smaller than the licencing fees associated with videogames which is one of the reasons why movies can be sold for $5 while games tend to stay at $20 (or higher). If you make the assumption that Sony makes $2.50 for every Blu-Ray movie (which is amazingly optimisitic in my opinion) they would have to sell 16 Billion movies (or 160 Blu-Ray movies for every household in the United States) to recover the losses from the PS3.
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I think you're severely overstating the losses on the PS3 here. They are big, but not $40 billion. More in the order of 5 billion. Still significant. I expect BluRay lisence fees to be under a dollar, so you're definitely right that it will take a lot of BluRay discs to compensate for the PS3 losses. And of course it took a lot of R&D to develop BluRay.
