The Math of Undertracking

[amirnetz]

NJ5 said:

"Again, neither of those are about business performance"

Tretton was obviously trying to mislead people into believing the PS3 was selling out in virtually all stores, when it clearly wasn't the case. How is that not about business performance?? Any investor who believed it would have been misled into thinking that the PS3 was a blockbuster success.

"You are not allowed to round the numbers"

So if, say, a console shipped 4.99 million units they can't say it shipped around 5 million? I highly doubt such a rule is ever followed (if it exists).

 

No. First - Tretton was not reporting numbers - therefore these are not business performance statements. Just like a PR statement of "Our product is flying of the shelves" is not a business performance statement.

Second, Tretton was actually telling the truth about the shortages. See link below. From his perspective, there was a severe shortage of PS3 is the USA and he had to airlift them from Japan.

http://www.australianit.news.com.au/story/0,24897,21031910-15306,00.html

Lastly - no you are not allowed to round up the numbers. You can say "we sold almost 5M units", or "by next week we'll have 5M units sold" or wait a couple of days to until the sales gets to 5M to make the statement true. You just cannot make up your own numbers.