The Yen is Killing Sony - Is a PS3 Price Cut Even Possible for 2009??

[amirnetz]

joshin69 said:

amirnetz said:
Sony's next financial reports are going to be pivotal to the company's strategic direction.

The gaming division is making only 13% of Sony's revenue but for the last two years it is consistently dragging down the company's profict by over 50% . (NJ5 will have the exact numbers).

The Playstation brand had transitioned from being the flagship brand for the company and instead became the symbol of everything that went wrong with Sony. The business performance of the gaming division is highly visible and the PS3 had become the whipping boy for the press, analysts and investors. Most of them are not playing any games.

One more disasterous quarter in the gaming division, perhaps two, and Sony's management will be pushed to take drastic measures. With this economy and the kind of pressure it is under, anything is possible. Anything.

I think that is a mile off to be honest. The only real gripe the world seems to have with the PS3 is price, and that is only because MS and Nintendo have changed the market landscape.
I think talk of a company with 117.5 billion US$ worth of assets acting as twitchy as you are making out wouldn't have the same management for long.

 

You really think the analysts and shareholders care about the PS3 price? Bah.

They only care about the business performance of Sony. From their perspective the PS3 is responsible for taking a highly profitable business division and turning it into a cash sinkhole. It is responsible from dropping Sony from a dominant "win the market by default" player to an struggling niche player in the console gaming market in just two short years.

From their perspective Sony's management made a serious of bad decisions with the PS3. Starting with misjudging the market needs, continueing with a costly product design, failing to secure the 3rd parties, delayed launch, non-competitive price point and lack of defining system seller tiltles. These are all things that a good management should have foreseen and avoided.

They care about what happens to the profits. What happens to the enterprise value of the company and what happens to the stock price. They are concerned that the current management with its poort track record cannot turn around the situation. That is what they care about.

These people are disappointed and enraged. They are out for blood. And they will get it.