Squilliam said:
BengaBenga said:
SpartanFX said:
^^^if bluray picks up yes,,,any format change needs investment and everyone knows that. |
I wonder if ruining one of your top divisions and brandnames as well as losing the amounts of money they have been losing is ever going to repay itself due to BluRay.And you forget that the PS3 development is obviously not the only investment they made for BluRay (not by far). The PS3 was the Trojan horse for BluRay, but the R&D for the format will liekly be in the billions as well.
The losses from 2006-2008 are irrelevant
Besides the fact that losses have to be written of against something the situation is completely different now. Past few years Sony as a company made a profit, which made the losses at SCE a little more acceptable for the shareholders. Now the whole company will likely be in the red, which means something has to be done. If you take a look at the figures you'll see that SCE is one of the worst performers within Sony and if there will be budget cuts (which every company is going through right now) it's highly unlikely SCE will be spared.
A $100 pricecut will mean $1 billion less revenue on 10 million consoles. I don't think SCE and Sony will like this option. This will in all likelyhood be the third year with a loss for SCE, it's hard to see why the company would want to bleed that much money on a division that only provides 13% of Sony's total revenue. That's the thing that's (logically) often missed on a game forum, SCE is not that important to Sony. If they have to make the choice between consumer electronics and gaming they'll choose consumer electronics. I'm not saying at all that SCE will be sold, that's not very likely, but I totally expect them to focus on profitability.
I would throw much of the cost of the game development under the heading "Blu Ray format costs"
Why on earth do you think they'll do that? It will make SCE look better, but the BluRay division look worse. That's not a very good sign towards your shareholders, if that's the format you've asked your shareholders to invest massively in.
The more PS3s in the hands of consumers, the more 1st party games and third party royalties they can earn them.
To gain the same revenue for a $100 pricecut you'll have to sell 12 third party games or 4-5 first party games. Eventually that could very well happen on average, but not in the first two years. And money now is worth more than money tomorrow.
|
Whether or not the cost of Blu Ray pays for itself doesn't matter. If it does, the losses were justfied. If it doesn't then the lesses aren't justified. Either way its a writeoff. The money is gone and its not coming back. If the games they have been developing fail to earn a profit overall it doesn't really matter at this point. The losses they have incurred have already been written off in the previous years financial statements when they were making an overall profit.
It is foolish to state they would generate less revenue from the PS3 hardware in total if they cut the price. I take it you're referring to a balance between cost and revenue with the goal to generate profit. That assumption would only hold true if the people buying the console didn't buy any games for the platform. The equation looks even better if the people buying the console at a lower price also purchase 1st party games where the share of the revenue is more than 6* higher. Their cut of revenue in the United States for a full price 1st party game is actually ~$38 whereas their cut of a third party game is ~$6.
|
sorry but im going to have to go with benga, even with the sink cost put away, sony in its current state can not afford to have massive losses in a division that makes up such a small part of sony, the number of games people would have to buy per unit is unrealistic. now if they remove wifi, and magic happens and blueray production costs get cut by 75% and the special ram they use goes down in cost to where a 100 dollar price cut means a 25 dollar loss per unit they would and could go this route
and yes they should generate more revenue the sales of acc, games, psn cards, should help. your also assuming 1s party games are making profit. even with there revenue, they need to make profit, sony as a company does not have the luxury of running divsions in debt anymore. they share holders will demand action. people running sce, and sony will do what is necessary to stop the money loss. to keep this short asi have to go... right now sony can not afford a gain in revenue over a gain in profit that is the flaw in what you have up there.
