Breaking News: Sony to post massive $1.7 billion loss

[Demotruk]

BengaBenga said:

Demotruk said:

Christhegamer said:

If this was any other kind of forum we would all be saying that the playstation would be chopped, it is losing money, doesn't look in the short term to be able to turn that around. The only way of selling more PS3 is to cut the price which would lose more money. This is a no brainer for any one apart from PS3 owners. The PS3 is failing and nooeds to be stopped. Maybe in 2 or 3 years they could relaunch the PS4 but as a sony devision it looks doomed. All the other devisions were making money last year and will again without a harmful price cut. This is reality not wishfull thinking.

 

Agreed, though I only think we'd say that because we'd not have taken an in depth look at the division if we weren't a gaming forum. They've been unprofitable by trying to win the generation, and because of that, most of their losses are already sunk and will never be returned. However, it's a division that can be switched over to moderate profitability in the short/medium term more easily than the other parts of the company.

All they have to do is admit defeat in the console war(internally). Once they've done this, they can switch focus to simply short term profit instead of loss-leading. How do they do this? No price cuts, and profit focussed software as opposed to unprofitable "system sellers". This doesn't require the restructuring that the TV's and other areas will require.

Ehm, how? And why does SCE suddenly will outperform the rest of the company while it has underperformed past years?

All I see is 3 years of losses in a row. Doesn't look like a division that can be switched to profitability very fast. If it was easy it would definitely have happened this year, since that was the main message from last year.

As it stands now PS3 won't have a pricecut therefore will likely lose marketshare and it's very probably the rising PS3 software sales won't keep up with decreasing PS2 sales. Meanwhile SCE has an infrastructure built around marketleadership. Sony has more studio's than Nintendo, which is unsustainable with PS3's development costs and low install base.

 

 

And in that time they've maintained a loss-leading strategy. Of course they've made a loss.

The reason I see this division as more flexible is because it's more based on software than the others. It's much easier to switch strategy in software than it is with hardware.