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makingmusic476 on 22 January 2009
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BengaBenga said:
Demotruk said:
BengaBenga said:
Demotruk said:

 

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.

Stringer made it absolutely clear that SCE had to make a profit this year, so they didn't have a loss-leading strategy for this year. Yet they made a loss.

Software development in Sony's case is not flexible at all, because

a) Their userbase is out of their hands
b) Big AAA projects take 3-4 years to make (or longer...GT5...) 

When all these massive first party projects started Sony's estimates must have been much higher than what the PS3 actually sold. But you can't cut the budget for big games like GoW3, GT5 and Killzone 2 halfway through the dev cycle of course. This doesn't mean these games will make a loss, but profit margins will be much lower than initially expected.

If they were to do a Sega your statement becomes more valid, cause they could spread the risk around several platforms and distribute investment among different sized project. Sony bet big with AAA mega games only, which hurts them now.

 

Not all of them.  Uncharted only took a bit over 2 years to make.  MotorStorm 2 took a year and a half.  LittleBigPlanet took around three years, but it was made by only 37 people, and probably had the lowest budget of any Sony published title on the ps3 yet (not including PSN titles).  Plus, it's thus far their fastest selling title on the ps3.

As for GT5, Polyphony has only been focusing on the game since early 2006, which is why GTHD (released as a free download at the ps3's launch) was nothing more than the GT4 engine with hi-res graphics and a new GUI.  They were working on Tourist Trophy for the ps2 from 2004 to 2006.  Plus, Polyphony probably raked in a load of cash with GT5: Prologue, a game that has thus far sold 2.80 million units, not including copies sold via the PSN. That should've offset GT5's costs quite a bit.  And it's being used as a beta for GT5's online infrastructure.

Killzone 2, now, is a game that had one hell of a dev cycle.  However, it'll soon be released, and will likely be Sony's best selling game since GT4 (assuming it beats out MotorStorm).  Great shooters with great graphics sell, and the Helghast are a very marketable IP.  Even if it doesn't make that much of a profit (though I'm sure anything over 2 million sold will be pure profit), the development costs of the title have already been written off, and it'll be bringing plenty of cash to offset the dev costs of other games.

My point in all this is that not all of Sony's games take 3-4 years to make, and they usually sell pretty darn well (1+ million), despite a supposedly meager install base, and thus they are in general profitable (with a few exceptions like the NBA series, but Sony San Diego's MLB series does rather well).

Will some studios get downsized or outright closed? Possibly, but it will only effect the small studios that do very little, like Sony Foster City, whom we haven't heard from since they released Jet Li: Rise to Honor for the ps2 years ago.

As for the majority of their studios, I don't see why Sony would be unable to maintain them, as their games sell.

Most of Sony's weak sellers this gen have been from second party studios with whom they have already parted with.  I'm talking Lair, Genji, Foklore, etc. from Factor 5 and Game Republic.  They can't really make further cutbacks in this area.

You can see all the games Sony has thus far released for the ps3 here, ordered by sales:

http://vgchartz.com/games/index.php?name=&console=PS3&region=All&developer=&publisher=300&genre=&keyword=&boxart=Both&results=50&order=Sales