PS3 drops out of UK Top10 - after 3 weeks

[FishyJoe]

albionus said:

NorthStar said:
The thing Sony and Microsoft has is money and lots of it.Wining this generation and loosisng heaps of cash is not as dire as losing this generation and not being able to have as good of a chance of success in future generations.The only reason this console is't selling as good as it can is the Price.

Other threads have dealt with this issue so I'll be brief, Sony does not have heaps of cash to throw at the PS3. The company's total profit is only $1 billion, they have about $4 billion cash on hand, and have over $11 billion in debt (up from $9 billion a year ago). They've put themselves in a no win situation because it is becoming clearer with each passing week that the PS3 is not selling at the rate it needs to for Sony to have any hope of recouping its investment. Their latest loss estimate for 2007 is now $2-2.2 billion (250billion yen) which is up from 100 billion yen last year. Given this trend and the fact that PS3 sales are still not what they expected it'll probably end up worse. Everyone says Sony needs to cut the price, they lose $100-200 a system, are they supposed to cut $100, $200? They finally were able to sell the PSP at cost but they've been forced to eat $30 a unit there to spur sales. At some point (sooner than I think most of you realize) Sony will run out of either shareholder patience or money. The fact is that Nintendo has far more money to throw around than Sony ($1.5 billion profit, $10 billion cash, no debt) and doesn't have battery recalls and TV R&D to worry about. Even if Sony did have enough money it's stupid of them to have put themselves in this position, they are the market leader they shouldn't be blowing money like this.

I agree it's still too early to write off Sony, and usually the first year is too early to write off any video game company. Then again usually video game companies don't lose up to $3 billion their first year and go from 20 million units a year to maybe 6-7 million. All we can say about the sales is that 3 weeks in and the PS3's Euro sales are conforming to the trend elsewhere, sells out to the few rabbid Sony fanboys with too much money in their pockets and then drops. Forget the AAA titles, 3rd party support (which will only decline faster with the latest sales figures), and all the other usual video game indicators, it's money that matters most because without it nothing else matters. Sony is getting dangerously close to discovering that.

 Great, well informed post.