PS3 drops out of UK Top10 - after 3 weeks

[staticneuron]

albionus said:

I'm aware of Sony's financial position yes. About $68 billion in revenue (I'm guessing that's the number you mean), $1.06 billion profit (or a measely 1.6% margin), debt of $11.3 billion (the interest alone must be near $1 billion a year). Who assumes Sony is a small company? Sony could cope with some losses except for the bad year they had last year and the scale of the losses they are facing. This story is from 6 months ago about Sony's debt rating being reduced due to in part expected losses from the PS3 (which are much worse than were expected at the time) http://www.joystiq.com/2006/10/11/sony-moves-a-step-closer-to-junk-outlook-negative/ Even very large companies like GM and Ford occassionaly get in too deep. Anyways, I'm asking for actual reasons why Sony's "demise is exaggerated", saying it just can't be so isn't a reason. If I am missing something financially point it out since apparently you know what it is, like I said I could be overlooking something.

Yes because sony's debt include liabilities and revolving assets (sony has 100+ billion in assets). Sony has been in billions of debt before yet they always seem to spend more.

Sony has lost near a billion with the launch of the PS3 (more around 800 million+) and last year the 360 caost microsoft 1.26 for their fiscal year last year.

http://www.igniq.com/2006/10/xbox-360-losses-dont-worry-execs.html

Most importantly Sony's profits are based off of choices. I know it has been repeated often enough but I not think people have been looking at the movie studios, record labels, banks, electronic factories and phones that they own. The cost of researching, making, advertizing and putting them on the market must be through the roof. MS posts great profits because they do not need to turn around and sink that much money back into their cycles.

If Sony was really in for a fall I am pretty sure they would have caught it before you or anyone else speculating on their demise would and they would have planned for it, instead of throwing money behind their system. I am pretty sure their accountants (which probably are quite numerous) and market watchers would have gladly have the company set their sites on whatever will make the most profits for them. If they are not shying away from this it probably shows that they know the risk's and are still going full steam ahead.

It still makes me confused why people assume that Sony doesn't know what they are doing. They have been around longer than most of us. Took MANY product risks but have seem to take fewer financial hits in return. Look at their financial history and the motives behind their departments and you should not fail to be impressed.

"That is something I wasn't thinking about, the PS2 will probably move around 4-5 million units and 50 million+ games this year.  Although I wonder to what extent that is accounted for in Sony's loss expectation for this year.  Maybe they are under estimating the PS2's sales since many people will just stick with their PS2 instead of buying a PS3 but even so I would think that would buy them maybe an extra quarter to get the PS3 in shape."

Or maybe they factored it in..... You see the PS2 as a hit to their profits (take away PS3 sales) Maybe they see at as additional profit ( because the people buying the PS2 probably would not have invested in a next gen system anyways). How people turn the sales of the PS2 into a bad thing amazes me.