I've been saying it for almost 2 years now and it looks like I'll be saying it for some time yet, I'm glad I don't work in Sony's accounting department.
Another question to ask, what if this doesn't work? There's been a lot of discussion about whether it could work or what the effect of it working would be but I think the impact of it not working could be massive. Just a few points:
- Sony just broke MS' record for most money lost in a single year in the video game industry.
- The company as a whole is not in the best fiscal shape.
- Sony's shareholders cannot be happy with the recent stock slide (admittedly following a rise but people care about today not yesterday).
- Sony recently sold off 2 parts of the company, presumabely to help finance PS3 R&D debt and pay for the upcoming price cut.
- Shareholders like it when a company sells off a money losing part of the company to help money making parts but they usually don't like it when a company sells off money making parts to help money losing ones.
Given that, what happens to the Playstation brand if the PS3 doesn't see a large enough sales increase to overcome the extra $100 in loss on each PS3 sold? Sony is a large company but it doesn't make $12 billion a year and have 0 debt like MS, they can't afford to lose over $1 billion again on video games. If this prevents the video game division from reaching pofitability until late in this generation will Sony shareholders tolerate Sony spending $2 billion or so on a PS4? It's too early to say whether they would or even that it would get that bad but I do believe we may be seeing the beginning of the end of the Playstation brand. Time will tell.
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