Smashchu2 said:
WereKitten said:
So let me understand something. They spent billions in R&D. The hardware is right now crossing the hilltop of profitability, and the software is making them money.
You say that "Sony is not in the game industry" - weird, it certainly looks so - but now that they can make money out of the trojan horse they put in the living rooms, out of digital content and BluRay royalties and services, the investors will "demand to end the PlayStation experiment"? And what, close the PS3 fab sites, fire the first party developers and 1) renounce to the revenue and 2) renounce to the living room? What is the business sense of that?
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First, I am really upset with how my paragraph came out. I need some spell check on this forum.
To all your comments: Yes
- Sony is not a part of the industry as we would think. Nintendo makes all their money off of it. As does Sega, EA, Activision, Ubisoft, Square-Enix, Temco(who is now merged with Koei) and so on. Sony has other sources of income. They tied themselves to the industry by using their other products in a gaming machine. They were trying to disrupt computers though games. They are not dependent on it and can leave at any time. The companies I mentioned can not.
- Investors will probably want the PS3 gone, asking why they are in an unprofitable market. If Sony can not turn it around in terms of profitability, expect to see the investors deny a PS4. Again, Sony is not a game company. Nintendo can always gets a game system past their investors becuase they invested in a video game company. Sony investors invested in a hardware company that deals in entertainment. They are numerous outlets besides gaming.
- Lay offs happen. Heck, they will happen now in an economic turn down. Labor is a company's highest cost. Easy way to shead it right? They may keep a few. but I expect most will be laid off and the others will make software for other systems.
- 1) renounce to the revenue and 2) renounce to the living room? Huh? First, profits matter. Revenue does not. Sony isn't making profit. You always make some kind of revenue. For two, there is not some mysterious battle for the living room. They are just trying to make money. There is no point for fight for the living room if it isn't going to show a return. The PS3 has been losing money for about 3 years. It sounds like they might be done with it.
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1) I understand what you mean. But what you said doesn't mean that. If you want Sony is not exclusively in the game industry. As they are not exclusively in the computer industry or in the TV production industry.
2) What does "want the PS3 gone" mean exactly? Numbers tell that the PS3 per se is now bringing a profit with each console sold. Stop making PS3 and selling them and you're losing marginal profit now and potentially bigger profits in the future. Money spent in the past stays spent. So I reiterate my question: what is the business sense for investors to ask to cut short the life of the PS3?
SCE is more than the PS3. And its losses and profits and investments and expenses are not entirely on the PS3 shoulders. More than that, we don't have the details to financially split the PS3 from the rest.
3) Again, most likely their studios are profitable, and more so as developers for their own console than for other systems.
4) I know that profit is what counts. And yet with great investments done in the past for R&D and infrastructure they are certainly going to look not only for enough revenue to have a marginal profit, but also to cover past investments. The battle for the living room is not mysterious at all. It's what you called "disruption of computers", except that it's not about the computer at all, it's about the media, entertainment, net service box.
