padib said:
theprof00 said:
Mr Khan said:
kowenicki said:
You see this is exactly what I am talking about....
I'll forgive the terrible and numerous spelling mistakes.... but...
The "analysis" in your post is just ill-informed nonsense. Their losses are due to a business model that DEPENDS on a weaker yen. The TV losses and others are just symptoms of that approach and ongoing problem. Their profit margin has always been very, very low and is now negative due to the Yen. The Source is partially correct, but again is massively over-simplifying the problem. He doesn't seem to factor in exchange rate issues that will remain and doesn't factor in the large debt that Sony have to re-finance over the next few years with a worsening credit rating that will further drag on the profit margin. He also doesn't factor in Korean and Chinese wishes to replace the Japanese electronic giants, which to be frank they can do at will it seems.
The whole business model needs reviewing. Luckily Sony (unlike their "fans") realise this and are trying to do it.... but they really have their work cut out.
Playstation may be better off a stand alone business along the lines of Nintendo... but you have to wonder how and where the R&D input would come from.
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The last point is the question that would defeat the notion of the PlayStation division which, while it brings in profits in the long run, requires the presence of other profitable divisions to remain functioning in the short run. E.g. Sony makes most of its money in the latter three quarters of the devices life, rather than the first quarter, but how much of that money would they burn in R&D if that's all they had to play with?
The PlayStation business model would need significant rewiring if it were to function independently
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It is a very bad decision in the first place.
The Playstation brand is big enough that it feeds all its other departments.
Sony has a significant stake in DVD, and makes and sells movies, ps2 used DVD. That's an example.
Looking at playstation division alone without looking at the nourishment it provides to the rest of the company, through marketplace venues or brand strengthening, is folly. The fact is, Playstation by itself would have wasted profits. It's like mining crude oil just to make natural gas, there's all kinds of other fuel that comes as a by product of making natural gas. It makes more sense to have a bucket for each byproduct than to let outsiders stand around the well waiting for payday.
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I disagree with the whole Playstation is doomed going on here, but the question I have for you is the chicken and the egg problem. For Playstation to feed the other arms, it needs to be fed itself internally. The reason is that Sony needs a loss-leading platform in most cases to be relevant in the market (hence loss-leaders for the past 2 gens). Unless it changes its current markeups and general hardware strategy (returning to profit-making systems if they ever did that), they may be in trouble.
Having said that though, I believe there are arms that are weakening the company that may need to be chopped off, but I don't think the playstation and the gaming division are part of that. Having said that though, they are now releasing the Vita as a loss-leader. In a time of difficulty, while already struggling to make profit, year over year, could the timing of this news be any worse?
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You gotta spend money to make money.
The issue isn't about Sony's products. It's about currency. Sony has always sold products at a higher price than competitors. People still buy them.
Were Sony not based in Japan, they would be doing fine.
What Sony needs to do is restructure the way their income works.
They need to someone change how profits and costs are allocated by region. Since they have several regions, they should be allocating profits to weak currencies from strong currencies.
