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Adinnieken on 03 January 2012
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pezus said:
Adinnieken said:
I don't think people realize that even if at the end of this week VGChartz number suggest that the PlayStation 3 comes out on top in World-Wide sales, it loses. It does so for two reasons.

1. As per Sony's quarterly financial statement, Sony was taking a loss on each PS3 sale due to the price cut. If they were losing money with a $50 price cut, then you can be darn sure they were losing their shirts with the $100 price cut for Black Friday and any specials they offered. Sony is losing money, now not only with the PS3 but with the PS Vita as well.

2. Microsoft has been gaining sales and market share without the investments that Sony has had to make. Sony's investments in exclusives haven't resulted in any considerable sales or market share improvements. It gained more market share from FIFA 12 than all of it's exclusives combined.

If Sony comes out on top it'll just mean a hollow victory. Especially if the Xbox 360 continues to sell well in North America and sales increase in Europe.

Funny how some of you always resort to "profit" to try to belittle PS3.

The only importance these numbers have is for investors.  Sony "winning" a battle of sales at the expense of profit can be a bad thing if those sales don't reflect long-term profits elsewhere or certainly in this case, can have a negative impact on your overall business.  Remember, Sony is the company whose credit rating just got down-graded because their business financial future isn't so bright.  Now with sales of the PS Vita tanking, and retailers in Japan taking to making their own price cuts just to generate sales for the device, things aren't so good.

Sony elected to issue a price cut on the PS3 believing it would generate a greater amount of sales, however the return on investment was marginal.  They took losses, and they will continue to take losses unless the sales significantly increase due to the price cuts.  But besides sales, they also have to deal with exchange rates, and the flooding in Thailand.  While Microsoft has to deal with these issues as well, the reality is because they have fewer sales in Japan, and they offer a HDD-less model of the Xbox 360. 

Fanboys can sit and pat each other on the back if Sony actually does finish #1 world-wide, but from an investor's perspective it's a hollow victory.  For Microsoft even if they don't make #1 in world-wide sales, it'll be a huge victory.  What they've done in the US with Xbox 360 and Kinect sales is astounding, especially at this late stage of the game.  But Sony paid a price this year for the #1 spot.  Had the price cut generated the sales they expected, I wouldn't have considered it a hollow victory, but given the fact that they didn't do as well as they even hoped they would with the price cut it is.  I can't help that you don't like me saying that, but that is the reality.