Global UP! - Everything up (software and hardware) - March 3rd (Vita = 167k)

[Hyruken]

Train wreck said:

radishhead said:

Train wreck said:

Hyruken said:
The thing is Sony couldn't afford a Vita price cut even if they wanted to. Look at what happened to Nintendo when they cut. Huge losses. But they can handle those loses due to making so much profit this gen.
Sony on the other hand are bleading heavy losses and haven't posted a profit in almost half a decade.
In a month or so is when the Vita sales will come up against the 3ds price cut numbers. That is when the gap will start looking huge between the two.
The only thing Sony can do is try and get some popular games out and fast.

You sir are wrong on pretty much all accounts.

"Sony cant afford price cuts"

Sony has multiple products that cost more that $249/299, their tv's , cameras, laptops, cell phones, imaging equipment, the vita is probably one of the cheapest full line products they make, along with psp.  They change price all the time and sell in greater volume than the vita will for its first couple years.  The company has close to $13 Billion dollars in cash and short term paper, they can do a price cut if they want.

"Look at what happened to Nintendo when they cut. Huge Losses"

Nintendo was (is) bleeding money because of 1. currency 2. the Wii and DS had drastic y/y declines in hardware sales, which means lower software sales, which means lower overall profit.  The price of the 3DS effect to nintendo's overall bottom line is not the same as Vita to Sony because Sony is a conglomerate, Nintendo is not, they need to maintain marketshare as its the only business they are in.

"Sony on the other hand are bleeding heavy losses and havent posted a profit in almost half a decade"

The division that houses the playstation brand (along with Viao) was profitable last year (March 2011) and there were projecting profits until June of last year because of flooding in Thailand, the japanese earthquake, exiting the LCD business.

I agree with some of what you've said, but Sony can't really afford a price cut since as you mentioned, their gaming division is their only proitable one - what would happen if they started losing money on that one too? It's best to keep that one profitble, I think :p

Again Sony is a congomlerate, they have 5 division (Pictures, Music, Financial services, Consumer products and professional services).  Last year of those 5 divisons all 5 are profitable on an operating income basis.  On a net income basis 3 of the 5 were profitable (Pictures, Music and Financial services).  For this year that ends in March, the same thing is likely to happen, profitable on 3, losses on two.  Their TV business has lost about 18 billion dollars since 2004 and is the biggest driver of their net income losses, second most likely being the Yen's strength.  Outside of 2006 and 2007, the playstation division contributes little when it comes to losses or gains to overall revenue and profits (losses), their income is in line other division at the end of the year

Your talking as if they are all different companies which is just wrong....

You do realise most companies of that nature have seperate "divisions" within their structure? Microsoft, Samsung, Toshiba, LG etc etc feck even Apple have "divisions". It is the way most companies work.

In those "divisions" some areas will do better then others. Some will be profitable and some won't. But they are all one giant collective which makes up a companies income,outcome and profit/loss. If overall they make more then they lose = profit. They don't make any profit = loss.

You can try and wrap it up and say well the xyz division has made xyz amounts of money but it is irelivent. The collective totals are what determines how a company is doing and more importantly determines if it will flourish or founder.

Right now Sony is "BLEADING" money. They as a COLLECTIVE are losing nearly $2m every single day. Do you really think when they go into their shareholders meetings and go

"Hey guys! Your be pleased to hear our amazing calculator making division is making 200% profit!! We now sell 10 calculators per year! woot!

But yeah our tv division is losing us $2b a year...... BUT our calculator division is going great!!"

Because that is some fantasy land shit right there.

Their totals determine what they can and can't do. And right now losing as much money as they are they cannot afford to lose anymore money. If you think they can drop the Vita under a month of release and make profit then I think you must be off your rocker. Because if that was the case then why didn't Sony start at a lower number if they had room to be around that price? Here in UK it cost £220 for the wifi version, no game or memory card. Why didn't they say start at £199 with a game and with a card? Wouldn't that have made it more competative and wouldn't it have maybe given them a higher opening week which in turn would of created "positive" news?

But ok ignore that. Here is another one for you.

If Sony are not in financial difficulty as you claim, and can "afford a price cut" then why have they been downgraded by the credit organisations? And why have 500 stock index analysts such as S&P put them in the "poor" forecast bracket? Going so far as to imply they could be downgraded further soon

"We base the negative outlook on the long-term corporate credit rating on our expectation that we could lower the ratings further if we see no meaningful sign of recovery in Sony's earnings within six to 12 months"

Do you even know what that means? It means it becomes harder for Sony to borrow money. And when they do it will be at a lot higher interest to offset the "risk".

The real question is "is Sony making profit on the Vita?". We don't know. But we can assume that maybe they are making profit at the current price. Would Sony "risk" putting that into more losses by dropping the price? When credit groups are threatening to pull the plug? No.

Sony as a company will be trying to cut costs and stop that "bleading" of money. They will not be in a rush to add to it. Because if they do it will go one way and one way only. They are on the stock exchange and right now in 3 years their shares have falled from 50+ to below 15.

But maybe you should go into one of their shareholder meetings and tell them not to worry as the calculator division is posting  profit ;)