At what level does the Vita become a success?

[JWeinCom]

DucksUnlimited said:

JWeinCom said:

DucksUnlimited said:

benao87 said:

DucksUnlimited said:

Those things aren't mutually exclusive though. They could have created the Vita AND been involved in other ventures if they so wished. The entire point of oppertunity cost is that you only have a set amount of resources, which is not the case in this scenario. 

 

The childish insults are uneccessary and aren't doing your argument any favors.

I'm afraid that you do not understand the concept of opportunity cost. They are surely getting indirect benefits from the PSV venture, however that's not the point.

I apologize if you found the last part as an insult, it was merely to illustrate that you are ignoring a lot of important stuff. Look, I'm not here to prove you wrong, as this is supposed to be a subjective matter. For all that I care, Sony themselves have known that PSV won't turn profit, and they are just trying to pump some studios to make better relationships for the PS4, I don't know, and frankly I don't care. But if you are taking profit as a measure for success you will need to take a lot of stuff into consideration, and $1 is not a success.

Bolded: Care to illistrate how, rather than just making a baseless claim? The definition is "the loss of potential gain from other alternatives when one alternative is chosen." But the other "alternatives" you listed are not alternatives to the Vita, as they could have easily been implemented in conjunction with it. Sony won't have lost anything with the Vita if it turns a profit because Sony didn't invest into it in place of something else.

I like that you state that this is a subjective matter, then immediately follow that by making the objective claim that a $1 profit is not a success. In fact, the notion that you even started trying to persuade me otherwise on what you yourself consider a matter of opinion is very funny.

No, the fact that a one dollar profit is not a success is 100% fact.  If Sony invested that money into ANY interest bearing account, or investing in government bonds or something, they'd make significantly more money.  That means they could make more than a dollar by DOING NOTHING.  So, by investing money, time and resources into the Vita, they make less than they could have made by doing nothing.

There was another option they had besides the Vita (investing money in an interest bearing account) that made more out of the money than the Vita.  Therefore, it was a bad investment and unsuccessful.  And putting the money in a bank (or the corporate equivalent of that) isn't the only thing they could have done.  Unless Sony is the world's most efficient company (they aren't) there are bound to be projects that were not funded because of the Vita.  I don't know where you got the idea that Sony has enough money to do everything they want to do, but they don't.  No company does.  

They could have put money into an interest bearing account and still made the Vita. That fact doesn't imply that I think they have enough money to do everything. Thanks for putting words in my mouth again though.

 

You're just repeating the same thing over and over without demonstrating that the Vita prevented Sony from doing any of those things that would make them more money in this "$1" scenario. Until you've proven that to be the case, your argument is pointless.

Ok.  So, here are two scenarious.  Sony has 105 million dollars dollars to spend, and the Vita costs 5 million dollar to make and support for 5 years.  To make things simple, the interest rate at banks is 100% per year.  These figures are ridiculous, but they make the math easy and don't change the point of the example.

Scenario A)  Sony invests 5 million in the Vita.  They take the other 100 million dollars in the bank .  They make 500 million dollars in profit on the money they put in the bank.  They make $1 dollar on the Vita.  At the end of the five year period, Sony has $605,000,001.  

Scenario B) Sony invests 0 dollars in the Vita, and puts 105 million dollars in the bank.  At the end of five years, Sony has $625 million dollars.

Ok, so I'm sure we could agree that 625 million dollars is more than 600 million and one dollars.  So clearly, option A was a better move.  Therefore, investing in the Vita was a bad decision.

The difference in the two figures is how Sony invests the Vita money.  It doesn't matter that Sony can also do other things.  Let's focus solely on the Vita money.  Sony can only use that money for one thing at a time.  They can either invest $5 million dollars in the Vita, or they could invest $5 million dollars in the bank.  They can't invest the same $5 million dollars in both the Vita and the bank.  It's one or the other.  Those two possibilities are mutually exclusive.

If Sony invests that $5 million dollars in the bank, they will earn $25 million dollars.  If they don't invest that mone in the bank, they will not earn $25 million dollars.  Those two possibilities are again, mutually exclusive.  It doesn't matter what Sony does in conjunction with the Vita.  Whatever else is going on in Sony's as a whole is irrelevant. They spent $5 million dollars on the Vita, and by spending THAT 5 million dollars in the Vita instead of putting it in the bank, they sacrificed 20 million dollars.

To make things even more simple, lets say you ten dollar bills, and there are two magic boxes in front of you.  If you put your money in box A, it will multiply into three dollars.  If you put it in box B it will multiply into two dollars.  Once you use a dollar, you can not use it again or any of the copies made of it.

So, we could agree that putting a dollar in box B is a bad decision right?  It doesn't matter that you could still put 9 other dollars in Box A and also put one in box B.  The point is by putting the dollar in box B you're not getting the maximum value on that dollar.

I think that's as clear as I could make it.