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BengaBenga on 21 June 2008
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NJ5 said:
BengaBenga said:

That's why companies develop strategies. Usually you have to choose. In this case it's Profit vs Marketshare/Brandname.
I'm pretty sure Sony overestimated the PlayStation brandname. When you have two consoles selling over 100 million and all of a sudden something called Wii (for $&^%& sake) takes your crown must have been an eye-opener.

So it looks like Sony's strategy is profitability. Of course they have taken into acount long-term prospects etc. but they probably feel that enough is enough.
Again: Shareholders don't like losses. They don't care about the PlayStation brand or videogames. They want the company to be as efficient as possible. If they have to give up market share on PS3 they don't care. Really.

 

It's not that simple BengaBenga... After all, we could have used the same argument last year to justify the impossibility of huge price cuts, which ended up happening anyway much to my surprise.

Shareholders do put up with massive losses of money, as long as the environment (which frankly isn't favorable now; struggling economies and all) and the company's explanations justify it...

Having said that, I have no idea whether shareholders would put up with another big price cut. If Sony buttered them up real well, saying they need the market share to prepare for the next generation, maybe that would do the trick?

 

 

Last year there was a different strategy: Lose on hardware, gain on software. So last year the comany agreed on pricecuts because it fitted the business plan.
In the latest earnings release and these comments from Stringer meke it clear that the strategy for SCE has changed. The shareholders expect from the company to stick to that.