Squilliam said:
MikeB said:
@ BengaBenga
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.
I don't think this has anything to do with it. If Sony sold more PS3s their investment losses would have been greater.
But I think Sony's upper management must have been shocked by Ken Kutaragi's vision for the PS3. He and his team made decisions which are great from a technology perspective but imposes great financial challenges for the short to mid run. Kudos to him though, else the PS3 would have been a far less interesting long term product with regard to potentials. Sony upper management would have focussed too much on short term advantages to please shareholders.
But everything is meanwhile under control, Sony's profits overall tripled and Sony's gaming devision is set to make a profit this year. It will take many years though to recoup all the investments poured into the product.
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No. The PS3 IS a failure. A fantastic failure. 3 billion in the hole and they don't really have much to show for it. Actually I would put the price of that failure at between 5-7 billion dollars. Thats the difference between a successful PS3 and an unsuccessful PS3. Thats the opportunity cost factored in as well. Face it, it was a terrible design, they screwed up worse than Microsoft did! 70% market share - 23%, Billions in profit - Billions in losses.
Nintendo >>>>>>>>>> Microsoft >>>>> Sony as far as intelligent business decisions go.
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Its actually worse than that ... The PS3 put the division $3 Billion and was one of the major factors to (dramatically) lowering the profitability of the Division for the two years leading up to its launch; that should work out to being close to a $5 Billion expense, and if the product was successful they should be able to make a couple billion dollars and fund the research and development of their follow up console.
