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Forums - Sony - Seeing the good in the bad?

CaptainObvious on 30 June 2011
Dodece said:

There is no question that Sony is suffering badly. With natural disasters, manmade disasters, and cut throat competiton hitting the bottom line at Sony. It isn't all that shocking that the stock has plummeted over six dollars in the past few months. Investor confidence has been severely shaken. This could mean that there is the potential for another asset sell off in the near future. To return the company to a profitable state. Well at least that is what 24/7 Wall St. thinks about this situation. They recently released their top ten list of brands that will disappear this year, and Sony Pictures is right there in the number one position. They are betting that Sony is going to sell, and bring in some needed cash.

Which brings me to seeing the good in a bad situation. Having to sell off chunks of a company is always a bad sign. However when something is sold there is a lot of something gained. That being a good amount of discretionary income. Which can be used to reinvest into electronics development. There is some precedent for Sony doing this historically, and needless to say the PS3 has been a major beneficiary of sell off booty. So that brings me to a quandry about if there is a selloff, and Sony pours most of the money into the gaming. Where would that money most likely be spent.

Lets say that for the sake of debate that Sony sells off Sony Entertainment a couple months from now, and Sony Computer Entertainment gets a two billion dollar allowance to spend on their product line. They can spend that money any way they like on any product they like. Were you them what would you spend that money on, and be mindful this isn't about how to win a ficticious console war. This is about making a division healthier so it can make more money for the parent company.

Please do not attack the premise this is purely theoretical, and it isn't even remotely out of the realm of possibility anyway. Sony sells off a number of assets just about every year. So it isn't even out of character for the company. Just share your ideas as to what would be the best use of a two billion dollar windfall, and please back up your idea with some kind of explanation. I kind of want to see where the thinking is leaning, and here is a link to the inspiration for this thread.

http://247wallst.com/2011/06/22/247-wall-st-ten-brands-that-will-disappear-in-2012/2/


You always do go around Sony thread's hating on Sony and that got me thinking..................I think you hate Sony!



Anyone who's breaking the law is obvious a criminal.

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mibuokami on 30 June 2011
Dodece said:
@miboukami

Sony is responsible to its share holders, and as we all know investors aren't necessarily long term thinkers. When the value of their stock falls it is their bottom line that is impacted, and they do not necessarily have the luxury to simply wait troubles out. So if anyone is going to issue anything like a mandate it will be them if they begin to dump their stock management may have to sell off assets to reverse the overall financial perception of the company.

The gaming division being profitable right now is to be expected. Now if Sony gaming weren't making money at this point. I would argue vehemently that Sony should cut its losses and sell the division, or leave the hardware market, and become solely a game developer. With no large hardware introduction costs, and with fifty million consumers buying games that provide licensing fees to Sony. There is absolutely no excuse to not be profitable. This is simply the golden period during a consoles life. This is where they should be making good money.

That however is not the issue. The measure of the division is how it fairs in the upcoming launch cycles. That is the period of time where risk is highest, and profit is at its lowest. Your arguing that the boxer that just lost a round is in good shape, because he is sitting in his corner. Well obviously he will be doing well if only, because nobody is punching him in the face. Even though Sony is getting a breather it doesn't change the fact that it needs to find a way to win the next round, or at least avoid getting knocked out. Sony spent a lot of this generation on the ropes, and some better conditioning before the next round can only be a good thing.

Yes better condition is fine, but R & D investment for the PS3 will NEVER be repeated by Sony again. I still feel that despite their current condition, Sony is on the right path and the additional fund is no neccessary for progress.

The board is still 100% behind the CEO and despite the pummeling at the stock market, there hasn't been a huge disapproval by invester on the direction Sony is heading, only unhappy comment on its current condition. 1 investor has called for Stringer's resignation, but the motion isn't even being considered. So long as shareholders do not pick up the pitchfork there is no immediate alarm of a massive sell off.




o_O.Q on 01 July 2011
mibuokami said:
Dodece said:
@miboukami

Sony is responsible to its share holders, and as we all know investors aren't necessarily long term thinkers. When the value of their stock falls it is their bottom line that is impacted, and they do not necessarily have the luxury to simply wait troubles out. So if anyone is going to issue anything like a mandate it will be them if they begin to dump their stock management may have to sell off assets to reverse the overall financial perception of the company.

The gaming division being profitable right now is to be expected. Now if Sony gaming weren't making money at this point. I would argue vehemently that Sony should cut its losses and sell the division, or leave the hardware market, and become solely a game developer. With no large hardware introduction costs, and with fifty million consumers buying games that provide licensing fees to Sony. There is absolutely no excuse to not be profitable. This is simply the golden period during a consoles life. This is where they should be making good money.

That however is not the issue. The measure of the division is how it fairs in the upcoming launch cycles. That is the period of time where risk is highest, and profit is at its lowest. Your arguing that the boxer that just lost a round is in good shape, because he is sitting in his corner. Well obviously he will be doing well if only, because nobody is punching him in the face. Even though Sony is getting a breather it doesn't change the fact that it needs to find a way to win the next round, or at least avoid getting knocked out. Sony spent a lot of this generation on the ropes, and some better conditioning before the next round can only be a good thing.

Yes better condition is fine, but R & D investment for the PS3 will NEVER be repeated by Sony again. I still feel that despite their current condition, Sony is on the right path and the additional fund is no neccessary for progress.

The board is still 100% behind the CEO and despite the pummeling at the stock market, there hasn't been a huge disapproval by invester on the direction Sony is heading, only unhappy comment on its current condition. 1 investor has called for Stringer's resignation, but the motion isn't even being considered. So long as shareholders do not pick up the pitchfork there is no immediate alarm of a massive sell off.

nah you're doing it wrong i guess what dodece wants to hear is that sony can only do well with a console if they make a huge investment on it, but obviously since that isn't possible for them right now that they're doomed.... its funny though that nintendos stock has dropped lower in comparison and investors seem generally displeased with their new focus yet theres no discussion on that 



Rainbird on 01 July 2011
Dodece said:
In regards to Sony Online Entertainment. I strongly agree with your sentiments about new blood being seriously needed. The problem goes beyond poor acquisitions which is almost always a question of plundering studios that are basically roadkill. The management is either treated with indifference, or outright disdain due to its conduct. They have alienated a legion of gamers in their core market. So it makes the concept of integration almost a case of poisoning the waters. I am constantly dumbfounded why Sony hasn't already canned the management given that it would actually generate positive public feedback. Just canning the management would likely stimulate a jump in profits. Anyway they need to restore the reputation before integration becomes a positive, and the only way that reputation will be restored is for the developer to put forward at least one good massive title into the market.

Agreed, and I think you're right about changing things before they enter WWS. They shouldn't be allowed to have any negative influence there.



mibuokami on 01 July 2011
o_O.Q said:
mibuokami said:
Dodece said:
@miboukami

Sony is responsible to its share holders, and as we all know investors aren't necessarily long term thinkers. When the value of their stock falls it is their bottom line that is impacted, and they do not necessarily have the luxury to simply wait troubles out. So if anyone is going to issue anything like a mandate it will be them if they begin to dump their stock management may have to sell off assets to reverse the overall financial perception of the company.

The gaming division being profitable right now is to be expected. Now if Sony gaming weren't making money at this point. I would argue vehemently that Sony should cut its losses and sell the division, or leave the hardware market, and become solely a game developer. With no large hardware introduction costs, and with fifty million consumers buying games that provide licensing fees to Sony. There is absolutely no excuse to not be profitable. This is simply the golden period during a consoles life. This is where they should be making good money.

That however is not the issue. The measure of the division is how it fairs in the upcoming launch cycles. That is the period of time where risk is highest, and profit is at its lowest. Your arguing that the boxer that just lost a round is in good shape, because he is sitting in his corner. Well obviously he will be doing well if only, because nobody is punching him in the face. Even though Sony is getting a breather it doesn't change the fact that it needs to find a way to win the next round, or at least avoid getting knocked out. Sony spent a lot of this generation on the ropes, and some better conditioning before the next round can only be a good thing.

Yes better condition is fine, but R & D investment for the PS3 will NEVER be repeated by Sony again. I still feel that despite their current condition, Sony is on the right path and the additional fund is no neccessary for progress.

The board is still 100% behind the CEO and despite the pummeling at the stock market, there hasn't been a huge disapproval by invester on the direction Sony is heading, only unhappy comment on its current condition. 1 investor has called for Stringer's resignation, but the motion isn't even being considered. So long as shareholders do not pick up the pitchfork there is no immediate alarm of a massive sell off.

nah you're doing it wrong i guess what dodece wants to hear is that sony can only do well with a console if they make a huge investment on it, but obviously since that isn't possible for them right now that they're doomed.... its funny though that nintendos stock has dropped lower in comparison and investors seem generally displeased with their new focus yet theres no discussion on that 

I think I must be a bit slow but why would that be the case? Nintendo and apple are clear example of investment =/= profit. The former is a shinning example of how innovation can bring profit and the latter is Sony's goal: an evolutionary move from Product to Services which most electronic company are already in the process of enacting. Both of these example are acheived via smart thinking and redistribution of resources, not chucking money are a problem until it is fixed.




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ctalkeb on 01 July 2011

Well, there is at least one problem with this thread, which is that Sony doesn't need cash resources:

http://www.bloomberg.com/news/2011-05-30/sony-leads-japan-inc-circling-takeovers-with-2-4-trillion-cash-real-m-a.html

The idea that Sony should sell their movie business seems to stem more from a need to see them consolidate their business, or at least to do something. I think it's a bad idea.

What they need to do is to invest in the Vita becoming a success, but perhaps more importantly, to revitalize their TV business. Neither can be done simply by, to quote someone else in this thread, "throwing money at it".

(As for the suggestion at the shareholder's meeting that Stringer should step down: no one is taking that seriously, unless they know nothing about the nature of meetings like that.)



mibuokami on 01 July 2011
ctalkeb said:
Well, there is at least one problem with this thread, which is that Sony doesn't need cash resources:

http://www.bloomberg.com/news/2011-05-30/sony-leads-japan-inc-circling-takeovers-with-2-4-trillion-cash-real-m-a.html

The idea that Sony should sell their movie business seems to stem more from a need to see them consolidate their business, or at least to do something. I think it's a bad idea.

What they need to do is to invest in the Vita becoming a success, but perhaps more importantly, to revitalize their TV business. Neither can be done simply by, to quote someone else in this thread, "throwing money at it".

(As for the suggestion at the shareholder's meeting that Stringer should step down: no one is taking that seriously, unless they know nothing about the nature of meetings like that.)

This is my point exactly! There is no liquidity issue with Sony! And there is no serious doubt in management, especially with improved market share ever since Stringer took over in the mobile, gaming and TV portfolio. The only reason TV hasn't been as profitable is the strong yen and weak dollar going aganist export, which again would have been worse if TV manufactoring had stuck to nealy 100% made in Japan rather than outsourcing.

There is a big difference between Sony and some other struggling company such as Eidos; Sony has capital.

I see not reason why Sony needs to sell off their motion picture studio because 'they're hit bad' and I see no reason why they would need to inject 2 billion dollar into gaming (far too much). Their issue has always been poorly planned out marketing. Extra funding is obviously not a bad thing but what they needs above that is strategy.




mchaza on 01 July 2011

well selling off sony pictures to pay off the debt computer entertainment made wouldn't be that bad of a move considering that computer entertainment division of very profitable last year.

Basically the thing sony has to do move away from being the Upmarket High quality maker to being the Budget Good-High Quality maker. SONY needs to make cheap affordable products for the mass market but retain alot of the quality the SONY brand brings.

But the main thing sony has to do is innovate in mass market appeal electronics. for gamers we need SONY to be back in the black because we need them pumping money into there computer entertainment business.



Of Course That's Just My Opinion, I Could Be Wrong