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Forums - Sony - Sony downgraded to BBB- by Fitch

KillerMan on 15 December 2011

I think the best comparable company for Sony is Samsung. Both make pretty much everything that uses electricity but the other one is losing marketshare all the time and losing money when the other is gaining marketshare in pretty much every business they are involved and make massive profits. Problem for Sony is not quality. It's that somehow everything they make is so damn expensive. Don't know where the fault lies. Definitely strong yen has big influense though. Really X360 and PS3 are also prime examples of this. Besides blu-ray what huge technologial differences there are between these to consoles? Still X360 is profitable at 199$ price point when Sony has hard time to break even with 249$ PS3.



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VGKing on 15 December 2011
Seece said:
Nintendo cutting the 3DS's price hasn't made it easy for Sony and the Vita, not only is it going to be much tougher for Vita to succeed, but if it doesn't do well in its first year (and it likely won't, but that's fine because no consoles first year does amazing, not sure why investors and even Nintendo didn't look at past launches ...) then investors will be wondering why they're not making drastic measures like Nintendo. Of course they'll be wrong to think so, Sony would be doing the right thing sitting on the price, especially if you can't afford to cut. But could strong demand from investors asking for Sony to do something, push Sony into cutting the Vita down enough so it's in the red? Is Vita going to be making much money anyway, does anyone have any figures on that?

I still don't believe Sony is acting like a company that is in the state it is. They seem to be behaving somewhat indenial.


I think they are selling each Vita at a loss. So a price cut within the first year is out of the question.



gamelover2000 on 15 December 2011
Squilliam said:
So now they are at risk of being downgraded to junk status. I don't understand why they cut the price of the PS3 in the context of such losses.


Because the major losses are not related to the PS3.

 

Neither is BBB a junk status.. it's nothing to be proud of but nowadays credit ratings mean very little.. they were never really relevant for anything but countries



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Galaki on 15 December 2011
gamelover2000 said:

Neither is BBB a junk status.. it's nothing to be proud of but nowadays credit ratings mean very little.. they were never really relevant for anything but countries

For one, the rating affects the interest rate.



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DirtyP2002 on 15 December 2011
nikosx said:
DirtyP2002 said:

I don't get how a software company, basically new to the entertainment industry gets more content than an entertainment company just with some easy partnerships with content providers.

Because the software company doesn't make TV's. For Sony and other TV manufacturers there are Smart TVs. 


This is exactly what I was talking about. Sony products don't really benefit each other. So according to your logic, PS3 does not need the content, because it is available for Smart TVs already.

...



Imagine not having GamePass on your console...

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DirtyP2002 on 15 December 2011
gamelover2000 said:
Squilliam said:
So now they are at risk of being downgraded to junk status. I don't understand why they cut the price of the PS3 in the context of such losses.


Because the major losses are not related to the PS3.

 

Neither is BBB a junk status.. it's nothing to be proud of but nowadays credit ratings mean very little.. they were never really relevant for anything but countries

hahahahahaha

ratings do not matter? Awesome. I worked in a bank for 3 years and believe me. They do matter. Big time.



Imagine not having GamePass on your console...

Kynes on 15 December 2011
gamelover2000 said:
Squilliam said:
So now they are at risk of being downgraded to junk status. I don't understand why they cut the price of the PS3 in the context of such losses.


Because the major losses are not related to the PS3.

 

Neither is BBB a junk status.. it's nothing to be proud of but nowadays credit ratings mean very little.. they were never really relevant for anything but countries


If they wouldn't have lost so much money at the first years of the PS3 existence, they would have much less debt now. The problem aren't the losses per se, the problem is the great debt and rising financial costs. Regarding your BBB comment, I'm sure that Sony board of directors don't think the same. Most funds request A or better status to buy your bonds.



Acevil on 15 December 2011
Kynes said:
gamelover2000 said:
Squilliam said:
So now they are at risk of being downgraded to junk status. I don't understand why they cut the price of the PS3 in the context of such losses.


Because the major losses are not related to the PS3.

 

Neither is BBB a junk status.. it's nothing to be proud of but nowadays credit ratings mean very little.. they were never really relevant for anything but countries


If they wouldn't have lost so much money at the first years of the PS3 existence, they would have much less debt now. The problem aren't the losses per se, the problem is the great debt and rising financial costs. Regarding your BBB comment, I'm sure that Sony board of directors don't think the same. Most funds request A or better status to buy your bonds.

Not only that, if sony keeps getting downgraded, if anyone is willing to invest, it would be at much higher interest rate level, due to the increase of the risk to default. 



 

nikosx on 15 December 2011
DirtyP2002 said:
nikosx said:
DirtyP2002 said:

I don't get how a software company, basically new to the entertainment industry gets more content than an entertainment company just with some easy partnerships with content providers.

Because the software company doesn't make TV's. For Sony and other TV manufacturers there are Smart TVs. 


This is exactly what I was talking about. Sony products don't really benefit each other. So according to your logic, PS3 does not need the content, because it is available for Smart TVs already.

...

No, I think Sony wants people to buy new Sony Smart TVs  so they don't push those services on the PS3  like MS does for X360. 



XanderZane on 15 December 2011
maverick40 said:
aw damn, what does this mean for Sony now kowen?


Layoffs, lots of layoffs. lol!! I'm a bit surprised as Sony had been profitting the las couple of quarters I thought. Now this huge loss and going to hurt their last quarter of 2011.



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