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Forums - Sony Discussion - Is the PS3 a success?

 

Well, answer the damn question.

Yes, it is. 567 61.63%
 
No, it isn't. 292 31.74%
 
I like it when you talk rough, d21! 61 6.63%
 
Total:920
Alby_da_Wolf said:
crissindahouse said:
Alby_da_Wolf said:

[...]

Yes, strong Yen and tsunami are huge problems. Luckily, though PS3 isn't losing mone anymore, but the "Business Segment" including it and other products, like TVs, does, and it loses a lot of money. Sony stated PS3 HW stopped losing money in Spring 2010 (WW average, it did it sooner in EU and later in USA), but the losses accumulated until then are huge and after the last price cut profit margin must be again very thin. PS3 previous losses are now blurred in the overall bigger one of "Consumer Products and Services", the "Business Segment" of which "Games", that includes PS3, gaming peripherals, games development and publishing, etc, is a "Product Category" (and not a Division anymore if Sony ever called a Division with this name, while smaller Business Segments can be equivalent to single Product Categories and larger ones, like CPS, include more Product Categories). Currently PS3 isn't losing, despite the strong Yen, but weak Dollar and Euro and price cut reduced its revenue, and obviously profit too. Sony anyway clearly admits strong Yen is jointly responsible with many other factors of the huge current losses of CPS business segment. In particular, strong Yen and fierce competition forced Sony to cut TV prices below profitability.

http://www.sony.net/SonyInfo/IR/financial/fr/11q2_sony.pdf

The biggest trouble for PS3 is that now it must not just help recouping its past losses, but that with the crisis of Sony's TV business, it must help balancing the other products losses too, but as HW price needs to stay competitive, its profit margin won't ever be higher than a few tens $ and Sony will have to keep on counting mainly on SW profits.

It's quite obvious next gen Sony will have to absolutely launch at breaking even or at worst small loss price, HW becoming profitable later than two years after launch is clearly unsustainable for more than a gen, while the razor-blade model can give huge profits only once the installed base is huge too (edit: and if the "razor" losses are a lot lower than "blades" profits)


do you have numbers that they made money with the ps3 in 2011? i know they started making money in 2010 but like i said i don't know if this will be the case in 2011 with all the hacker problems and other shit.

not that i don't believe it when you know it but i didn't read anything about the ps3 win/loss situation for 2011. i just heard soomething about the hacking costs and tsunami costs but tsunami was for whole sony no clue if this was bad for ps3 as well.

Not profits and losses numbers, because in the financial statement they declare just sales for the single Product Categories, while they group profits and losses in different tables of the balance sheets, but in the financial statement Sony clearly states that:

- floods harmed mainly CPS and PDS income, as production in some plants was temporarily halted (page 10 of the PDF I linked)

- unfavourable exchange rates affected revenue of many Business Segments (this is stated in various pages in different contexts)

And this confirms what both you and I wrote and at least agree on a minimum basis, that those factors negatively affected the whole Sony business overall, independently from what's losing or just profiting less.

Specifically regarding CPS Segment (the one including Games Product Category):

- Sales decreased 12.3% year-on-year (a 7% decrease on a local currency basis) to 779.7 billion yen (10,126 million
U.S. dollars). Sales to outside customers decreased 12.4% year-on-year. This was primarily due to a decrease in
LCD television sales, reflecting price declines due mainly to deterioration in market conditions in the U.S. and
Europe and unfavorable foreign exchange rates, lower PC sales reflecting price competition, a decline in sales of
the game business, reflecting a strategic price reduction of PlayStation®3 hardware in advance of the year-end
holiday season, as well as a decrease in sales of compact digital cameras resulting from lower unit sales due to a
slowdown in market growth and unfavorable foreign exchange rates.
(page 3)

- Operating loss of 34.6 billion yen (449 million U.S. dollars) was recorded compared to income of 1.0 billion yen
in the same quarter of the previous fiscal year. This was primarily due to deterioration in the cost of sales ratio
and a decrease in gross profit due to lower sales, partially offset by a decrease in restructuring charges. Categories
contributing to the deterioration in operating results (excluding restructuring charges) include LCD televisions,
reflecting a decline in unit selling prices that exceeded cost and expense reductions, the game business and PCs,
reflecting lower sales as noted above. Operating loss included additional LCD panel related expenses resulting
from low capacity utilization of S-LCD as well as the above-noted asset impairment of 8.6 billion yen (112 million
U.S. dollars) associated with LCD television assets.
(page 4)

In the quoted parts you can read that all the main products, LCDs, Games, compact digital cameras and PCs contributed in general to bad results due to lower sales (meant as lower revenue from sales, the sheets don't mention units sold, just money), but only for LCDs it's specified that they were forced to cut prices below profitability, so generating losses, while it clearly specifies that PS3 price cut caused lower sales, it doesn't say losses. In the second paragraph quoted it says profits decreased (obviously it must be referred to products that previously profited and now too, but less than before, you don't just say "profits decreased" if they were totally erased and turned to losses too), while only for LCDs it explicitly states they are losing.

Anyway, as I wrote, the fact that PS3 shouldn't be losing, but just profiting less, doesn't deny the fact that Games Category is surely suffering at least indirectly, as it belongs to a Business Segment that is suffering heavy losses. Whatever the cause, not being independent from the losing Categories, Games is in some troubles. This said, Sony must push them and all the other products that at least aren't losing, as much as possible to balance the losses caused by LCDs.

yeah ok thx for your answer. do you think they will talk about their win/loss situation for ps3 in 2011 or fiscal year 2011 anytime? or just for the whole segment? maybe april or may for fiscal year 2011?



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Sony intended to sell the most hardware. I know they intended that much. I don't know if they intended to make a profit, but they probably intended to make less of a loss.

So no, they did not succeed with the PS3.



An actual girl posted in this thread... And you guys all missed that... I'm taking my hat off for Mr d21lewis.. Once again he proves his awesomeness by getting done what many of us can't do: having a girl post on vgchartz.. Now that is what I call à succes!



 

Face the future.. Gamecenter ID: nikkom_nl (oh no he didn't!!) 

Just a petition... Since the beginning of this generation, most people defended Sony's strategy with the PS3 based on future revenues of Blu-Ray royalties. Can someone please provide me any numbers of those royalties due to Blu-Ray?



When you compare it to its past versions. No its not. But in terms of innovations, yes.



Yay!!!

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No it's not a success. It lost too much money to ever be labelled a success really. There's only 2 reasons the doom and gloom predicted regarding the PS3 didn't come true, Sony did a blinder on shutting their mouth and stop spouting crap disguised as facts in their PR statements and the 360 had it's hideous hardware failure issues. Had the 360 been reliable at launch the PS3 would have been stillborn.

For people saying there was just doom and gloom for no reason back in 2007/2008, I assure you there was every good reason. The console back then was overpriced, underpowered and it took a long time and many exclusives to try and sway that opinion. Both the PS3 and Sony deserved every thread wrote about them for their arrogance and thankfully they listened to devs, consumers, journalists and fixed the issues that people complained most about.

P.S. I don't think it was worth the hit Sony took to get Bluray in the PS3 but I certainly appreciate it now (although I'd have been just as happy for HD-DVD to have won tbh).



crissindahouse said:
Alby_da_Wolf said:
crissindahouse said:
Alby_da_Wolf said:

[...]

Yes, strong Yen and tsunami are huge problems. Luckily, though PS3 isn't losing mone anymore, but the "Business Segment" including it and other products, like TVs, does, and it loses a lot of money. Sony stated PS3 HW stopped losing money in Spring 2010 (WW average, it did it sooner in EU and later in USA), but the losses accumulated until then are huge and after the last price cut profit margin must be again very thin. PS3 previous losses are now blurred in the overall bigger one of "Consumer Products and Services", the "Business Segment" of which "Games", that includes PS3, gaming peripherals, games development and publishing, etc, is a "Product Category" (and not a Division anymore if Sony ever called a Division with this name, while smaller Business Segments can be equivalent to single Product Categories and larger ones, like CPS, include more Product Categories). Currently PS3 isn't losing, despite the strong Yen, but weak Dollar and Euro and price cut reduced its revenue, and obviously profit too. Sony anyway clearly admits strong Yen is jointly responsible with many other factors of the huge current losses of CPS business segment. In particular, strong Yen and fierce competition forced Sony to cut TV prices below profitability.

http://www.sony.net/SonyInfo/IR/financial/fr/11q2_sony.pdf

The biggest trouble for PS3 is that now it must not just help recouping its past losses, but that with the crisis of Sony's TV business, it must help balancing the other products losses too, but as HW price needs to stay competitive, its profit margin won't ever be higher than a few tens $ and Sony will have to keep on counting mainly on SW profits.

It's quite obvious next gen Sony will have to absolutely launch at breaking even or at worst small loss price, HW becoming profitable later than two years after launch is clearly unsustainable for more than a gen, while the razor-blade model can give huge profits only once the installed base is huge too (edit: and if the "razor" losses are a lot lower than "blades" profits)


do you have numbers that they made money with the ps3 in 2011? i know they started making money in 2010 but like i said i don't know if this will be the case in 2011 with all the hacker problems and other shit.

not that i don't believe it when you know it but i didn't read anything about the ps3 win/loss situation for 2011. i just heard soomething about the hacking costs and tsunami costs but tsunami was for whole sony no clue if this was bad for ps3 as well.

Not profits and losses numbers, because in the financial statement they declare just sales for the single Product Categories, while they group profits and losses in different tables of the balance sheets, but in the financial statement Sony clearly states that:

- floods harmed mainly CPS and PDS income, as production in some plants was temporarily halted (page 10 of the PDF I linked)

- unfavourable exchange rates affected revenue of many Business Segments (this is stated in various pages in different contexts)

And this confirms what both you and I wrote and at least agree on a minimum basis, that those factors negatively affected the whole Sony business overall, independently from what's losing or just profiting less.

Specifically regarding CPS Segment (the one including Games Product Category):

- Sales decreased 12.3% year-on-year (a 7% decrease on a local currency basis) to 779.7 billion yen (10,126 million
U.S. dollars). Sales to outside customers decreased 12.4% year-on-year. This was primarily due to a decrease in
LCD television sales, reflecting price declines due mainly to deterioration in market conditions in the U.S. and
Europe and unfavorable foreign exchange rates, lower PC sales reflecting price competition, a decline in sales of
the game business, reflecting a strategic price reduction of PlayStation®3 hardware in advance of the year-end
holiday season, as well as a decrease in sales of compact digital cameras resulting from lower unit sales due to a
slowdown in market growth and unfavorable foreign exchange rates.
(page 3)

- Operating loss of 34.6 billion yen (449 million U.S. dollars) was recorded compared to income of 1.0 billion yen
in the same quarter of the previous fiscal year. This was primarily due to deterioration in the cost of sales ratio
and a decrease in gross profit due to lower sales, partially offset by a decrease in restructuring charges. Categories
contributing to the deterioration in operating results (excluding restructuring charges) include LCD televisions,
reflecting a decline in unit selling prices that exceeded cost and expense reductions, the game business and PCs,
reflecting lower sales as noted above. Operating loss included additional LCD panel related expenses resulting
from low capacity utilization of S-LCD as well as the above-noted asset impairment of 8.6 billion yen (112 million
U.S. dollars) associated with LCD television assets.
(page 4)

In the quoted parts you can read that all the main products, LCDs, Games, compact digital cameras and PCs contributed in general to bad results due to lower sales (meant as lower revenue from sales, the sheets don't mention units sold, just money), but only for LCDs it's specified that they were forced to cut prices below profitability, so generating losses, while it clearly specifies that PS3 price cut caused lower sales, it doesn't say losses. In the second paragraph quoted it says profits decreased (obviously it must be referred to products that previously profited and now too, but less than before, you don't just say "profits decreased" if they were totally erased and turned to losses too), while only for LCDs it explicitly states they are losing.

Anyway, as I wrote, the fact that PS3 shouldn't be losing, but just profiting less, doesn't deny the fact that Games Category is surely suffering at least indirectly, as it belongs to a Business Segment that is suffering heavy losses. Whatever the cause, not being independent from the losing Categories, Games is in some troubles. This said, Sony must push them and all the other products that at least aren't losing, as much as possible to balance the losses caused by LCDs.

yeah ok thx for your answer. do you think they will talk about their win/loss situation for ps3 in 2011 or fiscal year 2011 anytime? or just for the whole segment? maybe april or may for fiscal year 2011?

I guess just the whole segment: as long as the Business Segment is losing overall, although they can't lie in their official statements, they'll want to leave the negative things as blurred as possible. They probably thank all the Japanese gods, and the foreign ones too, that they had at least some partially positive things to say, but I'm sure that having to admit TVs, once probably their strongest product, are currently bleeding so much money to not only erase the profits of four other important Product Categories, but also turn the whole segment to loss, must be extremely painful. Besides this difficulty in financial "cosmetics" due to the current troubles, Product Categories are anyway not official divisions, but their purpose is just to explain better to investors  the details of the sales performances of the two biggest Business Segments (see the note at the bottom of page F-8 of the statement, page 20 of the PDF), so unless Sony explicitly states not only what's losing and what's profiting, but the exact figures too, profits and losses are reported only for the whole Business Segments, while for the single categories, just sales are explicitly stated.





Stwike him, Centuwion. Stwike him vewy wuffly! (Pontius Pilate, "Life of Brian")
A fart without stink is like a sky without stars.
TGS, Third Grade Shooter: brand new genre invented by Kevin Butler exclusively for Natal WiiToo Kinect. PEW! PEW-PEW-PEW! 
 


Kynes said:
Just a petition... Since the beginning of this generation, most people defended Sony's strategy with the PS3 based on future revenues of Blu-Ray royalties. Can someone please provide me any numbers of those royalties due to Blu-Ray?

Sony royalties on Blu Ray are quite a tiny fraction of the forfait fees the consortium receives on drives and discs, except in the cases it produces or publishes the contents or it licenses its specific implementations of the standards to 3rd parties. Sony sells its drives, blank discs and contents too and on them it profits obviously more, but royalties on the tech should be quite low. More than royalties, Blu Ray victory on HD-DVD avoided Sony and other HW companies to pay far higher royalties than Sony's share on BD, to Microsoft, as MS owns the most used implementation, based on Windows CE, of HD-DVD's interactive contents, while BD OTOH uses a Java derivative for them. About codecs, MS gets royalties when its codec for the VC-1 format is used, but alternative codecs can be used too, as the format itself isn't proprietary anymore, MS opened it to have it accepted by both BD and HD-DVD consortia.

Saying Sony gets much money from BD royalties is wrong, it gets money from its whole presence in the BD business, and having won the format war put Sony and the other producers of the winning format in a better situation than the losers, having drives and discs already in production when the war ended and not having to sell at a loss supplies of the losing stuff, but royalties from others are a tiny fraction of the profits..



Stwike him, Centuwion. Stwike him vewy wuffly! (Pontius Pilate, "Life of Brian")
A fart without stink is like a sky without stars.
TGS, Third Grade Shooter: brand new genre invented by Kevin Butler exclusively for Natal WiiToo Kinect. PEW! PEW-PEW-PEW! 
 


Alby_da_Wolf said:
Kynes said:
Just a petition... Since the beginning of this generation, most people defended Sony's strategy with the PS3 based on future revenues of Blu-Ray royalties. Can someone please provide me any numbers of those royalties due to Blu-Ray?

Sony royalties on Blu Ray are quite a tiny fraction of the forfait fees the consortium receives on drives and discs, except in the cases it produces or publishes the contents or it licenses its specific implementations of the standards to 3rd parties. Sony sells its drives, blank discs and contents too and on them it profits obviously more, but royalties on the tech should be quite low. More than royalties, Blu Ray victory on HD-DVD avoided Sony and other HW companies to pay far higher royalties than Sony's share on BD, to Microsoft, as MS owns the most used implementation, based on Windows CE, of HD-DVD's interactive contents, while BD OTOH uses a Java derivative for them. About codecs, MS gets royalties when its codec for the VC-1 format is used, but alternative codecs can be used too, as the format itself isn't proprietary anymore, MS opened it to have it accepted by both BD and HD-DVD consortia.

Saying Sony gets much money from BD royalties is wrong, it gets money from its whole presence in the BD business, and having won the format war put Sony and the other producers of the winning format in a better situation than the losers, having drives and discs already in production when the war ended and not having to sell at a loss supplies of the losing stuff, but royalties from others are a tiny fraction of the profits..

So they lost tons of money to not pay a small royaltie to MS, Toshiba and NEC. I don't think it's a very clever strategy.



I'll second what Jay520 said.