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Forums - Sony Discussion - SONY rating cut again by S&P. *Update: Moodys follow suit.

CChaos on 16 October 2012
the2real4mafol said:

CChaos said:

They are actually a very big deal. Standard and Poor's, Moody's and Fitch Ratings are considered 'The Big Three', which are the three most prominent rating companies around. Basically, if they speak, others listen, because they are the ones who rate corporations and countries alike. When the ratings for those three go down, the interest rates on debt and borrowing costs rise, sometimes a great deal, and which means that the company in question will require more money to pay back the totals, because of those larger interest rates.

Basically, a company's credit rating isn't that much different than a normal person's. If you have a bad rating, you won't be able to manage some things (like buying a car or house on credit) and, when you do, they'll see you as higher risk and will make you pay back more because of that risk. Here's a link to explanations on credit ratings and how they work.

http://www.investopedia.com/articles/00/091800.asp#axzz29OgOtmIA

Same thing for a company, but instead of having to pay a few hundred dollars more per month on your mortgage, we're talking the realm of tens of billions of dollars. That usually means that return pay on the debt is billions as well when your credit rating is bad enough. Basically, it amounts to 'the lower your rating, the more of your profit you're paying into payments and interest on your debt'.

I've heard of S&P, moodys etc. and know what they did basically but just don't really see the point in their existence. It's make the competition between countries or companies even more unfair than it should do in my view, even if a company like sony is in bad shape financially, all they seem to do is, make it harder for a company like sony to recover, while say microsoft or apple continue to grow rapidly, as they get a big advantage from sony's weak position. In terms of countries, it's the same thing America and Europe get it easy, while Africa which was not given a chance is left poor and without investment. I guess I don't understand how the financial system works, but it don't seem to fair to me

Their existence is mostly for the sake of informing investors and lenders, after looking at all angles of a business, whether or not a corporation or business has some amount of risk in the investment and allowing them to compensate by way of increasing interest payments and what not. They exist as a method of scale for investors, basically.

However, it should be noted that it takes internal screw ups before credit ratings start falling. In Sony's case, they've been in the red on their TV business for eight straight years, they have no products at present or announced that are going to give them a real burst of energy into profitability and they having been slowly accruing a great deal of debt over the past ten years in comparison to their assets, amongst other things. Sort of the same reason the US got a credit downgrade by S&P because of their huge national debt and political paralysis or Greece and their multitude of long standing issues.

What it really amounts to is a judgment on 'Are you good for it?' when it comes to money. Equality would be for a perfect world, but in the eyes of the financial system, we're only as good as how good we are at keeping ourselves afloat.



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the2real4mafol on 16 October 2012
CChaos said:
the2real4mafol said:

CChaos said:

They are actually a very big deal. Standard and Poor's, Moody's and Fitch Ratings are considered 'The Big Three', which are the three most prominent rating companies around. Basically, if they speak, others listen, because they are the ones who rate corporations and countries alike. When the ratings for those three go down, the interest rates on debt and borrowing costs rise, sometimes a great deal, and which means that the company in question will require more money to pay back the totals, because of those larger interest rates.

Basically, a company's credit rating isn't that much different than a normal person's. If you have a bad rating, you won't be able to manage some things (like buying a car or house on credit) and, when you do, they'll see you as higher risk and will make you pay back more because of that risk. Here's a link to explanations on credit ratings and how they work.

http://www.investopedia.com/articles/00/091800.asp#axzz29OgOtmIA

Same thing for a company, but instead of having to pay a few hundred dollars more per month on your mortgage, we're talking the realm of tens of billions of dollars. That usually means that return pay on the debt is billions as well when your credit rating is bad enough. Basically, it amounts to 'the lower your rating, the more of your profit you're paying into payments and interest on your debt'.

I've heard of S&P, moodys etc. and know what they did basically but just don't really see the point in their existence. It's make the competition between countries or companies even more unfair than it should do in my view, even if a company like sony is in bad shape financially, all they seem to do is, make it harder for a company like sony to recover, while say microsoft or apple continue to grow rapidly, as they get a big advantage from sony's weak position. In terms of countries, it's the same thing America and Europe get it easy, while Africa which was not given a chance is left poor and without investment. I guess I don't understand how the financial system works, but it don't seem to fair to me

Their existence is mostly for the sake of informing investors and lenders, after looking at all angles of a business, whether or not a corporation or business has some amount of risk in the investment and allowing them to compensate by way of increasing interest payments and what not. They exist as a method of scale for investors, basically.

However, it should be noted that it takes internal screw ups before credit ratings start falling. In Sony's case, they've been in the red on their TV business for eight straight years, they have no products at present or announced that are going to give them a real burst of energy into profitability and they having been slowly accruing a great deal of debt over the past ten years in comparison to their assets, amongst other things. Sort of the same reason the US got a credit downgrade by S&P because of their huge national debt and political paralysis or Greece and their multitude of long standing issues.

What it really amounts to is a judgment on 'Are you good for it?' when it comes to money. Equality would be for a perfect world, but in the eyes of the financial system, we're only as good as how good we are at keeping ourselves afloat.

Thanks for clarifying. But how credible are these credit companies anyway? When China has it own rating company called Dagong

http://en.wikipedia.org/wiki/Dagong_Global_Credit_Rating

Who are based on the same rating scale as S&P, but give each company a different rating.

Dagong gave the USA an A, while S&P give them an AA+, I don't understand how that can be different between each rating company



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sales2099 on 16 October 2012
TheBioLover said:
sales2099 said:
maverick40 said:
sales2099 said:
VGKing said:
DOOOOOM!

I don't really give a f**k. They still seem to be pumping out great AAA games.
Vita is a different story though...

Ya you and all other PS3 fans dont give a f**k..........until they close a studio. Then its all "WTH happened?!?!!?" 

FYI.......the only AAA game they released this year was Journey.....and the dev announced they are going multiplat. Seems Sony couldnt afford to renew the exclusivity contract. 

Huh. 

Taking shite as usual. The contract with ThatGameCompany was up after Journey so they signed a 3 game contract with Giant Sparrow. Know your stuff before trying to belittle someone.

This was an old post. Just saying Sony COULD have renewed it if they wanted to. guess not. No more exclusive artsy PSN games, just saying. Your explanation doesnt change that fact


I don't know why people bother with you..........you're nothing but a 360 fanboy.

Doesnt take away the validity of my points.

A senile old man could say the world is round and despite his condition, hes still right. I am a fan (reported for calling me a fanboy), but my claims tend to be backed up or guesstimated based on relevant information.



Xbox: Best hardware, Game Pass best value, best BC, more 1st party genres and multiplayer titles. 

 

CChaos on 16 October 2012
the2real4mafol said:
CChaos said:

Their existence is mostly for the sake of informing investors and lenders, after looking at all angles of a business, whether or not a corporation or business has some amount of risk in the investment and allowing them to compensate by way of increasing interest payments and what not. They exist as a method of scale for investors, basically.

However, it should be noted that it takes internal screw ups before credit ratings start falling. In Sony's case, they've been in the red on their TV business for eight straight years, they have no products at present or announced that are going to give them a real burst of energy into profitability and they having been slowly accruing a great deal of debt over the past ten years in comparison to their assets, amongst other things. Sort of the same reason the US got a credit downgrade by S&P because of their huge national debt and political paralysis or Greece and their multitude of long standing issues.

What it really amounts to is a judgment on 'Are you good for it?' when it comes to money. Equality would be for a perfect world, but in the eyes of the financial system, we're only as good as how good we are at keeping ourselves afloat.

Thanks for clarifying. But how credible are these credit companies anyway? When China has it own rating company called Dagong

http://en.wikipedia.org/wiki/Dagong_Global_Credit_Rating

Who are based on the same rating scale as S&P, but give each company a different rating.

Dagong gave the USA an A, while S&P give them an AA+, I don't understand how that can be different between each rating company

No problem for the clarification! Far as I can tell, they're pretty credible because they use visible statistical analysis of movements by corporations and countries to make their judgments. In essence, they crunch the numbers and make decisions based off of those, as well as future prospects. However, reaction to said numbers varies depending on the individuals in each credit agency.

DaGong is an odd one. While the States and Europe has the Big Three, DaGong is a ratings agency based out of Beijing and is more or less used by the Chinese for the sake of its own ratings by economists and what not there. It's not recognized by the Securities and Exchange Commission (the US based investment and regulating group). It basically stands separate from the Big Three and other ratings agencies, but holds weight because it is basically China's rating agency and you can't really ignore that, considering China's place as the second largest economy and a growing power.



maverick40 on 18 October 2012
sales2099 said:
TheBioLover said:
sales2099 said:
maverick40 said:
sales2099 said:
VGKing said:
DOOOOOM!

I don't really give a f**k. They still seem to be pumping out great AAA games.
Vita is a different story though...

Ya you and all other PS3 fans dont give a f**k..........until they close a studio. Then its all "WTH happened?!?!!?" 

FYI.......the only AAA game they released this year was Journey.....and the dev announced they are going multiplat. Seems Sony couldnt afford to renew the exclusivity contract. 

Huh. 

Taking shite as usual. The contract with ThatGameCompany was up after Journey so they signed a 3 game contract with Giant Sparrow. Know your stuff before trying to belittle someone.

This was an old post. Just saying Sony COULD have renewed it if they wanted to. guess not. No more exclusive artsy PSN games, just saying. Your explanation doesnt change that fact


I don't know why people bother with you..........you're nothing but a 360 fanboy.

Doesnt take away the validity of my points.

A senile old man could say the world is round and despite his condition, hes still right. I am a fan (reported for calling me a fanboy), but my claims tend to be backed up or guesstimated based on relevant information.

Your claim is bullshit. You say Sony couldn't afford to to renew the contract with ThatGameCompany which is the most childish thing I have heard in ages. Your claim was not based on any relevant information in the slightest. Sony bought Gaikai for $300 million dollars this year and you say they couldn't afford to renew an exslusivity deal with a tiny independent developer.  

"No more exclusive artsy PSN games, just saying" As i said in my previous post, Sony have made a 3 game exclusive deal with Giant Sparrow. They have just released an "artsy" game called The Unfinished Swan which is getting a lot of praise from journalists. So yeah, let the exclusive Sony artsy games continue braaa.



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think-man on 18 October 2012

This makes me truly sad! I go out of my way to buy Sony products.



 

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sales2099 on 18 October 2012
maverick40 said:
sales2099 said:
TheBioLover said:
sales2099 said:
maverick40 said:
sales2099 said:
VGKing said:
DOOOOOM!

I don't really give a f**k. They still seem to be pumping out great AAA games.
Vita is a different story though...

Ya you and all other PS3 fans dont give a f**k..........until they close a studio. Then its all "WTH happened?!?!!?" 

FYI.......the only AAA game they released this year was Journey.....and the dev announced they are going multiplat. Seems Sony couldnt afford to renew the exclusivity contract. 

Huh. 

Taking shite as usual. The contract with ThatGameCompany was up after Journey so they signed a 3 game contract with Giant Sparrow. Know your stuff before trying to belittle someone.

This was an old post. Just saying Sony COULD have renewed it if they wanted to. guess not. No more exclusive artsy PSN games, just saying. Your explanation doesnt change that fact


I don't know why people bother with you..........you're nothing but a 360 fanboy.

Doesnt take away the validity of my points.

A senile old man could say the world is round and despite his condition, hes still right. I am a fan (reported for calling me a fanboy), but my claims tend to be backed up or guesstimated based on relevant information.

Your claim is bullshit. You say Sony couldn't afford to to renew the contract with ThatGameCompany which is the most childish thing I have heard in ages. Your claim was not based on any relevant information in the slightest. Sony bought Gaikai for $300 million dollars this year and you say they couldn't afford to renew an exslusivity deal with a tiny independent developer.  

"No more exclusive artsy PSN games, just saying" As i said in my previous post, Sony have made a 3 game exclusive deal with Giant Sparrow. They have just released an "artsy" game called The Unfinished Swan which is getting a lot of praise from journalists. So yeah, let the exclusive Sony artsy games continue braaa.

If thats the most childish thing youve heard in ages, I suggest you should get out more....

Oh ya.... the Unfinished Swan. Currently below 80 on meta.Aint no Journey buddy. Sony COULD have renewed the contract with ThatGameCompany, but I guess choose not to for some unknown reason. We have no facts but we can agree that it was certainly in Sonys power to do so. But they didn't.



Xbox: Best hardware, Game Pass best value, best BC, more 1st party genres and multiplayer titles. 

 

the2real4mafol on 18 October 2012
kowenicki said:
the2real4mafol said:
CChaos said:
the2real4mafol said:
They are just credit rating companies, what's the big deal?

They are actually a very big deal. Standard and Poor's, Moody's and Fitch Ratings are considered 'The Big Three', which are the three most prominent rating companies around. Basically, if they speak, others listen, because they are the ones who rate corporations and countries alike. When the ratings for those three go down, the interest rates on debt and borrowing costs rise, sometimes a great deal, and which means that the company in question will require more money to pay back the totals, because of those larger interest rates.

Basically, a company's credit rating isn't that much different than a normal person's. If you have a bad rating, you won't be able to manage some things (like buying a car or house on credit) and, when you do, they'll see you as higher risk and will make you pay back more because of that risk. Here's a link to explanations on credit ratings and how they work.

http://www.investopedia.com/articles/00/091800.asp#axzz29OgOtmIA

Same thing for a company, but instead of having to pay a few hundred dollars more per month on your mortgage, we're talking the realm of tens of billions of dollars. That usually means that return pay on the debt is billions as well when your credit rating is bad enough. Basically, it amounts to 'the lower your rating, the more of your profit you're paying into payments and interest on your debt'.

I've heard of S&P, moodys etc. and know what they did basically but just don't really see the point in their existence. It's make the competition between countries or companies even more unfair than it should do in my view, even if a company like sony is in bad shape financially, all they seem to do is, make it harder for a company like sony to recover, while say microsoft or apple continue to grow rapidly, as they get a big advantage from sony's weak position. In terms of countries, it's the same thing America and Europe get it easy, while Africa which was not given a chance is left poor and without investment. I guess I don't understand how the financial system works, but it don't seem to fair to me


No you dont.

 

The reason for the ratings agencies is to PROTECT lenders and investors.  if the rating agencies think a company is at greater risk of defaulting on debt then they rate them lower.  Thus lenders will either not lend to them or lend to them at an increased rate due to the higher risk of non repayment.  That is not unfair in any way, shape or form.  It is entirely fair, a good independent check and balance and is the essential transparency that the business world needs.

You don't need to tell me I don't understand, I knew that already. The working of the financial world is something I don't really care about, it's the politics I care about. I say it's not fair as it seems to do nothing to help smaller business' grow. It only really helps the bigger companies grow bigger, as a good rating suggests more investors for that company as you say. 



Xbox One, PS4 and Switch (+ Many Retro Consoles)

'When the people are being beaten with a stick, they are not much happier if it is called the people's stick'- Mikhail Bakunin

Prediction: Switch will sell better than Wii U Lifetime Sales by Jan 1st 2018

Lostplanet22 on 19 October 2012

Sony closes Japan factory, cuts 2,000 jobs

Summary: The consumer electronics giant has cut another 2,000 jobs in Japan as the firm continues its battle against a cash hemorrhaging problem after weaker than expected first-quarter results.



Beleaguered electronics maker Sony will cut 2,000 more jobs by March 2013 as the firm continues to restructure its operations to remain competitive in the market.


The electronics giant said the restructuring will cost about $370 million annually from the next fiscal year this coming April, but will likely have a minimal effect on the firm's annual earnings results.

Sony said in a statement that the efforts stem back to April when the struggling firm announced it would kickstart its 'revival' plan by cutting 10,000 workers across its global business, including approximately 3,000 in Japan. The restructuring efforts would cost Sony $926 million during this financial year; a small price to pay for a shot at economic certainty in the near future.

The latest casualty is Sony's Minokamo factory, which produces camera and mobile phone lenses, and also offers customer services for the firm's Sony Mobile division. Sony will transfer some activities out of the Minokamo site but skipped on much of the detail.

Along with the mandatory cuts, Sony is investing in an early retirement scheme that will see around 20 percent of the firm's headcount at its Tokyo headquarters reduced by the end of the fiscal year in the coming April.

As the firm continues to bleed cash from its very pores, Sony is refocusing its product line efforts on three key areas: gaming consoles, digital imaging, but also crucially, mobile devices.

Since the joint venture between Sony and Ericsson came to a close following a $1.5 billion all-cash buyout from Sony a year ago, much of the firm's focus has been on getting the new division Sony Mobile on its feet. With that, the Sweden-based operations relocated back to the mothership in Tokyo, shedding a further 1,000 jobs in the process.

The mobile division, a wholly owned subsidiary of Sony Corp., gained 133 percent year-on-year in the firm's first-quarter earnings earlier this year, but largely due to the fact that the mobile unit did not actually exist a year ago.



 

sales2099 on 19 October 2012

^^
Wow lots of job cutting and early retirement packages. Not sure I agree with their increased efforts in the mobile space. Their mobile products seem overpriced and overlooked.

But the fans will take comfort that they are focusing more of gaming now



Xbox: Best hardware, Game Pass best value, best BC, more 1st party genres and multiplayer titles.