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Forums - Sony Discussion - What if Sony fails to get investor interest on Feb 20th?

How exactly would they fail? I mean, show off some next-gen games, some first party special sauce and I think anyone will be hyped.

Anyway can you stop it with the $599 thing? Obviously the PS4 won't cost anywhere near that much to produce. If the rumored prices of $429-$529 are true, they're selling at a profit.



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VGKing said:
How exactly would they fail? I mean, show off some next-gen games, some first party special sauce and I think anyone will be hyped.

Anyway can you stop it with the $599 thing? Obviously the PS4 won't cost anywhere near that much to produce. If the rumored prices of $429-$529 are true, they're selling at a profit.

It's not a question of what they'd do to fail; it's a question of what they can do to get investor interest. A lot of people are saying the "more of the same" approach will stimulate investment, but I have my doubts. I'd call the gaming market for investment rather bearish right now, so a lot of investors will be incredibly cautious about putting their money into gaming industry ventures. They need something that will stand out from amongst the rest.



fordy said:

So if Sony decides to sell the console for a loss for initial rampup, where do you think the money incurred from loss from manufacturing is going to come from?

R&D is done yes, but it takes a LOT of money to manufacture MILLIONS of consoles...


I don't know - where did the money to buy out Gaikai, Sucker Punch and Media Molecule came from? Did you carry out events so get investors on board?



Lawlight said:
fordy said:

So if Sony decides to sell the console for a loss for initial rampup, where do you think the money incurred from loss from manufacturing is going to come from?

R&D is done yes, but it takes a LOT of money to manufacture MILLIONS of consoles...


I don't know - where did the money to buy out Gaikai, Sucker Punch and Media Molecule came from? Did you carry out events so get investors on board?

Was this back when Sony's credit rating wasn't at such dangerous levels?



fordy said:
Lawlight said:
fordy said:

So if Sony decides to sell the console for a loss for initial rampup, where do you think the money incurred from loss from manufacturing is going to come from?

R&D is done yes, but it takes a LOT of money to manufacture MILLIONS of consoles...


I don't know - where did the money to buy out Gaikai, Sucker Punch and Media Molecule came from? Did you carry out events so get investors on board?

Was this back when Sony's credit rating wasn't at such dangerous levels?


It was after their credit rating was slashed to BBB. But 4 months before it was set to "Junk" status. After that Sony announced multiple products since then including their 4K TVs and their new Xperia smartphones and tablets. Where did that money come from?



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Lawlight said:
fordy said:
Lawlight said:
fordy said:

So if Sony decides to sell the console for a loss for initial rampup, where do you think the money incurred from loss from manufacturing is going to come from?

R&D is done yes, but it takes a LOT of money to manufacture MILLIONS of consoles...


I don't know - where did the money to buy out Gaikai, Sucker Punch and Media Molecule came from? Did you carry out events so get investors on board?

Was this back when Sony's credit rating wasn't at such dangerous levels?


It was after their credit rating was slashed to BBB. But 4 months before it was set to "Junk" status. After that Sony announced multiple products since then including their 4K TVs and their new Xperia smartphones and tablets. Where did that money come from?


Do they sell their TVs and smartphones at a profit or at a loss? It's a lot easier to get money on the basis that you're making gains on a short term. It's much harder to get investment when the gains are long term and start off at an initial loss.

If you're trying to argue that Sony doesn't need external investment for a PS4, then you have to argue against the many articles stating that investors were invited to the meeting, otherwise you would have nothing BUT game developers etc.



The Playstation is just a piece of a pie and if I was an investor the TV side is the part that would worry me not so much the Playstation side especially now that it isn't being used as a vehicle to introduce costly new tech , anyway if I'm correct isn't this event usually focused at the retail side to show future direction negotiate shelf space etc so even with the investors being there it's more for them to see the direction Sony is headed and hopefully like the pr most of the decisions would have been made and yes investors know you have to spend a buck to make a buck especially with sales declining .



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It is a interesting supposition that I never gave much consideration to. While it is true that Sony took out over seven hundred million dollars in loans at a really good rate to fund the manufacturing of the PS3. I haven't felt or thought that way about Sony in quite some time. I suppose with their current credit rating, and their recent issuing of those convertible bonds. That the company was neither in a good position to get anything close to a decent interest rate, or to get the kind of money they would need.

So I just naturally assumed that they weren't going to sell at a loss, and if they did they would instead dip into their cash reserves. Rather then take on a even greater debt burden. Have you given any thought to the idea that Sony doesn't actually need to seek outside investment to fund the initial production run. The sale of the buildings, and the issuance of the convertible bonds brought in a great deal of money, and not all of it has been accounted for yet.

It might not be seven hundred million, but a few hundred million would be more then enough to make a initial production run without having to count on getting outside investment. Granted that Sony wasn't silly, and if they were being silly chances are they wouldn't have gotten the outside investment anyway. I really have a hard time seeing Sony opting into a loss lead strategy. Especially when they need every division that can show a turnaround to do exactly that to rebuild investor confidence.

I really think it is is important for Sony to not only show a profit for this past year, but to show a profit for next year too. That will not be dependent on the sale of major assets to make it happen. If they end up showing a loss for this year it will be doubly important to make a really unambiguous profit next year. Both mean that the console division cannot be loss leading new console or not.



mjk45 said:
The Playstation is just a piece of a pie and if I was an investor the TV side is the part that would worry me not so much the Playstation side especially now that it isn't being used as a vehicle to introduce costly new tech , anyway if I'm correct isn't this event usually focused at the retail side to show future direction negotiate shelf space etc so even with the investors being there it's more for them to see the direction Sony is headed and hopefully like the pr most of the decisions would have been made and yes investors know you have to spend a buck to make a buck especially with sales declining .


Usually these things come in 2 phases. Sometimes they can occur at the same time. The first is interest/investment levels, and prices are decided then. My guess is that the final price will be available at E3, once they've analysed the data and collected any interests in investment. It will be there that major retailers would negotiate according to shelf space/local demand/preorders etc.



Here is the deal. First off, the new PS3s are a joke. The first addition(60GB) was a beautiful sweet piece of machinery. Then they pump out a bland flat painted stripped down sequel..Though of great quality but nothing more beautiful than a DVD player! With this new junky, George Forman one they should have put back the Emotion chip and got back full backwards compatibilty! It makes no financial sense for a struggling comapny to put themselves at risk with another machine during a bad economy. They put there first party games for the Orbis at 39.99 and they will blow by Nintendo and Microsoft similar to what the Wii did! Leave 2nd party games at 59.99 and watch the 720 and Wii U collect dust on store shelves! it blows me away also that Sony did not insist with publishers to maximize Blue Ray too. Just think if Crysis 2 had the first one on the disk. I saw that Resistance collection the other day too...three disks..WTF...They should have reenegized the ps3 brand and let Microsoft blow there nut on the 720 and come out with the PS4 in 2015..I stand behind you Sony BUT I think your toast...I bought another PS3 just in case you go out of business..I just had too many games of yours I need to play the next five years!!!!