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Forums - Sales Discussion - 5.5 Million PS3s Shipped

To be fair, 1.9 Million PS3s in factories, warehouses and ships are a very important asset to any company. They represent $1 Billion or more in assets. Of course investors need to know about that kind of stuff. It's not noise. I mean, wouldn't Nintendo like to have a couple of million Wii's lying around??



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in a word..... sad news for sony



Just noticed the tail end of FishyJoe's quote "Perhaps that's why the company chose to stick to a more conservative sales forecast of 11 million units this year." Want to find a non flamebait way of saying this. If they sell 11 Million PS3's in a year then it's well on its way to success -- but it needs a major upturn to achieve that.



Stockpiles of electronics are about the worst type of inventory to store though. You're paying todays prices in components to build units to sell later when those same components will be cheaper.

The shorter you can keep the time between production and final sales will yield the greatest profit. That's how Dell became so successful because they were able to maintain lower inventory levels than it's competitors.



The biggest risk Sony has in this situation is that their manufacturing processes might get cheaper as time goes on, but if they have 1.9 million units sitting in warehouses they've already spent the money to build them at the earlier, higher cost. And storage is not free -- even if you own the warehouse outright, you're paying property taxes, utilities, labor to manage and secure the piles of unsold equipment... so they're not getting any cheaper.

This makes any kind of a retail price cut even more painful to contemplate, because any manufacturing savings may not actually have been realized by Sony. The backlog could even delay a price cut until the savings on NEW manufacturing can support it.

EDIT: What FishyJoe said much more succinctly while I was typing this up. :) 

 



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DKII said:
How do you know that is sold to retailers and not just shipped out of their factories to some warehouse somewhere?

"To Sony, shipped has always meant 'sold' and shipped to retailers,'" Karakker notes. "Microsoft views 'sold' as what has been sold to retailers but could be sitting on pallets in warehouses or stacked on store shelves. 'Sold' to Sony has always meant what the consumer has actually purchased." http://www.gamepro.com/news.cfm?article_id=93548

 



Sir Cedric said:

 

DKII said:
How do you know that is sold to retailers and not just shipped out of their factories to some warehouse somewhere?

 

"To Sony, shipped has always meant 'sold' and shipped to retailers,'" Karakker notes. "Microsoft views 'sold' as what has been sold to retailers but could be sitting on pallets in warehouses or stacked on store shelves. 'Sold' to Sony has always meant what the consumer has actually purchased." http://www.gamepro.com/news.cfm?article_id=93548

 


 

Interesting. Somebody's not telling the truth here, but honestly, I have no idea who it is.


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Another thing to consider was that Sony itself estimated that they would ship 6 million consoles. So not only did they miss their target by half a million, but they've built enough stockpile to last for months if they stopped production.

Now they are estimating 11 million units for the next year? I think all they did was double their first six months shipping total and threw that number out hoping people would believe it.



rocketpig said:
Sir Cedric said:

 

DKII said:
How do you know that is sold to retailers and not just shipped out of their factories to some warehouse somewhere?

 

"To Sony, shipped has always meant 'sold' and shipped to retailers,'" Karakker notes. "Microsoft views 'sold' as what has been sold to retailers but could be sitting on pallets in warehouses or stacked on store shelves. 'Sold' to Sony has always meant what the consumer has actually purchased." http://www.gamepro.com/news.cfm?article_id=93548

 


 

Interesting. Somebody's not telling the truth here, but honestly, I have no idea who it is.

 Oneda is way higher up in the Sony food chain. CFO > Communications director



As of March 31st

5.5m PS3 produced

3.6m sold to retailers

~3.0m sold to customers