Deeds said: LordTheNightKnight said: I'll bite, but take into account factors others mentioned. Basically, there could be a reason, other than loans, that analyst want Sony's stock up more than they want Nintendo's and Microsoft's stocks up. Unlikely. Sony is not in a good financial situation. They had to get semi-bailed-out by Dubai World. People think Sony is a healthy company, but the reality is that they aren't.

Analysts wanting stock up. That is not the same as the company doing well. This would be the analysts wanting it to do well. 

colonelstubbs said: Maybe its because Sony consistently produce the best hardware

When?

@ Deeds - I don't think you have an idea of how Sony makes money in the first place. I don't know how long you've been investing but I've been trading stocks for quite a while and believe me when I say this: Sony is not the only company in "debt" and still continue to run their business at a high level, ESPECIALLY in their industry. There is a reason why Sony has an enormous finance department (probably bigger than all of the electronics manufactures in the world), if Sony really wanted to get rid of all their debt (like America) they would. The only problem is that it's not on the top of their CFO's "to do" list, there are better ways to put money in their pocket's (unfortunately the majority of their pocket's are those pesky execs) given the large revenue Sony can create. Razor thin profits, debt, crap equity returns, are all too common in the industries that Sony participates, the majority of investors know this. If Sony were a micro corporation without a history and did not have many many different ways to generate returns then yes, Debt would handcuff them. But saying that Sony is actually in bad shape or handcuffed because of the 3 billion in debt (last time i checked) is pretty ignorant. Now this doesn't mean I'm saying that Sony is in a carefree great situation and every is dandy for them, but they sure as hell aren't handcuffed, espeicially given the point that they could get a financial backing from many sources.

With that said, you are right about one thing. Analyst are bias and do get paid for their reports, but assuming that Sony are the only ones that do this stuff is stupid.

Deeds said: Zkuq said: PS3 > X360, that's for sure. I think analysts simply believe that Wii's success is going to end, or PS3 is going to get a major boost when its price drops. And I, too, believe that PS3 is going to get a major boost when its price gets cut. However, it's very hard to say if then can cut it in time. Also, Playstation is a huge brand and huge brands tend to sell a lot. At the moment it seems Wii is going to win but it's not possible to be sure about that. Saying Sony's PS3 is likely to "win" against the Wii is like saying Suzuki is likely to bury Toyota in 10 years. It isn't going to happen (market forces dont work like that) but the analysts are just doing their jobs. They have to put a good face on Sony.

Did you even read my reasoning? Three reasons isn't much but they're all huge, especially if they all happened to be true. PS3 definitely has a chance of winning even if Wii didn't fail at all. It's the price cuts that determine whethre Sony's wins or not, backed up by the brand and possibly made easier by Wii's failure (which seems very unlikely at the moment). Also, I didn't say I believed PS3 is going to defeat Wii anymore. I think they're going to cut the price as soon as possible if they want to defeat Wii, if it even is possible with Wii selling very well and there being no end in sight to it. However, there is a chance, although not a very big one. Oh, and your example has nothing to back it up, but this case has.

Remember that Malstrom uses ironic humor in his articles. When he says fanboys he may refres what you are saying: that they have been payed to make sony look good now and brainwash people.

Of course, it didn't worked.

I think it is much simpler than that ...

1) For the most part "Analysts" of industrys like the videogame industry really started to exist in any numbers in the mid 1990s, mainly because of the increased size of the industry. This means that most anaysts started working in the wake of the rise of the Playstation and any bias towards Sony would have never been tested before.

2) Analysts are not gamers, they're people with business degrees who work for large investment firms. Their projections are heavily based on brand recognition and other abstract concepts which have very little real impact on the market; on top of this they don't have an understanding of why a consumer would choose the Wii over the PS3/XBox 360.

3) Analysts are amazingly well paid, and have very little connection to the realities that the typical consumer face. They will often assume that while people are spending $5/gal or $1.75/litre gasoline, their food expenses have gone up 25%, and they have lost access to credit, their #1 priority is a $1500 plasma HDTV.

Deeds, it is an interesting and plausible theory.... but i believe you are overthinking. The truth is generally far simpler than we make it out to be.

simple.

you're wrong.

Zkuq said: PS3 > X360, that's for sure. I think analysts simply believe that Wii's success is going to end, or PS3 is going to get a major boost when its price drops. And I, too, believe that PS3 is going to get a major boost when its price gets cut. However, it's very hard to say if then can cut it in time. Also, Playstation is a huge brand and huge brands tend to sell a lot. At the moment it seems Wii is going to win but it's not possible to be sure about that.

Yes, you can be sure. Sony has had the name recognition, the legacy of dominating the last generation, the HD graphics and the Bu-Ray (asset??) since the beginning and they still failed to generate much interest.

 Price cuts so far have generated very modest increases and there is no particular reason to be particularly optimistic about one more. Not to mention that price cutting when you are already losing money on each unit sold, as a long term strategy is a little like Luxembourg getting in a war of attrition with China.

In the unlikely event that a price cut did seriously generate any momentum, why would you assume that Nintendo would fail to respond? New colors alone would likely be enough but if not they can certainly make a price cut of their own and still make a profit. At this point Nintendo could almost give the Wii away and probably make it up on software sales

.Nintendo has still accelerating sales and no end of demand in sight. Sony is showing clear signs of market saturation. I don't believe any credible analysts still believes in any winning scenario for Sony after the misfire of GTA IV in terms of hardware sales. If there was any real market potential left, it would have shown there.

 

I think the reason for all the analysts rooting for Sony is that they don't really understand what makes the industy click. They don't know the reason Sony won last gen, or why Nintendo is winning this gen. When this gen started they assumed things would go as last gen, and now they have a hard time changing their minds and admitting they were wrong.

When you have no idea what's going happen, it's safest to assume things will proceed pretty much the same way as before.