Hello All.  I would like to test to see if the Sony financial model is somewhat accurate at predicting profit / loss statements.

Note that I am not an expert at "predicting" sales.

However, if vgchartz as a community is more accurate at predicting sales, AND IF the financial model is fairly accurate, then projecting Sony results would be fairly accurate.

So here goes...

so where is the model, or if I am misunderstanding, is the "consensus" the result of this model that you speak of?

This was the original thread:

http://www.vgchartz.com/forum/thread.php?id=31393&start=0

To summarize:

Prediction:

PS2 HW = 2.15 million @ $10(*) net profit = $21.5(*)

PSP HW = 3.65 million @ $8(*) net profit = $29.2(*)

PS3 HW = 2.5 million @ loss of $60(*) per unit = $150(*) LOSS

PS2 SW = 21.5 million @ $2(*) profit = $43(*)

PSP SW = 16.0 million @ $2(*) profit = $32(*)

PS3 SW = 19.5 million @ $2(*) profit = $39(*)

TOTAL PROFIT = $14.7(*) million or approx. $15 million

As per original projection.

Note:  The reason I was projecting a range of $50 million LOSS to $15 million PROFIT is because I wasn't too confident about the PS3 cost reductions.

Though the weakening of the US$ is probably also a factor in everything.

COMPARE:

Actual Sony reported numbers, with the same profit assumptions:

PS2 HW = 1.51 million @ $10(*) net profit = $15.1(*)

PSP HW = 3.72 million @ $8(*) net profit = $29.8(*)

PS3 HW = 1.56 million @ loss of $60(*) per unit = $93.6(*) LOSS

PS2 SW = 19.3 million @ $2(*) profit = $38.6(*)

PSP SW = 11.8 million @ $2(*) profit = $23.6(*)

PS3 SW = 22.8 million @ $2(*) profit = $45.6(*)

TOTAL PROFIT = $59.1(*) million - AS PER FINANCIAL MODEL

Actual Sony Reported Profit = $51 million

Difference/Variance = 8.1 million or 16%

While the results have a fairly significant variance of 16%, the actual dollar amount is relative small at 8 million.

I think the model works pretty well in predicting Sony Game products' profitability.

SUMMARY:

I think this was pretty good result, given the relative lack of actual data, besides Sony reported figures.

For those people who told me that I was MAKING UP NUMBERS or "pulling them out off my ass" so to speak, do you have any comments?

I don't mean to be rude, I just want to know if this justifies the numbers that I have been posting in the past few weeks about both Sony and MSFT numbers.

Thanks and enjoy reading. Please leave feedback.

I will try to answer all questions as I can.

fair enough

I think that 16% accuracy is a great achievement. Hopefully, with more quarterly iterations, you can get more and more accurate, but as it stands now I applaud your model and it's accuracy.

So what do you think dallas? any comments?

 Thanks.  Hopefully I can get more and more data from the community and it gets more accurate.

By overestimating PS3 sales and underestimating the other sales, the projected profit turned out to be close.

I think the 8 million difference in this case, more than the 16% is a "better" achievement, since $50 million is a relatively small number, in terms of financials.

It's been forever since I took the financial modeling class, but it does seem a bit unusual to try to figure out the next quarter's HW&SW sales as based on this quarter's profits. It might be a better idea to use traditional fin modeling techniques like projecting CF's, AR, liabilities, etc. In the real world fin modeling ain't just a simple cut and dry thing, and even a lot of financial professionals w/ MBAs and Certified Financial Analyst certifications (basically the only cert out there for the equity analysts that do modeling need) have a hard time with it, but seriously, good try mate, as a lot of times, I think that a lot of times, a fairly intuitive guess would work just as well as anything else, I mean I guessed around -10 to -20 million yen and things were a bit better than I expected, but I was definitely in the ballpark.

If you think that you'll like fin modeling, it would be a great idea to take a lot of accounting classes, b/c you'd need to know how all of the asset/Liab/OE classes affect each other to produce the big picture.

Cheers.