Yeah, the point is that with the new metric, the total number at March 2008 is lower, but the change in the forecast made it more ambitious for this fiscal year. As KruzeS said, now they have to convince retailers to accept 10.29 million PS3 in 9 months, which I think is about what the Wii is shipping right now (granted, the holiday period will help them a bit, but it's still a 383% increase over their first quarter).

In practice, for total numbers after March 2008, I think this might not change things much. I say this because the change is 1.9 million down, which might well be the difference between shipped and manufactured units at that time. Unless they were planning on having loads of PS3 stored in their warehouse when they were using the "manufactured" metric. This is a very big "unless", because we can all see they are almost for sure going to fail their forecast anyway.

This is starting to get really confusing, I hope they don't change their metric again in their next report :P

You see, this is why it is so misleading.  Consider the situation where they may have planned this -- "our fiscal '07 numbers are terrible and we have a lot of unsold units!  How can we convince investors that it was more successful?"  "well, we could talk about produced numbers but use the word 'shipped'."  "But that would hurt us in the next fiscal year since we do not want to continue producing at this level if they're not selling this high."  "We could address that by redefining what we consider 'shipped' to be the traditional meaning that everyone else uses..."  

It certainly looks suspicous to me anyway.  And on paper, it looks like they shipped 5.5 million in fiscal '07 and they're projecting shipping 11 million in fiscal '08.  So a casual investor will look at that and say, "ah, looks like they're going to have shipped 16.5 million total units as of march '08.  Sweet.

In reality, they're projecting they would have shipped 14.5 million total units during that time frame.  And they'll likely down-revise that number at least once more.

NJ5 ,you are doing your best to transmit the idea that the new accounts of Sony mean shipped to retail .But Sony is saying sold to customers .We have seen recently at least 2-3 cases with Sony separating clearly their shipped to retail number and their sold number .What do you pretend insisting so much on this ?Next time Sony gives data they will say we have shipped Y and sold to customers X,just as the last time ,dont waste your time ours insisting on this .

This is such a horrible plan. Yes, some very stupid investors (surely no 3rd parties are dumb enough to take this forecast at face value) may look at this and say "okay, Sony is doing great" but when they fail to meet even 2/3 of their projected goal it's going to REALLY damage their stock value and confidence among investors will plummet.

NJ5 (and others), this is really fantastic work. Someone really needs to type this up and put it in a news story on the front page.

I'm more convinced than ever now that some of the bigwigs at Sony really do not understand the reality of how their product is selling. I think they actually believe those sales numbers that they're quoting, despite the absolute impossibility of achieving them. Spinning the numbers notwithstanding, what are they going to do when March 2008 rolls around and the PS3 numbers are HALF of their stated forecast? Heads are going to roll somewhre...

You are starting to jump the shark with your comments here Diomedes... Have you been paying any attention to what people say in this forum at all? And apparently all because you read a couple of wrong news articles by journalists who don't know how to read a financial report...

Read the financial report and hear/read the conference declarations from Sony yourself, don't trust boneheaded journalists. As has been said one billion times here, Sony used to count produced PS3, and now they count PS3 shipped to retail...

You are completely ignorant of all things business, maybe of life in general, I haven't decided yet. Let me see if I can help people stop saying this:


SONY CAN NOT LEGALLY REPORT NUMBERS SOLD TO CONSUMERS ON FINANCIAL REPORTS, BECAUSE THEY DO NOT SELL TO CONSUMERS, AND FINANCIAL REPORTS MUST BE ACCURATE. SONY CAN ONLY REPORT 2 THINGS: SHIPPED TO WAREHOUSES AND SHIPPED TO RETAILERS. THEY USED TO REPORT TO WAREHOUSES, NOW THEY REPORT TO REATAILERS. THEY STATED THIS EXPLICITYLY IN THE FINANCIAL REPORT. IF YOU CAN NOT UNDERSTAND THIS SIMPLE CONCEPT MY 3 YEAR OLD NIECE IS SMARTER THAN YOU.

Edit: If it's necessary I can use my scanner to show you the picture I drew to help her understand it Diomedes.

Edit 2:  Oops, had a typed the wrong thing in the explanation.  Fixed now hehe. 

It looks like Diomedes1976 might be one of your investors who would be confused by these financial reports. 

You know it occurs to me that Sony could have a much simpler reason for their hardware production exceeding their needs many fold. They might be pushing to get to a position where they can bolt from the console market.

Right now Sony has no choice but to stay in this market. They cannot leave now they would lose billions on the venture. However if they can ratchet up production, and equal out their loss ration with profit ratio on later machines. They could effectively make the machines have zero cost for production. Once they achieve that they can halt production. Actually they might actually be forced to. Until those machines are sold Sony is out the cash in hand.

What this means is they could build fifteen million units. Stop production and sell off the remainder of the units through the consoles life. After all how many consoles will not sell at the very least that many, and more to the point if not as a console then as a movie player then. They can remove their hardware loss in less then a year, and the licensing fees can help make up the other losses down the road.

Sony can actually afford to wait quite some time to sell off the units. They borrowed heavily to finance their console, and those loans are probably not due for their payment for many years. So Sony would do well to cover its losses so it could walk away from the market.

There is a difference between winning, losing, and staying unchanged. Right now I think that Sony would have a major goal of at the least staying unchanged financially. They really do not want to lose, and they are realistic about their chances of being able to win. They would like to win, and if they start too then the safe path will not cost them anything hell it would put them in a position to take advantage of it. However if they do not win they are in a position to leave the race without actually losing anything for the effort.

Just an interesting way to look at the question perhaps Sony is running up production so they can run out of the market. Most of us would not think this way basically, because we could not afford to. We would never spend into a problem to cut costs so we can sell off and leave. However we do not have the resources or the volume of production a company has. How would we view the world if every month our bills would go down at an average rate.