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Forums - Sony Discussion - Sony slashing jobs, leaving unprofitable businesses

senortaco on 09 December 2008

Oh also I feel what happen to Sega was that they were failing in their ONLY non-core business(hardware). Sony being a conglomerate has other avenues that can keep their gaming (hardware) division afloat...



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DMeisterJ on 09 December 2008

PS3 being abandoned wouldn't happen anyway.

They've already sunk 3 billion into it, no point in throwing it into the trash... lol.



Gnizmo on 09 December 2008
DMeisterJ said:
PS3 being abandoned wouldn't happen anyway.

They've already sunk 3 billion into it, no point in throwing it into the trash... lol.

 Thats called a sunk cost. While the PS3 being abandoned is extremely unlikely the fact that they are already 3 billion in the hole isn't as much an incentive to keep going as you might imagine. My bet is a few internal studios will either be closed, or have the personel cut back. I can't see the game division getting hurt much more than that because of the potential for profit.



Starcraft 2 ID: Gnizmo 229

Gamerace on 09 December 2008
TheBigFatJ said:
Gamerace said:
I'm just going to come out and say it. Flame me if you must. The PS3 should be abandoned. It was lossing them money even before the currency became an issue.

Canceling the PS3 would screw every company developing product for it.  It would be billions of dollars lost, and it would suggest that Sony would abandon their hardware if they make too many mistakes.  That would deter people from developing on Sony platforms in the future.

Abandoning the PS3 would cost more than a few billion dollars in lost profits over the next couple of decades.  You are taking a far too short-sighted strategy.  Sony does make money on hardware for all consoles prior to the PS3.  They just don't make it in the first year -- after that, it is all gravy.

The PS3 has been a huge loss for them and a huge cost.  It has cost them nearly 10 years of profits from the PS2 and it is still losing money.  However, it is still worth while keeping the playstation brand a Sony hardware product so that Sony can collect revenue in the future from it.

Next generation both Sony and Microsoft will be looking to make money.  The strong suspicion is that they'll release products not quite as high end as the 360/PS3 were when they were released, because putting out hardware that expensive is too risky.  Sony will probably outsource much of their R&D to companies who are better at those things, and they will probably buy commodity hardware, especially the CPUs, for the next system. 

There's no way they'd do another cell fiasco.  All of that cost for so little benefit.

 

 By the end of Christmas and certainly by the time PS3 stocks were depleted after a cancellation there would be 20m PS3's sold.   That's the same amount the GC and Xbox achieved all of last generation.   You're suggesting no one could make a profit making games (all ported from/to 360 anyway) for a userbase of 20m??  Who's being short sighted?   Does stopping production somehow remove those sold units from people's homes? No.   Whomever has a PS3 could expect a continued stream of great AAA games right up until the end of this generation.   There's no reason why any developer, including Sony would ever forsake a userbase of 20m.

However... If Sony continues to sell the hardware, that division will continue to bleed money.  PS1 & 2 only made profit on the hardware because they became the dominate consoles.   By now it's clear PS3 will be last in this generation.  It will probably never, ever, become a profit generator in and of itself (hardware).   But the existing base can be for future game sales.   

So if they stop the PS3 hardware but continue selling games, they'll make profit.  If they port those same games, Killzone 2, God of War, etc. to 360, they'll make 3 times the profit.   So why not?   Fanboys be damned.   People depend on Sony for their livelihood.   I'd rather those people had a job than Sony goes bankrupt maintaining the PS3 for the fanboys.



 

Ail on 09 December 2008
Gamerace said:
TheBigFatJ said:
Gamerace said:
I'm just going to come out and say it. Flame me if you must. The PS3 should be abandoned. It was lossing them money even before the currency became an issue.

Canceling the PS3 would screw every company developing product for it.  It would be billions of dollars lost, and it would suggest that Sony would abandon their hardware if they make too many mistakes.  That would deter people from developing on Sony platforms in the future.

Abandoning the PS3 would cost more than a few billion dollars in lost profits over the next couple of decades.  You are taking a far too short-sighted strategy.  Sony does make money on hardware for all consoles prior to the PS3.  They just don't make it in the first year -- after that, it is all gravy.

The PS3 has been a huge loss for them and a huge cost.  It has cost them nearly 10 years of profits from the PS2 and it is still losing money.  However, it is still worth while keeping the playstation brand a Sony hardware product so that Sony can collect revenue in the future from it.

Next generation both Sony and Microsoft will be looking to make money.  The strong suspicion is that they'll release products not quite as high end as the 360/PS3 were when they were released, because putting out hardware that expensive is too risky.  Sony will probably outsource much of their R&D to companies who are better at those things, and they will probably buy commodity hardware, especially the CPUs, for the next system. 

There's no way they'd do another cell fiasco.  All of that cost for so little benefit.

 

 By the end of Christmas and certainly by the time PS3 stocks were depleted after a cancellation there would be 20m PS3's sold.   That's the same amount the GC and Xbox achieved all of last generation.   You're suggesting no one could make a profit making games (all ported from/to 360 anyway) for a userbase of 20m??  Who's being short sighted?   Does stopping production somehow remove those sold units from people's homes? No.   Whomever has a PS3 could expect a continued stream of great AAA games right up until the end of this generation.   There's no reason why any developer, including Sony would ever forsake a userbase of 20m.

However... If Sony continues to sell the hardware, that division will continue to bleed money.  PS1 & 2 only made profit on the hardware because they became the dominate consoles.   By now it's clear PS3 will be last in this generation.  It will probably never, ever, become a profit generator in and of itself (hardware).   But the existing base can be for future game sales.   

So if they stop the PS3 hardware but continue selling games, they'll make profit.  If they port those same games, Killzone 2, God of War, etc. to 360, they'll make 3 times the profit.   So why not?   Fanboys be damned.   People depend on Sony for their livelihood.   I'd rather those people had a job than Sony goes bankrupt maintaining the PS3 for the fanboys.

That's a very shortsighted view.

How many new games were developed for the Xbox once Microsoft stopped selling the hardware ?

Not many.........

Sony doesn't make most of its software profit out of the games it actually develops but from collecting royalties on all those games that get published on the PS3 and on which Sony actually hadn't to spend a dime on developing..

 

PS3 isn't going to bankrupt Sony and in the big scheme of all things it's not the reason Sony is having all those problems.

Sony missed the transition to non CRT Television and is only catching up now thanks to its Bravia brand which actually uses technology Sony is getting out of a partnership with Samsung ( because Sony was really far behind its competitor on LCD technology).

 



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !

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Gamerace on 09 December 2008
Ail said:
Gamerace said:
TheBigFatJ said:
Gamerace said:
I'm just going to come out and say it. Flame me if you must. The PS3 should be abandoned. It was lossing them money even before the currency became an issue.

Canceling the PS3 would screw every company developing product for it.  It would be billions of dollars lost, and it would suggest that Sony would abandon their hardware if they make too many mistakes.  That would deter people from developing on Sony platforms in the future.

Abandoning the PS3 would cost more than a few billion dollars in lost profits over the next couple of decades.  You are taking a far too short-sighted strategy.  Sony does make money on hardware for all consoles prior to the PS3.  They just don't make it in the first year -- after that, it is all gravy.

The PS3 has been a huge loss for them and a huge cost.  It has cost them nearly 10 years of profits from the PS2 and it is still losing money.  However, it is still worth while keeping the playstation brand a Sony hardware product so that Sony can collect revenue in the future from it.

Next generation both Sony and Microsoft will be looking to make money.  The strong suspicion is that they'll release products not quite as high end as the 360/PS3 were when they were released, because putting out hardware that expensive is too risky.  Sony will probably outsource much of their R&D to companies who are better at those things, and they will probably buy commodity hardware, especially the CPUs, for the next system. 

There's no way they'd do another cell fiasco.  All of that cost for so little benefit.

 

 By the end of Christmas and certainly by the time PS3 stocks were depleted after a cancellation there would be 20m PS3's sold.   That's the same amount the GC and Xbox achieved all of last generation.   You're suggesting no one could make a profit making games (all ported from/to 360 anyway) for a userbase of 20m??  Who's being short sighted?   Does stopping production somehow remove those sold units from people's homes? No.   Whomever has a PS3 could expect a continued stream of great AAA games right up until the end of this generation.   There's no reason why any developer, including Sony would ever forsake a userbase of 20m.

However... If Sony continues to sell the hardware, that division will continue to bleed money.  PS1 & 2 only made profit on the hardware because they became the dominate consoles.   By now it's clear PS3 will be last in this generation.  It will probably never, ever, become a profit generator in and of itself (hardware).   But the existing base can be for future game sales.   

So if they stop the PS3 hardware but continue selling games, they'll make profit.  If they port those same games, Killzone 2, God of War, etc. to 360, they'll make 3 times the profit.   So why not?   Fanboys be damned.   People depend on Sony for their livelihood.   I'd rather those people had a job than Sony goes bankrupt maintaining the PS3 for the fanboys.

That's a very shortsighted view.

How many new games were developed for the Xbox once Microsoft stopped selling the hardware ?

Not many.........

Sony doesn't make most of its software profit out of the games it actually develops but from collecting royalties on all those games that get published on the PS3 and on which Sony actually hadn't to spend a dime on developing.. 

That's a good point.  However, Sony could continue support for the PS3, unlike MS who dumped the Xbox cold.  Developers realized much of the Xbox base would upgrade to 360 so they developed mostly for that.   PS3 owners wouldn't be ditching their PS3's for another system for quite a while and HD costs being what they are, it only makes sense for developers to continue to support the PS3 userbase.   Sony itself would also continue to release games for the PS3 so that also would help encourage 3rd parties too.

 



 

MDMAniac on 09 December 2008

They shoot horses, don`t they? So Sony looks pretty much like a dead horse.



Gnizmo on 09 December 2008

You don't shoot dead horses. You beat them. Still I don't know how you can see Sony as dead horse. They only share two letters, and dead horse is two words. I think you might have severe dyslexia.



Starcraft 2 ID: Gnizmo 229

Dgc1808 on 09 December 2008

Doubt they are leaving gaming. In time they can make things quit profitable in gaming again.



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heruamon on 09 December 2008
EaglesEye379 said:
@heruamon

Foreign exchange changes are playing a big part in Sonys books right now due to the nature of their business. These usually can be weathered through but its the last thing Sony needs right now so it certainly adds to why downsizing is happening.

If you have time, check out their presentation on their recent earnings releases, particularly pages 6 and 8
http://www.sony.net/SonyInfo/IR/financial/fr/08q2_sonypre.pdf. A big reason of decreasing income is due to foreign exchange changes.

 

 

I did read sony's last 10-q report, and did see that currency was one of their excuses, but imho, it's probably the chickens coming home to roost.  Sony was GIVING away PS3 for free last holiday season in droves, to help with HD format war, and they were giving tons of brd movies away for free as well...THAT is a far more important factor in their huge losses of profit margins then currency, imho, but how do you report that...oh...margins are down due to our giving away $hit for free?  I've been saying this for all of 2008, sony was going to have some major problems this year, unless brd really exploded...16k jobs cut later, I rest my case.



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