FishyJoe said: alephnull said: FishyJoe said: twingo said: Japanese gov will fix that soon enough kids, you all don't know how things work do yahh.   You haven't been following the Japanese market for the last two decades, have you You either have insanely bad timing or insanely good timing I can't tell. The Japanese government just announced a rather large stimulus package while the BofJ just announced that it is going to start directly purchasing corporate paper and hinted that "vigorous quantitative easing" was on the table after friday's carnage thanks to the failure of the US to bailout it's auto industry. Given that the bruising the nikkei has been taking a month back was being referred to as "Sony-shock" I think they might be a candidate for support. The yen suddenly has been getting hit thanks to large numbers of over leveraged institutions, who have been engaging in the carry trade and now suddenly and simultaneously have to meet their margin calls. This of course happened at the same the BofJ was trying to unwind their dangerously large holdings of sovereign debt amplifying the problem. However if you and NJ5 really think the Yen has more to go then I would suggest you guys open a forex account and place a wager. The economist intelligence unit is still basically predicting the BofJ will intervene to smooth out the yen's strengthening over the next few years predicting an average rate of ¥99 to $1 and ¥134.6 to €1 for 2009. But hey, you guys are the experts, no doubt you will be the next Soros :P     You either can't read or like to fib, because I never said or implied that the Yen is going to get better or worse. I really don't know which direction it will take, but I wouldn't hold my breath on the Japanese government saving the day after nearly two decades of market decline.

They are planning to agressivly inject billions into the market.  What that will do though i don't know.

 

Will it help if they try to shift more focus than what they have now on the Japanese market?

Bboid said: All indications are, based on data provided, the gaming division to return to profitability between Q3 FY08 and sometime in FY09.  Positive sales growth in the division and continued drastic decline in operating loss attributed to PS3 and PSP sales and decreased PS3 production costs.  Though the division is still small within the company it is experiencing the largest growth in the company.  Falling software sales attributed to fall in PS2.

 

This is the key. The indications of profitability. If the financial reports will not show such indications (i.e. breakeven point is not reached now or looking to be there within a quarter) then some restructuring will be required in the gaming division.

Further, if the losses are increased instead of shrinking then it would be a whole new ballgame. Nothing will be immuned.

"Sometimes in FY09" is not narrow enough. The gaming division does not have 6 quarters to get straight. I think they have till the end of the fiscal year. Two more reports. That's it. I wrote above that the next set of reports are pivotal. I hope you can see why now.

amirnetz said: Bboid said: All indications are, based on data provided, the gaming division to return to profitability between Q3 FY08 and sometime in FY09.  Positive sales growth in the division and continued drastic decline in operating loss attributed to PS3 and PSP sales and decreased PS3 production costs.  Though the division is still small within the company it is experiencing the largest growth in the company.  Falling software sales attributed to fall in PS2.      This is the key. The indications of profitability. If the financial reports will not show such indications (i.e. breakeven point is not reached now or looking to be there within a quarter) then some restructuring will be required in the gaming division. Further, if the losses are increased instead of shrinking then it would be a whole new ballgame. Nothing will be immuned. "Sometimes in FY09" is not narrow enough. The gaming division does not have 6 quarters to get straight. I think they have till the end of the fiscal year. Two more reports. That's it. I wrote above that the next set of reports are pivotal. I hope you can see why now.

 

 

Pre currency appreciation it was pretty clear profitability would be reached Q3-Q4 FY08.  Only reason it may be pushed to FY09 is if the currency situation continues to decline.  But if the positive growth continues (and looks like it will continue into the next FY) in the next reports like you say, there is little reason to cut the PS3 or gaming division harshly or completely out.  Restructuring is inevitable for it though and is a good way to strengthen and reinforce it.  2009 may see the ps2 finally go to its grave though (which may push late adopters into buying a ps3 or help the competition even more).  I personally think the ps2 is going to be cut, especially if the PS3 can magically turn around and gain in december and finish the holidays up (even if its up 0.1%).

 

But yeah, it basically revolves around if losses increase due to the yen/fall in demand/global recession or if the company has successfully hedged against a further market meltdown.

If expected revenue > or = cost with a $400 price tag, no price cut.

If expected revenue > or = cost with $350 price tag, $50 price cut can be expected.

If expected revenue > or = cost with $300 price tag, $100 price cut expected.

They have 3 options here.

1. Growth.

2. Restructure.

3. Closure.

Losses is 2005/2006/2007/2008 are irrellevent. Thats the price they pay for trying to win a format war. Just as the losses for the Xbox 1 are null when considering the Xbox. 360. Therefore they have to consider the position they are in now. If revenues from software, services, hardware and third party royalties are greater than their costs at different price points their best course of action is to act to cut the price. It is the only long term solution which sustains the division as it currently exists.

I love these "360 fangirl" threads.

NJ5 said: Kyros said: Again this is bullshit. I don't know who is manufacturing each PS3 part. But most likely its pretty much identical to the 360. Processor from IBM(USA?), GPU from NVIDIA(Taiwan?), put together in China? and so on and so forth. Yen-Dollar conversion may lower their profits in yen but it hardly makes manufacturing a PS3 more expensive for them. At least not much. I don't think anyone said PS3 manufacturing is getting more expensive.

 

   Well let me be the first. "PS3's manufacturing cost in USD has become MORE expensive"

Now for the justification. Nintendo years ago changed many of their suppliers to offer pricing in USD, instead of YEN which most Japanese companies did. Sony However is still dealing with in suppliers in YEN Costs.

Since Nintendo and Sony use a lot of components which originate for JAPAN or from Japaneses based companies, this made sense for both Sony and Nintendo.

Sony and Nintendo have long term negotiated supply contracts with their suppliers, which makes it difficult for Sony. I would think that Sony execs are trying to negotiate with all their suppliers to get some price relief, however since a lot of the suppliers are Japanese based, the cost would be hard to trim (ie Japanese labour, raw materials and companies). The suppliers would be slow to reduce the pricing to Sony, if at all.

Nintendo (and Microsoft) on the other hand has negotiated it pricing in USD, so the shoe is on the other foot. The suppliers have to visit them with cap in hand to try and negotiate a new price for their goods.

So effectively in Japan, Sony will be ok, In Europe and the US however, Sony is taking a bath, while MS and Nintendo would be weathering the storm from a much better position.

 

Nidan

 

"It's not true, it's not true, finance is a myth, Sony is the biggest company in the world, all the analyst like Bloomberg and UBS are wrong, I know it better, you are all just in the pocket of Microsoft, all these numbers are wrong, the PS3 will be profitable next year, wait until the price cut, yadda yadda yadda"

In short: if you don't have anything usefull to add, please stay out of these threads. As you can see there are numerous posters coming with actual FACTS on which they base their claims. You're very welcome to join in.

xenophon13 said: This thread is ridiculous. It is basically a cheer leading section for anti sony. Yall got anything better to do? Also...a few things to consider...strong yen, means they are paying less in other countries where the PS3 is made and assembled. That will offset more than people think. Because if the cost of the machine is going down on a similar lvl to the revenue then they will still be in a decent position to cut the PS3. we have also not had any updates on the reduced cost of manufacturing. Sony as a whole is doing fine, it is hurting like other companies that produce consumer products that people really don't need. Time will tell, but seriously some of you need to get a life better than hoping with the deepest pit of your heart that sony will fail so you can be right. It is not going to make your life any better if sony cancels the PS3.

 

 Um, last look i actually thought that the yen was down against the USD! Infact a 15 year low/ :( 

My bad. Stupid mistake. (i inverted the currencies)

Yup, things are going bad for Sony.. but we all knew that, didn't we. :s