NJ5 said:
Groucho said:
Guys... Sony Computer Entertainment is one of the most profitable divisions of Sony, after you discount hardware costs. The article itself mentions that focusing more on "software" as one of the goals they are shooting for.
At Sony, "software" means games and PC products (like their music studio stuff). Only 8000 of Sony's over 150000 employees work in the SCE division. If they do anything, they will axe hardware/financial/manufacturing divisions and enlarge their software division. PS3 owners have nothing to worry about. Contrary to the "OMG everyone panic" idea presented in this thread by many posters, this could be one of the best things to ever happen to the PS3.
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So you're saying SCE will ditch hardware and focus on making software? Isn't that similar to predicting Sony will be like Sega?
Note that I'm not saying it will happen, just trying to understand how this can be the best thing ever for the PS3 as you said.
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Basically all I'm saying here is that SOny's next platform will likely not be a new media mover (i.e. Blu-Ray), or anything new or cool. Very likely it will be based on the same hardware specs, or very very similar. All Sony has to do, to reduce their gaming division hardware R&D and turn hardware losses into profits, is sit and live out the "10-year plan", as advertised. The PS3 hardware will likely turn from loss/unit to profit/unit in 2009 -- as long as their are no serious R&D expenses, I think we can reasonably expect SCE to turn a decent profit for many years to come. If you look at the quarterly losses over the last two years for SCE, you can see them getting closer and closer to profitability, at a pretty good clip -- very much in line with reduced PS3 manufacturing expenses. While the entertainment division alone will likely not entirely recover the costs of PS3 development (IMO), once you factor in Blu-Ray royalties over the next decade, the PS3 has done exactly what Sony has set out to do with it. Sony only looks bad to knee-jerk reaction, uninformed stockholders. Most major stock analysts seem to agree that Sony stock is definately a "hold" or "buy" for long-term at this time.
Claiming that SCE software is unprofitable, because the Entertainment division bore the expense of PS3 R&D, and Blu-Ray player loss leading, is just plain wrong. Sony will not close their game development studios. Its ridiculous to think they'd be so short-sighted.
The next Sony platform could easily be an offshoot of the PS3, for a small fraction of the R&D cost of the original. Nintendo did it this way. Sony can do the same. Most of the hardware costs from Sony's Entertainment division, after the PS3 loss/unit is dealt with, are likely R&D -- just sticking with the same (or nearly so) architecture (which can survive this and the next generation, if we've learned our lessons from the Wii yet) will allow them to reduce their major expenses for years to come. Without R&D or per-unit hardware losses, Sony's Entertainment division will likely be very profitable in the next few years.