Sony to Post Largest Quarterly Loss in 4 Years: ps 3 to blame

[8th lutz]

Ken Kutaragi isn't the only executive at Sony who may come under fire for the current situation surrounding the PlayStation 3, as Bloomberg's predicting Sony will post its biggest quarterly lost in four years tomorrow, based on a median estimate culled from 11 polled analysts. Consequently, Sony's newish CEO Howard Stringer could start seeing some finger pointing heading in his direction, despite the solid performance of other divisions.

According to the Bloomberg survey, Sony's net loss for the fourth quarter ending March 31, 2006 was 66.5 billion yen ($553 million USD) -- but that number has increased to 77.6 billion yen ($630 million USD) in 2007. Despite Xbox 360's stumbling performance in Japan, its success elsewhere and Nintendo's resounding Wii sales worldwide compound a situation where Sony struggled to even produce enough PS3s early on.

 

Moving forward, Howard Stringer faces a problem: cut the price of PS3 and experience deeper losses in the hopes that it will produce a happier long term situation or stick it out.

[Atari5200]

The PS3 will be fine, Sony will be fine.

[n8littlefield]

I'm not a fan of the console, but this was obviously going to happen. You launch a huge console at a loss without a ton of software to recoup that loss and this will happen - it happens with every launch that's not from Nintendo (as they make profit on hardware, MS and Sony take a loss on purpose). It's not any indicator of Sony's health as a console maker, just that they really didn't have a good enough lineup to tie in with the launch hardware sales.

 

Sony should be much more worried about the recent Japanese software charts where Nintendo just took the top 21 slots

[cimerians]

Whats really the point of a topic like this?

[Curt Vendel]

Sony has lost touch with its customer base - a $500-$700 pricing of a video game console. Understandable that it has other features - but first and foremost it is a video game console and the pricing is absurd to be charging.

 

Its playing catchup with MS on the on-line front and Nintendo is proving that you don't need to throw massive GPU performance to be on top, the key - make games FUN - something that the entire industry has forgotten how to do it seems.

 

Add onto this, Sony is currently also facing a 240-280 million dollar loss due to the industry wide Li-On battery recalls and this does not help Sony.

 

Under pricing the console at a greater loss is not going to help pick up its sales, most camps are pretty well set in buying or wanting to buy their respective consoles and until you see PS3's selling for $299-$399, they aren't going to make the needed dent.

 

Last part is developers - too many studio have suffered severely by jumping onto consoles. This time most studio's are waiting for the numbers before jumping into the fray and developing and it seems that many developers are still not looking at the PS3 for its development funding and are eyeing PSP, Wii and XB360 instead.

 

 

 

Curt

[Gregory DG]

I think Nintendo is the only console company left that actually gets it. I've been re-reading Game Over and Yamauchi's philosophy was not to have the best tech no matter the cost (like Sony), but to have the best tech they can get for a cheap price.

 

Sony has let their lead get to their heads. And it looks like it's going to cost them. Meanwhile, Nintendo will sit back with their "last generation" system and laugh all the way to the bank.

Edited May 16, 2007 by Gregory DG

[Shannon]

Whats really the point of a topic like this?

 

To rile up Sony fanboi's over their $600+ gorilla.

 

Note: I DO own a PS3 btw.

Edited May 17, 2007 by Shannon

[Atari5200]

Well, the PS3 is NOT the most expensive console ever released, i'll remind everybody. There were 3 others that were the same or more. And we all know what happened to those 3, 2 of them did ok, while the 3rd bombed, and i'll also remind you that the 3rd, was also marketed as an entire family ENTERTAINMENT system, not just a game system. see any similarities?

 

I'm not saying the PS3 is going to be gone in a year or two, i actually expect it to gain momentum by this time next year, but it's just fun to see kinda how similar the launches were for the PS3 and the ..... CD-I Neither had any real killer games, both used a new form of Media for movies, CD-I used VCD and needed a video card to play the movies and PS3 uses Blu-ray. Shit, the CD-I even had a wireless "wii-mote" of sort. But i think the price eventually did it in, with pressure from the other hardwares of the era. Sony will feel the pressue too, but I don't think it will be enough to do them in like the CD-I.

 

OH and the other 2 systems were Neo-Geo and 3do, the Neo-Geo AES i believe was $499 at launch while the 3do was either $699 or $799, same as the Cd-I.

[8th lutz]

Whats really the point of a topic like this?

 

To rile up Sony fanboi's over their $600+ gorilla.

 

Note: I DO own a PS3 btw.

I am not a fanboy. I haven't been a fanboy in a long time due to the fact I got a 32x for christmas instead of a snes in 1994 because I was a big sega fanboy and I learned my lesson as a result. I do own a ps 1 and ps 2. I posted it not as a troll, but as something big is happening at sony. Remember a month ago, there was rumors about a percentage of sony's game department employees being laid off and crazy ken was kicked out of the company.

 

Sony's gaming deparment lost 2 billion dollars in its fiscal year. That includes Sony's gaming Departments 4 quarter loss of $914 million dollars. A company can handle these types of losses in a year, so long unless your Microsoft. I figured sony was about to take loss due the ps 3 being a launch system, but not this big.

Edited May 17, 2007 by 8th lutz

[Shannon]

lol.. What in the world makes you think I was saying you were a Sony fan-boi 8th lutz?

 

We need to look at it this way. This situation may turn out good for the PSP (more developers).

[Jess Ragan]

That's what I was expecting myself. With the PS3 being as expensive as it is, the PSP will be the only new console Playstation fans can afford. The developers will surely follow their lead.

 

JR

[jboypacman]

Give Sony a year or so and they will hit there stride.This was how the PS1 was and this was how the PS2 was.

 

The PS3 will survive but Sony is going to lose some serious money with it and i do agree with everyone in the fact Sony forgot VideoGames are supposed to fun and affordable.Good luck Sony.

[Gregory DG]

Give Sony a year or so and they will hit there stride.This was how the PS1 was and this was how the PS2 was.

I don't think the competition was the same for those two consoles. The PS1 had the Jaguar, Saturn, N64, and 3D0 to "contend" with. That was a pretty easy battle. The PS2 had the Dreamcast, and a head start on the GameCube and Xbox1. A bit more difficult, but pretty easy. The backwards compatibility and DVD playback (which GameCube lacked) made the PS2 the easy winner.

 

I don't see it to be an "easy" battle for the PS3. The PS1 and PS2 were $300 when they were released, which is $200 cheaper than the base PS3. The Xbox 360 has a pretty good headstart, unlike before. And the Wii... Well, we know it's kicking everyone's @$$ with that low price and quirky games.

 

Again, this isn't going to be easy for Sony. Atari was #1 at one point and look where their arrogance got them.

[Jess Ragan]

There's just too much of a price gap for the Playstation 3 to catch up to its competitors. Even if it turns out that the Wii is a short-lived fad, gamers will default to the well-supported console with the lower price. There's not enough of a difference between the quality of the PS3 and the Xbox 360 to justify the extra two hundred dollars, despite Sony's insistence to the contrary.

 

JR

[n8littlefield]

Well, the PS3 is NOT the most expensive console ever released, i'll remind everybody. There were 3 others that were the same or more. And we all know what happened to those 3, 2 of them did ok, while the 3rd bombed, and i'll also remind you that the 3rd, was also marketed as an entire family ENTERTAINMENT system, not just a game system. see any similarities?

Wait - the two that did OK were the NeoGeo and the 3DO? The Neogeo was a high priced machine that only really sold to a very small niche market - definately not what Sony is looking for. The 3DO was generally a failure as well with the only real system selling software being from EA and even then the support was limited. If the 3DO had done OK we would have seen a followup console. Sony is treading dangerous waters when the best comparison to its launch is to these systems.

 

Of course, the obvious difference is that Sony has a much, much stronger name recognition in the Playstation brand than the other 3. I think the thing that makes me worry the most is the HUGE number of people I know that had Playstation 1 & 2 but switched to the 360 or the Wii this round. I actually would like for all the consoles to do well, more games is always better for a gamer, but Sony really needs to make some moves and do it quickly. Their lineup for the holidays is definately a step in the right direction!

[8th lutz]

lol.. What in the world makes you think I was saying you were a Sony fan-boi 8th lutz?

 

We need to look at it this way. This situation may turn out good for the PSP (more developers).

I was not responding to you as far as being a sony boi. I don't own a psp or a ps 3 by a nintendo ds. I wanted to get the message that I was not a fanboy at all despite owning a wii(thanks to my brother working at kmart).

 

My message to you was the reason I posted it was due to the fact sony not to To rile up Sony fanboi's over their $600+ gorilla, but to inform people of the fact, the fact sony's gaming deparment lost 2 billion dollars in a fiscal year and 913 million dollars in the 4th quarter . If this was nintendo, I would post it too.

 

We all thought that department of sony would would loose a good deal of money in a fiscal year and in a quarter due to the $600+Gorilla, but not the much. There is no way this would happen if the psp was selling software more consistantly.

Edited May 18, 2007 by 8th lutz

[KrazyKaiju]

The PS3 will be fine, Sony will be fine.

 

That made me laugh. In my head I see Stringer sitting in a dark corner of his office rocking back and forth saying, "The PS3 will be fine, Sony will be fine."

 

Seriously though, from the press releases, Sony seems to think that they can make due with the PS3 architecture for the next ten years. By the time their costs hit the break even point to match the Wii's $250 price, we'll likely be into the 8th generation. What are they going to do when Microsoft comes out in 3 or 4 years with the 640 or Nintendo with the Super Wii? I can see the Atari 7800 happening all over again.

[cimerians]

Whats really the point of a topic like this?

 

To rile up Sony fanboi's over their $600+ gorilla.

 

Note: I DO own a PS3 btw.

 

I agree my 600 pound gorilla beats the crap out of my 360 pound monkey.....

 

 

One cool thing though is there are a buttload of cool PSP games coming out including Castlevania (Rondo versio), Final Fantasy Tactics, Final Fanstasy 1 & 2 and of course a huge collection of classics. I just picked up the Atari Activision Hits and I've been hooked the last few weeks.

 

I could care less if Sony dies or Nintendo or Micro$oft....just let me eat up some good games.

[Shannon]

Anybody try the play psp games on your ps3 thingie? I've been too cheap to do it just yet. Been trying to avoid spending any unecessary money at the momemnt.

[cimerians]

Yup, I wanted to try it and I downloaded Wipeout directly to the PS3. Its perfect. The best thing about it of course is that you dont have to get up search for a ps1 game and stick the game in the PS3 to play. Just plays right off the hardrive. And if I want I could hook up my PSP to the PS3 and transfer the game onto it and play the game on the PSP.

 

Only problem is Sony is super slow releasing PS1 games.....(topic I posted on the PS3 thread)

 

----unless you mean actual PSP games on the PS3? Never heard of that....

Edited May 19, 2007 by cimerians

[Shannon]

Yeah I meant ps1 games... Slight typo there er...