Sony Revises 2011 Loss Projections

[Metal Ghost]

Update to the thread that Nuclear Pacman started here (thanks NP). Only starting a new thread in order for the title to be more open-ended.

 

As reported on Engadget: Sony revises projections, sees $6.4 Billion Net Loss for 2011

 

This newest loss projection for 2011 is more than double what the company projected in February.

 

Silver Lining: They're making money in the US however, compared to a US loss of $1.16B last year.

[ninjarabbit]

I guess we won't see a PS4 anytime soon since thye can't afford to take a massive loss on a new console, espeically given how the PS Vita has been bombing and even being outsold by the PSP in Japan.

[StanJr]

The era of Sony as the gaming platform is over. M$ took that title with the 360. Sony may go the way of SEGA. The question is: who is the next party to step up and complete the triad?

[Mord]

The era of Sony as the gaming platform is over. M$ took that title with the 360. Sony may go the way of SEGA. The question is: who is the next party to step up and complete the triad?

 

As mentioned when this story hit slashdot, with people immediately making the same assumptions about the video game line's future, news of this increase also accompanied plans for Sony to cut like 10,000 jobs - these jobs being in departments that aren't profitable at all (their chemical production division and various LCD divisions etc)

 

I would expect Sony to continue on with another game console, but I doubt they will be spending billions of dollars to make some customized chip in the process. I'd say the rumors of the next gen consoles going x86 based are very likely. They'd just better hope they have a strong following of gamers still by the time the ps4 launches.

 

We've been fortunate imo, overall, to have a triad of consoles going for the last few generations but I don't see it as a given that another company would step up to take over a potential demise of one of the current three.

[BillyHW]

The launch price of the PS3 was absolutely ridiculous. And trying to ram Blu-Ray down everybody's throat just wasn't very nice of them.

[Mord]

The launch price of the PS3 was absolutely ridiculous. And trying to ram Blu-Ray down everybody's throat just wasn't very nice of them.

 

Honestly I wouldn't put it past them trying to pass the same price tag on a PS4 launch console as well, regardless of how off-the-shelf the parts end up being.

[godslabrat]

We've been fortunate imo, overall, to have a triad of consoles going for the last few generations but I don't see it as a given that another company would step up to take over a potential demise of one of the current three.

 

In the past, I've taken a lot of flack for my opinion of Sony as a market leader. In short, I don't think they dominate as well as popular opinion suggests. Two reasons:

 

1) The PS and PS2 were both able to hit the market at a time when there was no meaningful competition. Nintendo and Sega both made mistakes that kept them from being serious threats to the top spot. The PS3 was the first Playstation console that launched against two strong rivals, and I'd say it's performance isn't a matter of Sony faltering, so much as it is the realistic outcome of a solid system against two other solid systems.

 

2) I've never really accepted the theory that the market was big enough for three equally dominant systems. The original xbox only survived because MS could afford to take a massive loss, it wasn't a financial success in its own generation. The PS3 had a similar role for Sony, who took losses on its hardware in order to push the BluRay movie format. I think now we're seeing signs that the big three companies can no longer afford to support a system that's a money-losing Trojan Horse, and that again begs the question of if the market as a whole can support three consoles. I'm strongly inclined to say no, it cannot.

 

If one of the Big Three companies goes down, I'd think the other two would fill the void. There wouldn't suddenly be a new contender for the #3 spot. At most, a company like Apple or Steam might slip in and market a low-budget, no-hassle box, but they'd be grabbing for the crumbs instead of taking a bigger slice of the pie.

[Cybergoth]

I guess we won't see a PS4 anytime soon since thye can't afford to take a massive loss on a new console, espeically given how the PS Vita has been bombing and even being outsold by the PSP in Japan.

 

Our local games store has 5 copies of "Little Deviants" and another 5 of "Uncharted" on the shelves, so I'm doubting the Vita does any better in Europe...

[ninjarabbit]

The PS3 has multiple issues.

 

First was that it was simply overpriced when it debuted. No system priced over $300 at launched has been sucessful (the 360 had the core model at $300 at launch). Second was that the early marketing for it was horrible and turned people off, especially with the 360 and Wii right there with lower price points. Third was that it simply lacks AAA exclusive titles when compared to the PS1, PS2, 360, and Wii. Fourth is that the PSN just isn't that great given the download times with manditory downloads and security breaches. Fifth is that the hardware is a pain to program for compared to the 360 and Wii. Sixth is that right now Sony lacks the deep pockets that MS and Nintendo has right now. Seventh is the constant hardware redesigns, it's created a lot of confusion in the marketplace.

 

All this stuff combined means it's no wonder that the PS3 is the 3rd place console.

[Starscream]

I'd say the PS3 has struggled mainly because it was more evolutionary than revolutionary. Sony played it safe with the main focus on faster processing speed, better graphics, Blu Ray, and High Def. Nintendo grabbed lots of attention because they marketed the wii very well, made it inexpensive, and back to basics fun ( not to me but who am I?). MS had the life of the console mapped out before release, was riding on the great success of Live, had intentions to make the 360 an entertainment device, keep it fresh with new dashes and features and bring in the games in a unified social environment. Sony seemed to be the only one who didn't realize the a graphics bump just won't cut it anymore. The PSP and the Vita were answers to questions that nobody asked and both were released at points when games were being played in new interfaces (phones, tablets, facebook, etc). Again, both handhelds really went for graphics more than anything.

 

Microsoft entering gaming has been the best thing to happen to games in the last decade IMO. It obvious that Sony and Nintendo can't grasp too much beyond graphics or simplicity, and with few exceptions, haven't provided the means for games to grow. At some point, MS will shit the bed just like everyone else has and we will be discussing everything they've done wrong. Hope things turn around for Sony though, it's kinda nice having them around.

[Atari Hacker]

One reason that I think that the ps3 isn't doing as well as the other consoles is because that the ps3 was "bland" compared to the other consoles. Think about it, the xbox 360 targeted what people liked about the original xbox, xbox live. They've built it up very well and I think it's one of the best online services ever made.

 

Nintendo corrected it's mistake of the gamecube. The gamecube failed because it was the "bland" console. Nintendo built the wii completely different, and it payed off.

 

The ps3 is basically and upgraded ps2. The ps3 had blue ray, the ps2 had dvds. The ps3 had psn, the ps2 had third party controlled online services. The ps3 had better graphics than the ps2, the ps2 had better graphics than the ps1. The ps3 had dualshock 3, the ps2 had dual shock 2 (the only difference is wireless connectivity, and ps home button)

 

Anyone see where i'm goin with this?

Edited July 15, 2012 by Atari Hacker

[Austin]

*yawn*

 

More generalizations, heh.

[cimerians]

Microsoft sucks.

 

[AtariLeaf]

Not being much of a modern gamer, I can only state my own opinion that the current generation is drowning in a sea of uninspired retreads much the same as 1983 but instead of pacman style maze games or galaxian style shooters its FPS's with a smattering of adventure, RPG's and the odd racer.

 

The best and most original games seem to be on phones and other handheld devices such as tablets. I know its a bad word but casual gaming seems to be making a huge comeback both because of price and ease of pickup and playability.

 

I sense that if the next generation of consoles is simply more graphical updates of Halo and Call of Duty then only the most dedicated hardcore gamers will be interested and I have to think that even they must get sick of paying $60+ a pop to look at the same damn gunsights all the time.

[akator]

[rant]

 

Sony made actual money last year. Companies make projections about their profits to make the stock market and investors happy. Nothing is based on the the actual earnings of a company, because that would destroy the gambling nature of the stock market. This is the same corporate BS that is killing every economy, and especially in the US.

 

When a company still makes a profit, when that isn't the profit that was "forecast," everything goes down the toilet. There are thousands of examples of how companies are still profitable, yet because their profits don't meet the exponentially increasing demand from stockholders, that they have a "loss." There wasn't a loss, they simply didn't meet expectations, and in the markets that is a "loss."

 

I don't consider my lottery ticket to be be future income, then not win the lottery, and declare a loss.

 

Sony still makes plenty of money. So do most companies that declare a "loss." The problem is that they can't have ever increasing profits every year, which modern stock markets demand. That economic model is flawed from the start, because it would require equal inflation of income and everything else so that the masses could continue to consume more and more and pay more and more.

 

For example:

• $100 profit in year 1, estimate 15% profit
  
• $115 in year 2, estimated %16 profit for next year or stock tanks
  
• $133 in year 3, estimated %17 profit for next year or stock tanks
  
• $156 in year 4, estimated %18 profit for next year or stock tanks
  
• $184 in year 5, estimated %19 profit for next year or stock tanks
  
• etc.
  

So... every company is expected to see ever growing profits... which are completely unsustainable. It is mathematically impossible for this kind of economics to exist, because within 2 decades all companies would have all currency in the entire world, with nothing left for governments or the population. Unless consumers see equal inflationary increases in pay, to buy all of shit that these companies sell at ever increased prices, there is no way for this economic model to work.

 

This economic model is unsustainable, and no one (party, group, country, etc.) has even suggested the most minor solutions to resolve any of the problems.

 

[/rant]

[onlysublime]

wow... just.... wow... you apparently didn't read the Sony financial reports:

 

http://www.sony.net/SonyInfo/IR/financial/ar/2012/financial/

 

You can google what some of these terms mean because you apparently don't understand what a loss is. Sony is in dire shape and being in denial doesn't help. They had a market cap of $200 billion in 2001. Sony has a current market cap of $12.7 billion.

 

Heck, Samsung can outright buy Sony. Nintendo can with creative financing. Microsoft and Apple would pull change out of their pockets to buy Sony (but of course, no one would with all the heavy debt that Sony has).

[Andromeda Stardust]

People claim that Sony Playstation was overpriced, but at the time of launch, it was the cheapest Blu-Ray player on the market, and a lot of people bought it just for that. Also, 99% of the original XBox 360s eventually succumbed to the "Red Ring of Death", and the 1% that didn't fail obviously haven't been played much. I finally bought a slim when the price dropped to $300. I also bought Little Big Planet, 3D Dot Heroes, and a bunch of Blu-Ray movies. But the vast majority of my loyalty for cuurrent generation goes to Nintendo. MS and Sony admitted defeat when they both tried to copy Nintendo's motion control system. Also bear in mind that while Xbox360 was hugely successful in the states, it was a commercial failure in Japan, shich is not surprising since, like Atari, MS is an American company. Quite frankly, FPS games suck. What ever happened to the good old days of blasting alien invaders and stomping Goombas? There's a company that still make those games (well, at least the Goomba part, anyway); it's called "Nintendo."

[chrisballer]

I feel that Sony will bounce back and be just fine. Having said that, I am one of the people who love the 360, but it broke a couple months ago. However, I have had a PS3 since the MGS4 pack came out, and only had two games for it until my 360 died. It was mostly just my Blu-ray player. Now that I have given the PS3 a chance I am really liking it, and buying a bunch of titles for it that I missed out on. I think with future price cuts along with many more years (I am guessing) in its life cyle they will make up some of their lost profit down the road. Furthermore, I feel the PS3 is getting a great deal better with their online games and store for that matter.

 

As for the Vita, I think what is hurting it so far is that the game library just like most new systems is lacking still. It is for me anyway. I will purchse one probably by the end of the year. I have also noticed that there are many new PSP's that are getting price cuts around me, and that could be taking away from the Vita. For example, I walked into my local K-mart the other day and was looking at the games. I looked down to see the Vita and right next to it were a buch of clearanced PSP bundle packs for $104. Then I turned around and saw a ton of PSP games for cheap. I immediately thought of buying the PSP for the price, and an entire library I have yet to experience. I am sure I am not the only one with this thought.