2014 Update: Sony's losses DOWN from $5.7 to $2 billion!

[Skykid]

:The yearly fiscal updates have now been consolidated in the OP:


2014

Time for the annual update on Sony's total operating losses!

Thanks to strong PS4 sales the loss deficit has been greatly curbed this year, with the games division now by far the strongest arm of the company. No-one could really have predicted just quite how well the PS4 would do, largely thanks to Microsoft's enormous pre-launch gaffes giving Sony a nice vacant spotlight.

Unfortunately losses in the handheld sector have taken some of the celebration out of the PS4 sales, leaving the company forecasting...

*drumroll*

...Total operating losses of £1.2 Billion or just under $2 Billion dollars approx. But considering that's up from $5.7 billion last year the PS4 has done incredible things to soften the blows caused by mobile, PC and TV division losses.

Forecast for next year: turning a profit still unlikely.



2013

It's that time of year again folks! Christmas is coming and Sony's forecasts are in, this time slashing operating profit predictions by 40%.

News in on 1st November, although it's mainly (again) down to losses in the consumer electronics department and getting royally fucked up at Sony Pictures over the ENORMOUS FLOPPY WHITE HOUSE DOWN. Jamie Foxx didn't spare them a penny, apparently.

http://m.bbc.co.uk/news/business-24753856

Game division profits sucking nuts too, according to reports:

http://www.vg247.com/2013/10/31/sony-fi ... s-slashed/

This real kick in the nuts is for the Sony shareholders however, who have lost $100 billion collectively since 2000 according to Bloomberg, who label the company a "chronic underperformer".

http://mobile.bloomberg.com/news/2013-0 ... l-m-a.html

Predictions for next year folks?

Image

Pain.



2012

Figures released as $5.7 Billion in losses for the financial year ending March 2012, now doubled from the previous financial year.
Sony blame their TV division which hasn't turned a profit in 8 years, and are now partnering with rival Panasonic to try to get back into the top 2 manufacturers in the market.

Shareholders are shitting themselves as there are no positive signs for the rest of the year's forecast. Sony has announced it's looking for a new primary focus outside of videogaming.

The full report was on the BBC's Asia business report tonight, but sources and excerpts can be found here.






Stuff from the previous 2012 thread discussion:

Based on their financial situation, I imagine PS4 (or whatever it turns out to be) will need to be a radical departure from former strategies if they're looking for a new cash cow in the gaming sector. I don't personally believe they will attempt to rely on the same multimedia hook this time around, especially as there's nothing to replace Blu-Ray.

I reckon Sony will try to emulate the Apple Eco-System with PS4: heavy on apps, social media, downloadable functionality and all that other crap people are buying at the moment. any ideas?

[Blackbird]

If Sony wants to be successful, they need to stop crapping all over their consumers and build a safe, stable multiplayer platform. Multiplayer is where the mainstream gamers are (and for corporate purposes, the money), and XBox Live has the market dominated right now. So long as Sony has a reputation as the hacker's whipping boy, I doubt the situation will change and Sony's games will be irrelevant to one of the core gaming demographics.

[CMoon]

Is Microsoft doing any better with their Xbox, or can they just outlast Sony because of their stranglehold on the PC market?

[EmperorIng]

Which is amazing when you consider how the 360 is by all standards an inferior product to the PS3, and Xbox Live is horrible, but yet that somehow did better.
FPSes I guess?

[Op Intensify]

I don't personally believe they will attempt to rely on the same multimedia hook this time around, especially as there's nothing to replace Blu-Ray.

If they really want to set themselves up for disaster they could use the PS4 to push the HVD format.

Which is amazing when you consider how the 360 is by all standards an inferior product to the PS3, and Xbox Live is horrible

Wrong and wrong. 360 has more memory than the PS3, though it has less processing power. This is why some cutscenes in Ninja Gaiden II have a lot more background characters than in Sigma 2, and why the double armadillo boss fight was cut from Sigma 2. Also, Xbox Live has far more robust options for communication and group multiplayer, and games tend to have less latency, though obviously you have to pay for it.

[louisg]

Which is amazing when you consider how the 360 is by all standards an inferior product to the PS3, and Xbox Live is horrible

Wrong and wrong. 360 has more memory than the PS3, though it has less processing power. This is why some cutscenes in Ninja Gaiden II have a lot more background characters than in Sigma 2, and why the double armadillo boss fight was cut from Sigma 2. Also, Xbox Live has far more robust options for communication and group multiplayer, and games tend to have less latency, though obviously you have to pay for it.

360 also wasn't $600 at launch. Hell, I was looking at maybe getting a newer game console the other day, and didn't realize the PS3 was *still* 300. Craziness. A console which can be sold for a competitive amount of money should factor into what constitutes good design IMO.

[GaijinPunch]

It is no secret: If you're a Japanese company and you make TVs, you're going to lose money hand over fist. Samsung and LG are taking corn-riddled shits all over everyone right now.

I think you're right in that the next iteration will be app-driven. My guess is the BR drive will be for movies only.

My other forecast is that I won't buy one. I have barely gotten my 40,000 yen worth out of my PS3 after about 3 years.

[Kaiser]

My other forecast is that I won't buy one. I have barely gotten my 40,000 yen worth out of my PS3 after about 3 years.

Nearly 4 years here and same, while I have a hefty library of 60-65 games, to be honest... I would be better off with portables like PSP/DS for Jrpgs (I hate the lack of them on big consoles today), I didn't expect that everyone would jump on the handheld bandwagon in Japan, oh well. Rest assured, Persona 5 WILL BE a vita exclusive since SMT4 was announced to be a 3DS exclusive.

[brentsg]

Clearly Sony should have come out with 3D TVs or something.

[Friendly]

Is Microsoft doing any better with their Xbox, or can they just outlast Sony because of their stranglehold on the PC market?

Microsoft is still deeply in the red with Xbox/Xbox 360. Too lazy to look it up now, but iirc MS lost in excess of $4 Billion US dollars with Xbox 1 (some sources claim $7 Billion). I don't remember how much developement of 360 and initially selling it at a loss cost them, but it's certainly another couple of billion; the RRoD fiasco cost them about $1 Billion. Microsoft's Xbox division continued to generate losses for years after the launch of 360. They lost $1.9 Billion in 2006; by 2008 the total losses since 2001 amounted to $7 Billion USD according to an Information Week report from 2009, which seems like a conservative estimate. I think Microsoft posted their first (small) annual Xbox 360 profits around 2010/11. However, they also spent half a Billion USD to market Kinect and in the first 3 months of 2012 alone they lost $229 Million USD due to rapidly declining 360 sales (Sony's PS3 has been outselling Xbox 360 on a global scale anually for the past 3-4 years).
However, thanks to their virtual PC monopoly with Windows and MS Office, Microsoft has amassed close to $60 Billion USD in cash reserves. So even if the Xbox division cost them 8 or 10 Billion dollars since 2001, that's peanuts for Microsoft. They can continue this for a long time.

[Op Intensify]

I would recommend giving this article a good read for deeper insight on the subject of the declining prominence of gaming consoles.

[Aliquantic]

in the first 3 months of 2012 alone they lost $229 Million USD due to rapidly declining 360 sales (Sony's PS3 has been outselling Xbox 360 on a global scale anually for the past 3-4 years).

I assume Windows Phone should be included in those figures as well as part of the Devices & Entertainment division? It does an excellent job of dragging down the bottom line too! It's worrying though if Microsoft still can't turn a profit (let alone a meaningful one) despite their income from XBL...

[Kaiser]

I would recommend giving this article a good read for deeper insight on the subject of the declining prominence of gaming consoles.

Thanks for a great link, it was an awesome and an in-depth look on today's industry.

[Skykid]

Is Microsoft doing any better with their Xbox, or can they just outlast Sony because of their stranglehold on the PC market?

Not sure. I think M$ are financially comfortable even though the console market is in decline - but Apple's still taken a huge bite out of their revenues in both PC and gaming areas.

I would recommend giving this article a good read for deeper insight on the subject of the declining prominence of gaming consoles.

Good essay, I enjoyed. All sad but true, too. It may as well be an article on the unsustainable nature of capitalism, since it outlines the same old patterns of corporate growth eventually eating its own market.

I think PS4 (and 360) would be a bit mental not to go with pure digital distribution for the next console release. A better competitive strategy would be a reasonably priced product shipped with a 500GB HD and several free games pre-installed that rely on DLC features to expand the experience.

I'm still struggling to see how having an App based market on a home console would work effectively (I consider the main draw of the app setup being portability) but I'm sure they'll think of something.

Wii U is probably dead in the water unless Nintendo can work miracles, and unless MS/Sony radically change their approach I don't see kiddies giving up free games on smartphones for expensive consoles and clunky physical media.

[Op Intensify]

I think PS4 (and 360) would be a bit mental not to go with pure digital distribution for the next console release.

Not going to happen. Not yet, at least. Retailers hated the download-only PSP Go, stocking as few units as possible and actively discouraging customers from buying it. It was a complete failure for that reason. MS and Sony still need to stay on good terms with retailers to sell hardware.

[ancestral-knowledge]

I always have the impression that you are rather concerned about this matter skykid. The last thread about videogame sales was made by you too if i remember correctly.

Where lies your concern?
I for myself want this whole industry to crash so there will be room for something new and hopefully better. Customers are treated like idiots now and this will not go on forever. And there are so many good games on the retro consoles... we could play these all time long until our death or until they come up with something new and exciting that is not full of shit.

[Skykid]

Not going to happen. Not yet, at least. Retailers hated the download-only PSP Go, stocking as few units as possible and actively discouraging customers from buying it. It was a complete failure for that reason. MS and Sony still need to stay on good terms with retailers to sell hardware.

Yeah, makes sense. I just see a stagnating market losing out to Apple and Android's DD, so one would assume that was the way to go. I think they already announced the next consoles would continue with physical media though.

I always have the impression that you are rather concerned about this matter skykid. The last thread about videogame sales was made by you too if i remember correctly.

Where lies your concern?
I for myself want this whole industry to crash so there will be room for something new and hopefully better. Customers are treated like idiots now and this will not go on forever. And there are so many good games on the retro consoles... we could play these all time long until our death or until they come up with something new and exciting that is not full of shit.

Yeah, I was going to bump the old thread, but I checked it out and it ended up as 3 pages of arguments about Shenmue and Yakuza, so I figured a new on-topic discussion would make more sense.

No concerns tho, I'm with you when it comes to sentiments for the current industry. The whole nasty entity can go south as far as I care. It's quite sad that it's more interesting to discuss current gen gaming's decline than it is to engage with its software.

[neorichieb1971]

I'm in the way of thinking that Sony think too big sometimes.

The kind of games I would like to play aren't even that expensive to make and I would buy them. But nobody makes them.. But then again nobody else would probably buy them.

I have only Sony TV's in my house and love them. But recently the price of LG and Samsung has come down to a ridiculously low level price point. I love Sony Cameras as well.

Sony should get out of the handheld business pronto. Its just silly to keep on releasing PSP type systems when they don't offer anything but gizmos. They should just release a £600 Samsung Galaxy type of device and be done with it.

Since technology barriers now overlap each other its pretty hard to define your product as unique anymore. The Samsung galaxy S3 does things that are pretty unbelievable.


As for PS4. Its going to be powerful enough that anyone can knock out any type of game with 1080p graphics with just an editor. Therefore the games companies should diversify their field of vision to cater for all types of games players. Its quite possible that the next generation of games will never become out of date graphically. How much high rez can you go?

[Ruldra]

Sooo....how long will the PS4 works before it breaks down? 6 months?

With all the processing power of the PS3, the thing generates an enormous amount of heat and it leads to an early failure. While a Mega Drive or a Nintendo can last decades if taken care of properly, you're lucky if the PS3 lasts for over 2 years.

I assume they're adding even more processing power to the PS4, so it'll generate even more heat. I can't see it working for long.

[mesh control]

Playstation + George Foreman grill = want

[Op Intensify]

With all the processing power of the PS3, the thing generates an enormous amount of heat and it leads to an early failure.

Not the PS3 Slim. That's relatively energy efficient and produces a lot less heat than my fat 360.

Sony should get out of the handheld business pronto.

I'd say they shouldn't. PSP is still popular and profitable in Japan for the moment, though the 3DS is quickly taking its place.

How much high rez can you go?

There's technology in development that allows for displays with resolutions well past 1080p. The only question is whether it's commercially viable, and if the general consumer even cares. We've reached the point now where hardware is "good enough" for most people. Such technology will probably only end up being used for advertising and the like.

[Udderdude]

Gaming is dead, long live gaming.

[Skykid]

I'm in the way of thinking that Sony think too big sometimes.

It's a basic habit for corporate business to grow to unsustainable levels and then falter when it can't afford to effectively maintain growth in all their subsidiaries. Sony peaked as a business in 2004/5 and has been in-decline every year since.

Question: Does anyone reckon Sony and MS will dump their existing branding? I'm wondering if Sony will lose the 'PlayStation' now (it's the longest running videogame brand ever) and do a Nintendo and attempt to launch something fresh with a new angle.

It's a riskier option, and I don't see Sony as a company who like risk: but it could work to their advantage if it's marketed properly.

[Ed Oscuro]

I'm in the way of thinking that Sony think too big sometimes.

For once we agree!

Of course, if they hadn't been thinking too big, we'd never have had the PlayStation to begin with. Their original plans were for it to be a does-everything set-top box, though, which wasn't feasible back in 1994 and Mickey Schulhof's dreams, but it was a nice idea.

[Friendly]

Question: Does anyone reckon Sony and MS will dump their existing branding? I'm wondering if Sony will lose the 'PlayStation' now (it's the longest running videogame brand ever) and do a Nintendo and attempt to launch something fresh with a new angle.

It's a riskier option, and I don't see Sony as a company who like risk: but it could work to their advantage if it's marketed properly.

Are you for real? That's like asking if Coca Cola would drop the Coca Cola name. Sony worked long and hard to create the kind of worldwide brand recognition PlayStation has now. You don't rebrand your most popular products. That's moronic. The same goes for Microsoft's Xbox.

Furthermore you are ignoring that Sony's video game section is their most profitable division; the only time Sony Computer Entertainment bled lots of money was during (and after) the failed launch of PS3.

Suggestion that actually makes sense: If they can't generate profits that way, then maybe Sony should consider to stop making TVs.

[Ruldra]

With all the processing power of the PS3, the thing generates an enormous amount of heat and it leads to an early failure.

Not the PS3 Slim. That's relatively energy efficient and produces a lot less heat than my fat 360.

I own a Slim and it heats to absurd levels. If that's energy efficient nowadays then I don't know what to say.

[Friendly]

With all the processing power of the PS3, the thing generates an enormous amount of heat and it leads to an early failure.

Not the PS3 Slim. That's relatively energy efficient and produces a lot less heat than my fat 360.

I own a Slim and it heats to absurd levels. If that's energy efficient nowadays then I don't know what to say.

You probably have a CECH-200X A/B (X is the number of your region, A = 120GB, B = 250GB), the first slim revision released in September 2009. Those reportedly get hotter than fat 40GB PS3s (while using less power, ~100W).
The models that came afterwards (2100 (~75W) and 2500/2600 (~65W)) got successively cooler with less and less energy consumption. Current slim revision is CECH-3000; haven't heard anything about the heat levels of that one yet, but since it consumes less energy than 2500/2600 (which were nearly identical) it probably doesn't get too hot, either (though it could be slightly louder because it has a smaller fan).

[Skykid]

Are you for real?

It was a real hypothetical question, yes.

Sometimes when success is fading, rebranding can be an incredibly useful way of rebooting your position in a market. Why is it so difficult to digest simple on-topic postulations?

Furthermore you are ignoring that Sony's video game section is their most profitable division; the only time Sony Computer Entertainment bled lots of money was during (and after) the failed launch of PS3.

Are you for real?

The entire point of this thread was borne from a business report that said Sony, after announcing doubled losses of revenue, had told shareholders they're looking for a new primary market to replace videogaming. So yes, I am aware that videogaming is the most profitable aspect of Sony corp, and also aware that's it's not profitable enough.

[Ed Oscuro]

Minor epiphany time:

Sony's sense of synergy seems lacking at the moment, despite my and neorichieb1971's agreement before.

Sony has good, sometimes even class-leading products in many markets, but oftentimes they don't tie together in any obvious way. Yes, Sony has often tripped when it's tried to force synergy (the PlayStation example - it wasn't a coincidence that they bought all those movie studios back at that time) but clearly trying to get its hooks into every little tech market doesn't seem to be working, because along with the successes are many clunkers. Many analysts would like Sony to just give up on many of the less-profitable markets and get back to core competencies, but that seems wasteful given how much knowledge and IP they have available. It might instead be a good time to re-brand some things, or at least to redefine some product lines. But they've tried product differentiation in the PlayStation line before - the PSX didn't do well. That said, I wonder if there wouldn't be a market for an actual DVR which was also a new PlayStation, as well as a more stripped-down "gamer's PS4" holding down the regular line. That would be fairly obvious and perhaps not compelling enough, though. What about a video production PS4 for amateurs? They've tried that before, after all (with a video production MSX2 unit with extra RAM).

[Friendly]

Are you for real?

It was a real hypothetical question, yes.

Sometimes when success is fading, rebranding can be an incredibly useful way of rebooting your position in a market. Why is it so difficult to digest simple on-topic postulations?

Ah, you mean like New Coke.