Sony is bleeding money - business strategy discussion
- Thread starter -tkf-
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http://www.joystiq.com/2013/11/06/playstation-3-up-to-80-million-consoles-shipped-worldwide/
You can probably use that to work out the PS2/PS3 split. November 4th last year was 70million PS3.
You can probably use that to work out the PS2/PS3 split. November 4th last year was 70million PS3.
Sony Downgraded to ‘Junk’ Status, Shares Fall
Wonder how this will effect Sony in financing future endeavors?
Wonder how this will effect Sony in financing future endeavors?
D
Deleted member 11852
Guest
Perhaps not at all. Typically there are two types of investors, those who want a share in the company (so the share price matters) and those that want a return on their investment (where the hare price is largely irrelevant, only the profitability of the venture matters).
So 6th February for their Q3 figures.
It won't change anything; They want Sony to sell off divisions instead of turning them around, typical short term investor mentality.
Sony is an enormous company with several struggling divisions, turning them around takes time.
Maybe now with the really high sales of the PS4 and so on, it's the perfect time to buy some stock.
Was thinking the same but looking at their stock price now, it seems like investor are not thinking the same. Everyone just want short term profit or expect every company to be have Apple level of revenue to consider good. Even though Apple stocks fell after they release 13.1 billions net income from last quarter.
Sony lost over a billion dollars this last quarter. Perhaps Microsoft should just buy Sony out, and take over the PlayStation division. Sony is in sad financial shape. They have lost insane amounts of money year after year. Perhaps its time to cut the losses, and sell off the divisions that still hold value.
This isn't the type of discussion that belongs in this topic. (MOD: Moved posts) Entertaining ideas of company A purchasing company B has little to do with sales.
As for the sales aspect of Sony overall and how bad things are. Yes, things are bad but it may just be possible to turn things around and the PS4 is just the thing that will do it. If Sony's making a profit on each unit sold and continues selling as decently as they are then PS4 overall should start seeing decent sized profits. Whether this ends up being enough to cover the rest of the company remains to be seen. But don't think for one instant that Sony's not putting its all into the PS4, it really is the one single product that can save them.
Why would they sell off divisions that hold value? Japan is not North America, a company like Sony essentially has the backing of the Japanese government and the benefit of a very good saving rate to offset the risk needed to stay in business. Sony will continue to look to align their various divisions in ways that are strategic and selling divisions which are not profitable to strategic partners, investors and speculators.
Sony won't likely engage in a price war with MS due to a variety of factors but they don't need to either. MS will likely do better this holiday in NA but WW I think things will actually get worse. Perhaps the XB1 puts up some respectable numbers in UK this holiday but I'd be very surprised if they do so anywhere else.
People hoping Sony first party software developers get axed, wondering out loud why anyone would by a PS4 or questioning if Sony is needed (not saying you did) are in for some disappointment.
Why would MS want to buy a company that'd lose them a billion dollars a year??
Billy Idol
Legend
I am really not surprised about Sony losing money every single year.
Witnessing Sony's full incompetence regarding PS4 software/PSN...the surprising thing for me is that they still live as a company?!?
Witnessing Sony's full incompetence regarding PS4 software/PSN...the surprising thing for me is that they still live as a company?!?
What?!?
There are problems, of course, at least I'm reading about it from time to time. But so far I personally experience one (1) single problem with PSN service/PS4 software which is DriveClub's lack of proper online. And it is exaggerated by wide marigin.
Also, those kinds of problems are not uncommon for Sony competitors.
There are enough Sony branches than can be criticized (i.e. mobile, TV, camera, film industry) but Playstation services/software as a whole are not one of them.
Ot but IF the Playstation division were ever to go on sales I would think that the most natural candidate for the buy out should be Nintendo:
Sony has a lot of what Nintendo lacks and it is true the other way around.
Wrt to (Japanese) politics too, it would preserve a relevant national company and a succesfully managed blend of both Nintendo and Playstation would create a giant quite dominanting force in gaming realm.
Sony has a lot of what Nintendo lacks and it is true the other way around.
Wrt to (Japanese) politics too, it would preserve a relevant national company and a succesfully managed blend of both Nintendo and Playstation would create a giant quite dominanting force in gaming realm.
I'ld just leave it as the status quo, the gaming division is already profitable and the ps4 is in its first year, Im thinking thats even better than the ps2, yes mobile is losing lots but who's to say in 6 years time with PS5 perhaps the gaming division will be losing money and mobile will be covering its loses. what sony need to do is advertise, there phones are arguably better than samsungs/apples yet noone knows about them
D
Deleted member 11852
Guest
They definitely aren't gong to do this voluntarily. Sony' single largest investor is a hedge fund manager called Daniel Loeb, who has been trying to get Sony to split off and sell PlayStation for a while now.
It's not in their interest because apart from the PlayStation 3 years, PlayStation has been one of Sony's strongest consumer brands and most profitable divisions. Kaz Hirai has gone on the record as saying he expects PlayStation 4 to exceed the profitability of PlayStation 2 and the way they are going, he could be right.
The company just need to continue to do what they are doing, re-organisating the salvageable business and selling or dumping those which aren't worth it. Personally I think Sony can do without the distraction of making tablets and phones. PlayStation, Sony Music, Sony Studios (movies), their professional broadcast division, and their insurance and financial divisions are all turning a profit. Their stock has been stable for more than a year now, after years of turbluent decline.
Ironically Microsoft's current and future business probably heave more synergy with Sony's businesses than Nintendo and I couldn't see a Sony Nintendo merger getting approved by Japan's Ministry of Trade, not unless Sony was already dead.
I just don't understand this reasoning. Why sell of the bit of your company that makes money and hang onto all the unprofitable bits? Surely the sensible thing to do if you're going to downsize is to eject the dead weight and keep the profitable sides? Especially a brand as big as PlayStation.
To eliminate the conglomerate discount and let the game division to be properly valued.
I am not talking a sell off (may be spin off is the wrong term). I am talking more about an equity carve out. The parent company still maintains a controlling stake but the game division exists as its own public company with a higher valuation.
You end with a healthy company with its own management and board. The parent's management can have a tighter focus benefiting other divisions. Plus, the game division would be somewhat isolated from internal strife and competing with other divisions for capital and attention.
If this had been done during the PS2 era, the PS3 may have never been overburden with the high BOM due to Bluray which was the technology of another division.
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