All purpose Sales and Sales Rumours and Anecdotes [2019 Edition]

[AlNom]

Figure this is as good a time to begin the annual thread anew:
https://www.bloomberg.com/news/arti...-most-since-2016-on-weak-playstation-4-demand

https://www.cnbc.com/2019/02/04/son...amid-worries-its-portfolio-is-in-trouble.html

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So some random thoughts:

"Investors are closely watching the firm's gaming business. That division is the largest contributor to the company's operating income at more than 30 percent."

I feel like this is the sort of thing that could make them be more cautious about spending on next generation in terms of not feeding the egos of internet warriors, and instead again approaching the console budget with Fiscal Responsibility™ ala PS4.

PS4 is somewhat running into a pure sales number issue since they've effectively hit PS3's 8 year sales numbers in the span of ~5. That's a bit of a problem for growth as it is becoming very difficult to cost reduce, and well, maybe the bean counters took a look at the PS3 sales data post-2013, and it just wouldn't be realistic to expect the same legs as PS2 to taper off the generation. So how much more could they expect to grow the userbase even with a meager price reduction?

Furthermore, that's the sort of very long term planning that may have implications for next generation - assuming they similarly sell very well, and there's no particular good reason to think otherwise for the time being - in that sense, how much do they *really* need to spend to sell to their considerable fanbase when it's about hitting that sweet spot.

Someone with more knowledge about the projections for global economy or just big markets such as the US or UK (*ahem*) might chime in about possible consumer spending habits (although certainly in rough times, the need to be entertained is much higher).

Sony could just pour more effort into 4Pro now that their plans have been pushed back, and perhaps it would actually be worthwhile to shift to 7nm since there can be overlap in sales between 4Pro and existing PS4 owners, not just trying to find new folks to sell to beyond the 90 million mark. The next question is how long that lasts and how it might fit into the next gen transition may or may not be tricky considering the nature of 4Pro's price point.

R&D for 7nm could be amortized to some extent between 4ProSlim and 4SKim anyway. We've discussed elsewhere the implications and possibilities for switching memory types as well.

/rant

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2018 thread

 

[wco81]

Or if sales are slowing down, maybe they're more inclined to accelerate the release of the next gen.

But they need to demonstrate a noticeable jump for people to buy.

 

[AlNom]

Indeed. That's exactly how 2019 would have made sense as "accelerating". 2019 would have been striking while their sales were beginning to dwindle as they already reached the 90M+ mark much faster than PS3 (for instance). Thought I wrote it in there, but that's what I was leading up to with the sales-growth problem.

I had a bunch of things scribbled elsewhere that shall not be named. The problem now is that their plans have been pushed back, so what they do instead is what all my drivel about 4Pro, 7nm etc. is aboot.

It's a moot point to discuss acceleration because that's no longer happening.

The other thing that's concerning (brought up in a different thread) is that a compressed schedule would have had obvious implications to the nature of the HW spec in line with the expected price. How much they can change at this point would be.... curious, given the amount of extant planning required from top to bottom for silicon and software support, though at the very least, there are implications where yields are improved over time.

The best case scenario is that they had a plan B, but that's difficult to speculate (or hope) based on practically nothing at this point in time.

 

[MrFox]

Gaming division revenue up 10% YoY.
But the division profit dropped 14% YoY.

Uh.. Next gen investment impact, and they said they were accelerating PSNow deployment? Should it start being visible in the financials now or is the r&d investment usually showing up earlier or later or just invisible? Different columns?

Right now we should be somewhere equivalent to early 2012, comparatively to ps4 launch.

 

[Deleted member 11852]

Uh.. Next gen investment impact, and they said they were accelerating PSNow deployment? Should it start being visible in the financials now or is the r&d investment usually showing up earlier or later or just invisible? Different columns?

PSNow is in the most expensive server resource deployment stage which contributes toward the apparanent revenue/profit discrepancy beyond the global economic slowdown. Plus PS5 has to eating through significant money at this stage. What Sony is paying AMD is not pocket change and it's coming from somewhere.

 

[AlNom]

What Sony is paying AMD is not pocket change and it's coming from somewhere.

Damn, what if Trump is involved.

Spoiler

Sorry.

 

[DieH@rd]

"All Purpose Sales"

 

[Xbat]

I seriously don't understand these analysts and the way investors react to the news, it all come across as bullshit to me.

The numbers seemed fantastic to me considering the age of the console. It comes across as market manipulation to me. Let's spout some shit to lower the share price and then spout some other shit to raise it later.

Same thing happens to the currency of the country I live in. It gets stronger for no reason before some speech by the finance minister that everyone knows (with half a brain) is not going to have some magic policies announced just for it to get weaker when these magic policies are not announced.

 

[iroboto]

I seriously don't understand these analysts and the way investors react to the news, it all come across as bullshit to me.

The numbers seemed fantastic to me considering the age of the console. It comes across as market manipulation to me. Let's spout some shit to lower the share price and then spout some other shit to raise it later.

Same thing happens to the currency of the country I live in. It gets stronger for no reason before some speech by the finance minister that everyone knows (with half a brain) is not going to have some magic policies announced just for it to get weaker when these magic policies are not announced.

You have a business. To keep it afloat you need 2000 a month. Your biggest seller used to make 2800 a month but now makes 2200 a month. Way above the competitors. The remaining of your business is no longer pulling its weight and now you’re down an additional 600 per month. Overall you’re in the red 400 a month.

Analysts are worried because the largest source of income can no longer keep the whole company afloat and if it’s downturn time, as in PS4 has peaked already, they can only expected Revenues to decline further. Next year their expecting now to be in the red 600 or 800 per month. They can see how much free cash flow they have. They can see how much hey have in reserves. It doesn’t matter how great PS4 is selling relative to the past, to their competitors. All eggs 1 basket, and those eggs aren’t enough anymore.

 

[Xbat]

I actually have a business and expecting growth all the time is one of the major problems I have with this. You can still be healthy when you have had a quarter that was down on previous quarters. The whole the world is ending if you haven't grown by whatever percentage is a manipulation of sentiment.

Obviously they going to have more costs and less growth during a transition in fact they probably have never had it as good during the transition phase, speaking about the PlayStation division.

 

[iroboto]

I actually have a business and expecting growth all the time is one of the major problems I have with this. You can still be healthy when you have had a quarter that was down on previous quarters. The whole the world is ending if you haven't grown by whatever percentage is a manipulation of sentiment.

Obviously they going to have more costs and less growth during a transition in fact they probably have never had it as good during the transition phase, speaking about the PlayStation division.

No one disagrees with that sentiment. I think the idea of constant growth is largely what leads to failure, among other things, climate change. This is why capitalism flies directly in the opposite direction of any form of conservationism movement - to obtain more profit requires significant consumption.

Their concern is that they don't see 4Pro and PSVR bolstering the sales as much as they should have, but further more

Overall, Constellation Research's Wang said, Sony's content — including movies — remains "the brightest spot" and its cameras business "is still growing."

But, he said, the company still needs "a content, network, and tech strategy in order to create vertically integrated markets."

Which pretty much indicates to them not to expect any significant growth or profitability until PS5 is released.
ie. it sounds like the messaging to me is: do you want to sit on a declining stock for 2 years before it goes back up.

 

[Globalisateur]

"All Purpose Sales"

Nope. That was on purpose. Look who's started the thread.

 

[AlNom]

boo-urns

 

[Deleted member 11852]

I actually have a business and expecting growth all the time is one of the major problems I have with this. You can still be healthy when you have had a quarter that was down on previous quarters. The whole the world is ending if you haven't grown by whatever percentage is a manipulation of sentiment.

Analysts are generally not there to provide an impartial assessment of the financial viability of a company, they are driven by clients (investors) who can only make (or lose) money when there is movement to stock prices. Regardless of the actual situation, they need to spur stock speculation to make this happen. If you're not actively growing, you're dead to analysts - unless they think you'll boom later in which case analyst speculation can cause stock to tumble so it can be bought cheaper and sold higher for profit when you later boom.

It's largely a nonsense. There are some good, sound analysts but not enough.

 

[Silent_Buddha]

I actually have a business and expecting growth all the time is one of the major problems I have with this. You can still be healthy when you have had a quarter that was down on previous quarters. The whole the world is ending if you haven't grown by whatever percentage is a manipulation of sentiment.

Obviously they going to have more costs and less growth during a transition in fact they probably have never had it as good during the transition phase, speaking about the PlayStation division.

That's the drawback of being a publicly traded company. You no longer have the luxury of not growing. As DSoup said, it's now about the investors rather than company health (although that's still important to a degree). And investors only care about growth and/or potential for growth. And sometimes the potential for growth vastly outweighs actual growth (Tesla corp. for example, although they are finally starting to post some meagre profits).

And in the case of a company like Sony, it doesn't matter how well one part of the company is doing, if there's the potential that it's not enough to offset any underperforming parts of the company to keep the company growing.

I think a great poster child of how the benefits of being publicly traded aren't worth the downsides is Dell. They were head and shoulders above the competition prior to their IPO. Then due to the influence of investors on stock prices and company leadership, the company slowly lost its identity, lost it's lead, lost consumer confidence, and ultimately started to struggle despite still pulling in quite a bit of revenue.

Now that it is a private company again, Dell is doing significantly better, albeit still not to the extent before their reputation was tarnished when they were publicly traded.

Regards,
SB

 

[tuna]

The stock market is usually not for the benefit of the company as an organization, but the owners of the company.

 

[chris1515]

https://www.smh.com.au/technology/h...panding-players-horizons-20190212-p50x9h.html

Not number of sales but Gamepass number and they looks good.

 

[Silent_Buddha]

https://www.smh.com.au/technology/h...panding-players-horizons-20190212-p50x9h.html

Not number of sales but Gamepass number and they looks good.

That's a really good article with some nice statistics and comments from developers.

In fact Matt Percy, head of planning for Game Pass at Microsoft, says players' game time generally increases 20 per cent once they join Game Pass, and the number of different games they play goes up by 40 per cent.

So, finally some statistics that Microsoft sees on their end. More important than the game time increase, IMO, is that people on Game Pass play more games. It's fullfilling it's goal of getting people to try games they otherwise might not try.

And sometimes gamers find they really like those games they never would have thought to try.

For example Human Fall Flat is a game that was very successful on PC, but as a physics-based puzzle game you might expect it wouldn't do as well on console. Percy says Game Pass members have played more than 3 million hours of it to date, and 40 per cent of those players had never played any puzzle game before.

Older games that newer players may not think to pick up because they'd just buy the newest games might like those older games as well. And for new multiplayer games where the player base directly influences how well you're going to enjoy the game (too few people and matchmaking is going to be bad and take a long time, for example), having more people playing it is good. IE - people that buy the game will enjoy the game more if the player base is larger due to subscription players.

New, big-name games that go into Game Pass see their active playerbase grow by a factor of two, Percy says, and older games see an average six times increase (but sometimes as high as 32 times).

Gamepass used to market upcoming games by releasing older franchise games is an interesting use for the service. A situation where Gamepass is increasing the day 1 purchase of a retail game which may or may not appear day and date on Gamepass.

"On average we see a 25 per cent increase in franchise pre-orders and a 10 per cent increase in franchise sales coming from games that go into Game Pass," Percy says. "And that’s coming from Game Pass members discovering they really love franchises and following along with them".

The developer for Ashen reinforces the notion of player base being key to the success of some game types. And how as an indie developer without a large reputation, it was a no brainer to take advantage of Gamepass for their game.

Bradley says the decision to make a deal with Microsoft to launch Ashen day and date on Game Pass, rather than relying on gamers finding and paying full price for the game, was the easiest decision in the game's development.

"The friction for [players] getting into Game Pass is so low", he says, pointing out that players with a limited budget might have only been able to play one or two games a month previously.

A lot more in there. But just in case some people might not read it, those are some things that really drew my attention.

Regards,
SB

 

[chris1515]

https://blog.us.playstation.com/201...anniversary-10-million-copies-sold-worldwide/

HZD sold well over 10 millions copies.

 

[DieH@rd]

Did that mean it sold more than all Killzone games combined?