All purpose sales and sales rumors/anecdotes thread next gen+

[chris1515]

If they do a price drop after a cost reduction they need to increase PS4 production. The goal is not to sell the same number of PS4, it is to sell more PS4... First year of hardware sales is never the biggest one if you follow Playstation and Xbox motto with a price of 399 dollars/euros and do some price drop. It is not like Wii with a 259 dollars/euros price.

The second price drop from 299 dollar/euro to 199 dollars/euros after another cost reduction is to bring the late adopter.

After I am not sure it will this year, I think it will be in 2016 before Morpheus arrival.

 

[London Geezer]

I think there's a bigger play here though because of ps+ the more people you can get using plus the better especially now that the next consoles should have backwards compatibillity. Why not sell 2 million consoles a month and make billions out of subscriptions Get some massive mind share going

Because they wouldn't make 'billions'. Ps+ is what, £35 a year? Can't remember. Even if all those supposed 2 million users joined, having bought at a loss, Sony wouldn't make billions out of it. Heck, the first year they would probably just worry about breaking even and Sony are no longer in the business of worrying about breaking even.

 

[Shifty Geezer]

And something like 50% of PS4 owners take up the subscription, so it'd be two years before you recovered the losses from subscriptions - the first year covering the loss of the person who subscribes, and the second year covering the loss of someone else who didn't.

 

[Xbat]

I'm not saying Sony must take a massive loss I'm saying if they cut the cost of the Ps4 they should drop the price instead of making extra profit per machine and its not just subs people buy games too.

 

[London Geezer]

Think about it as priorities.

What does Sony need in the short term? Hard cash or more record breaking sales?

They're already breaking records, they're already outselling competitors by a fair margin, so sales-wise they're sorted. But they really, really need the cash. Now. More like yesterday.

In my humble opinion they will cut manufacturing costs, enjoy higher profits for a little while, then lower the price when they absolutely need to, some time down the line.

What are they even making today for each unit? Can't be that much.

 

[Xbat]

Short term is not the way forward and they not that desperate for cash. I feel this is a very important time for Sony and Playstation in fact I feel they already dropped the ball a little bit by not reacting to Xbox one price drop in america last year but they couldnt really because of there financial state. How far away can AMD be from 20nm manufacturing?

 

[London Geezer]

Nonsense.

They did not drop the ball. They safeguarded their profits and still sold a truckload of units. As they should. They sold more than 20 million units without resorting to crazy price drops. That's how things are done in a business that needs to make money. They are not MS who can dig into their immensely big pockets and swallow most losses - something even MS are not very happy with either, as it turns out.

Of course the short term matters, when you talk about a price drop which will impact profits right now. That's a short term impact so we're talking about the short term.

Sony is a company with an operating income in the couple hundred million dollars range. That's absolute peanuts. Microsoft has an operating income in the 30's BILLION dollars range. Or Apple, who apparently can make 18 billion in one quarter just from one little phone. Sony is absolutely broke in comparison and they need to fix their culture of loss-making for the sake of brand awareness and market share.

Can we just have a reality check here, for just one minute? Another thread going round and round.

 

[Xbat]

Dont get your panties in a twist I did say they couldnt because of there financial situation and becuase they make much less money than microsoft and apple doesnt mean they deperate for cash. Going by that reasoning almost every other company must be desperate.
Yes dropping prices effect your immediate profit but also can have a bigger long term impact.

 

[dobwal]

Short term is not the way forward and they not that desperate for cash. I feel this is a very important time for Sony and Playstation in fact I feel they already dropped the ball a little bit by not reacting to Xbox one price drop in america last year but they couldnt really because of there financial state. How far away can AMD be from 20nm manufacturing?

Sony doesn't operate in a vacuum. MS has already shown a strong desire to maintain relevancy in the console market. Do you think Sony wants to get into a price war with MS with its far deeper pockets? The cuts could turn into a situation of accelerating console sales across the board but deeply cutting into everyone's profit.

All Sony ends up doing is working harder for less money.

 

[London Geezer]

Dont get your panties in a twist I did say they couldnt because of there financial situation and becuase they make much less money than microsoft and apple doesnt mean they deperate for cash. Going by that reasoning almost every other company must be desperate.
Yes dropping prices effect your immediate profit but also can have a bigger long term impact.

Affect.

 

[Deleted member 11852]

Dont get your panties in a twist I did say they couldnt because of there financial situation and becuase they make much less money than microsoft and apple doesnt mean they deperate for cash.

Prior to 2013 Sony hadn't had a profitable year for five years. Although their last quarter (2014 Q3) was profitable, Sony will be making a loss over the entire financial year, which ends 31 March. So yes Sony do "make much less money" than Microsoft. So much less that are still losing money. Next year should be a huge turnaround but they'd be foolish to give up money for no reason.

 

[Xbat]

Sony doesn't operate in a vacuum. MS has already shown a strong desire to maintain relevancy in the console market. Do you think Sony wants to get into a price war with MS with its far deeper pockets? The cuts could turn into a situation of accelerating console sales across the board but deeply cutting into everyone's profit.

All Sony ends up doing is working harder for less money.

Yeah that is very true and the biggest reason for not cutting the price.

 

[Rangers]

They did not drop the ball. They safeguarded their profits and still sold a truckload of units. As they should. They sold more than 20 million units without resorting to crazy price drops.

Yup, a price cut is less likely not more. Sony did not need one.

Microsoft needed one just to claw out relevancy in the US and UK, which is enough to ensure third party support.

This just shows how having the more powerful hardware (up to a point) typically recoups far far more than it costs. For spending just a little more on hardware Sony will reap possibly billions of dollars in benefits. Weak hardware is the epitome of penny wise, pound foolish. And Microsoft suits sat back and said "ok guys how can we save another penny on the hardware?"?

Ok to be "that guy", Sony selling 1.7 million in Feb/Jan, how realistic? This topic would be better served after March NPD are in, but we can look at it.

January NPD PS4=193k
February NPD=? February 2014 PS4=268k, but they were supply constrained. February has been a pretty good month in recent years, imo due to tax returns. 300k-400k seems a good optimistic projection. So if we use the latter we're at ~600k in the USA.

Adding up Media Create sales 2015 weeks 1-9 at Neogaf ~218k.

So with an optimistic 400k February NPD you are at ~818k in the USA and Japan. Add in another 30k-60k (5-10% of USA) for Canada. Call it 45k. 818k+45k=863k. So you need 837k for the rest of the world (mostly EU), which seems rather high but I guess is at least somewhat plausible.

 

[temesgen]

Yup, a price cut is less likely not more. Sony did not need one.

Microsoft needed one just to claw out relevancy in the US and UK, which is enough to ensure third party support.

This just shows how having the more powerful hardware (up to a point) typically recoups far far more than it costs. For spending just a little more on hardware Sony will reap possibly billions of dollars in benefits. Weak hardware is the epitome of penny wise, pound foolish. And Microsoft suits sat back and said "ok guys how can we save another penny on the hardware?"?

Ok to be "that guy", Sony selling 1.7 million in Feb/Jan, how realistic? This topic would be better served after March NPD are in, but we can look at it.

January NPD PS4=193k
February NPD=? February 2014 PS4=268k, but they were supply constrained. February has been a pretty good month in recent years, imo due to tax returns. 300k-400k seems a good optimistic projection. So if we use the latter we're at ~600k in the USA.

Adding up Media Create sales 2015 weeks 1-9 at Neogaf ~218k.

So with an optimistic 400k February NPD you are at ~818k in the USA and Japan. Add in another 30k-60k (5-10% of USA) for Canada. Call it 45k. 818k+45k=863k. So you need 837k for the rest of the world (mostly EU), which seems rather high but I guess is at least somewhat plausible.

You raise so good points but I don't see development stopping for XB1 anytime soon, even if we had a 3:1 ratio I'd expect to see multiplats on both platforms and even the biggest fans boys should be hoping MS continues to push for market share or we'll see Sony doing less and less that positive for cosumers.

 

[Silent_Buddha]

Short term is not the way forward and they not that desperate for cash. I feel this is a very important time for Sony and Playstation in fact I feel they already dropped the ball a little bit by not reacting to Xbox one price drop in america last year but they couldnt really because of there financial state. How far away can AMD be from 20nm manufacturing?

Actually, even though things are looking slightly up for Sony, ATM. They are desperately in need of cash. Enough that all of their management have given up their yearly bonuses. Enough that for the first time in the history of the company, they will not be paying stock dividends.

Moves that are designed to alleviate the relatively massive losses they expect to have for the FY ending Mar. 2015. Even with those concessions, they are projecting 170 billion yen in losses. At current exchange rate that's ~1.4 billion USD. In losses. For FY ending Mar. 2014, they had losses of 128 billion yen. For FY 2013 they had a 41 billion yen profit. For FY 2012 they had 455 billion yen in losses.

So, no. It's quite likely they will be playing it conservative and doing what Microsoft did with the X360. Not offer an official price cut for as long as they can. Which means, until demand for the PS4 starts to drop significantly.

Regards,
SB

 

[Silent_Buddha]

Oh and just because I find this so odd, and thus interesting.

Feb, 2015 rankings for PS4 and XBO.

10 - PS4
11 - XBO: AC bundle

Now, this will be an interesting test to see just how well Amazon's monthly rankings match up to NPD. I have a hard time believing that Feb. will be that close between PS4 and XBO. But it is a slow month, so it wouldn't take much to get sales relatively close, I suppose.

It's also continuing into March so far.

07 - PS4
08 - XBO: AC bundle

But that's likely just an oddity with the beginning of the month. After all there's also 4 PC (!) SKUs in the top 20. I expect there to be more seperation by the end of the month.

Regards,
SB

 

[goonergaz]

Well Sony released The Order so I'd expect March (at least the beginning of) to show a bit of a gap so it is interesting there's no real change

 

[Deleted member 11852]

Actually, even though things are looking slightly up for Sony, ATM. They are desperately in need of cash. Enough that all of their management have given up their yearly bonuses.

I know it isn't what you mean but this sounds like Sony are digging around the back of the couch for money to pay their staff and keep the lights on!

Even during five continuous years (and 20 quarters) of losses, they never ran out of money for daily operations, it's just they want sustainable profits on which to build and expand into new markets. Or rather, they just want to lose the losses. The last quarter return seems to demonsrate that day to day operations in the Mobile Communications are indeed profitable, which is a shockingly quick turnaround. Obviouisly the bigger picture shows the sizeable impairment charge and there was some securitieis adjustments where they converted bonds into stock which made everything looks better than it really was but it does seem the worst is behind them.

Their new CFO (of April last year) seems to be something akin to an actual wizard. But it's no time to start buying Cuban cigars, Russian caviar or cutting the price of the PS4. They keep saying that PS4 will be their short term profit centre so surrendering profit margins on PS4 while it's selling like crazy would be a strangely insane move. Yet people keep suggesting it.

 

[London Geezer]

I know it isn't what you mean but this sounds like Sony are digging around the back of the couch for money to pay their staff and keep the lights on!

Even during five continuous years (and 20 quarters) of losses, they never ran out of money for daily operations, it's just they want sustainable profits on which to build and expand into new markets. Or rather, they just want to lose the losses. The last quarter return seems to demonsrate that day to day operations in the Mobile Communications are indeed profitable, which is a shockingly quick turnaround. Obviouisly the bigger picture shows the sizeable impairment charge and there was some securitieis adjustments where they converted bonds into stock which made everything looks better than it really was but it does seem the worst is behind them.

Their new CFO (of April last year) seems to be something akin to an actual wizard. But it's no time to start buying Cuban cigars, Russian caviar or cutting the price of the PS4. They keep saying that PS4 will be their short term profit centre so surrendering profit margins on PS4 while it's selling like crazy would be a strangely insane move. Yet people keep suggesting it.

Well, in a way Sony had to dig behind the sofa and when they couldn't find any coins, they slashed tens of thousands of jobs in the last few years.

Of course that's not exactly how it happened (they never were so broke as to miss employees' salaries), but the principle is the same. They had too many people working for them, and they restructured accordingly.

Broke broker brokest.

If it didn't create a complete PR nightmare and end the universe as we know it, right now Sony could even be in the position to raise the PS4 price and make even more profits, considering the demand. Will never happen of course.

 

[Deleted member 11852]

Well, in a way Sony had to dig behind the sofa and when they couldn't find any coins, they slashed tens of thousands of jobs in the last few years.

There's a difference between cutting staff becuase you can't afford to pay them and cutting staff becuase they are surplus to requirements and I don't think there was any suggestion of the former. Those hideous losses aside, Sony has a ton of liquid assets which is why they were able to secure loans and operate for years in the red. At no point were people sent home without pay. Redundancy packages were, apparantly, quite good. That's not indicative of a company without money. Nor are PlayStation branded screws that most PS4 owners will never see