Very dark clouds are starting to gather over Sony.
http://www.gamasutra.com/php-bin/news_index.php?story=21545
http://www.gamasutra.com/php-bin/news_index.php?story=21545
Analyst expects Sony losses to be six times higher than expected(1.6 billion dollars)
- Thread starter Brimstone
- Start date
DeadlyNinja
Veteran
I wouldn't worry. I'm sure Sony will survive. They did win the format wars, and that might be able to sustain them for some time.
Well their survival isn't in question here; also worth noting that the prediction of a six times greater loss is from the analyst in question in relation to his own earlier estimate, rather than anything out of Sony. No doubt Sony's year is going to be bad, but I just rather wait for their statement or results than bother with any of this analyst talk.
Also in terms of the analysis itself, I have a fundamental problem with this guy urging sweeping change as if Sony should've... even could have... been moving with lightning speed this past six months. It's not like the business model was broken at 110 yen/dollar, so to blame Sony for events they couldn't control... I don't know, seems harsh.
Nomura Securities isn't doing any better than Sony though, for context. No company touched by the financial maelstrom can escape the negative effects; to be discussing it in a far-removed fashion just seems pointless. But, the dude is paid to write analysis as such, and of course in these times you do what you're paid to, lest you not be paid at all tomorrow.
midorigreenwood
Newcomer
The thing is.... bluray doesn't seem to be a magical cash cow.
It has at best 2-5 percent of the market. (new titles do alot better but the home movie market is alot bigger than just the top 10). If the global downturn drags on for several years, it might stifle any mainstream appeal of the product especially as DVDs remain a perfectly acceptable alternative. You would think that eventually dvds would be phased out.......but by then bluray may be obsolete.
Furthermore, its not like Sony is the sole beneficiary of royalties. They are part of the BDA, bluray disc association which is made up of like 20 companies. The big shareholders are thought to be Panasonic and Sony (estimated 30% ownership of the IP) but I don't see how they're going to recoup all their losses from the modest profits.
ps: I'm not saying that Sony is going bust btw.
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Controlled when? If it's decisions made three years ago, it's not really productive to be whining about 'change' now, is it? Especially in product areas where change is impossible in the short term.
Blu-ray will probably be greater than 5% of the market a year out from now, recession or not. Every time I've been going into a Best Buy this holiday season, it seems a significant number of people are either buying players or saying "Blu-ray." Anecdotal I know, but the format does at least seem to be gaining some sort of mind share among the 'normal' folks.
It may never supplant DVD fully, but I think it will be a "non-failure" to some extent.
Anyway, as for Sony's own stake in the format, IP royalties are just a part of it. Remember that for Sony they are one of the primary providers of BD-related equipment and disc replication services. They are double exposed in that their stake goes beyond IP and into the actual supply-side of the ecosystem. (This multiplies both the effect of BD 'success' and of BD 'failure' from a capex standpoint)
Suffice to say that for the moment though, BD isn't material in either direction, and not what anyone is looking at when they analyze Sony's key divisions.
They could have cut production or in march they could have post poned a price cut. The price cut came when the writing was already on the wall.
How much did it cost them to win?
Believe me, the writing on the wall in March was faint as hell. The writing wasn't on the wall clearly until July, and later on in October (and then again in November). Look at a chart of the yen/dollar exchange rate to see when the writing was put on the wall.
I've been reading what the wall's been saying all year long, even when I would rather have averted my eyes from the horror. And trust me when I say that the Playstation division was powerless to anticipate - let alone avoid - this calamity.
Believe me, the writing on the wall in March was faint as hell. The writing wasn't on the wall clearly until July, and later on in October (and then again in November). Look at a chart of the yen/dollar exchange rate to see when the writing was put on the wall.
I've been reading what the wall's been saying all year long, even when I would rather have averted my eyes from the horror. And trust me when I say that the Playstation division was powerless to anticipate - let alone avoid - this calamity.
Well i guess we will see what happens with sony in the next few months. My real fear (and some might gasp at this) is that this will leave sony un-able to produce a true next gen system leaving only ms out there with a graphical beast.
dubyateeeff
Newcomer
Good insight. But I have no fears about that. At worst (well) they would be forced to go with more "off the shelf"/PC-parts. Die shrinks and such can be handled contractually, but would give them less control then now. At the same time, they would save a bunch of money on R&D and would get industry standard parts and tools and this would make it easier for the devs.
that didn't work so well for the original xbox .
I'm worried that sony wont be able to convince share holders to take a loss on hardware at launch. Meaning if they launch a $400 system it will cost them $400 bucks which will leave it at a disadvantage against MS who might still be able to make a $500 system and sell it at $400 and price agressively against sony while keeping a graphical lead. $100 might not seem like much but I'm sure that that price point they can easily double the ram of the console and have money left over for bigger chips.
Both console makers should be able to build/price in proximity to the other. We'll see what happens, but shareholders aren't going to be the ones making the call, and insofar as both companies are profit oriented, I think both will go for reduced initial outlay if they sense that the other is exhausted as well. MS would have the hypothetical advantage from an outlay perspective to push though if they felt able.
But anything can happen, and console success is more than just specs on a sheet - Wii being the exemplar for such. And who knows, maybe Sony will catch a break and the yen will go to 130+/dollar come 2011, and then suddenly they have a lot more room to play with.
But anything can happen, and console success is more than just specs on a sheet - Wii being the exemplar for such. And who knows, maybe Sony will catch a break and the yen will go to 130+/dollar come 2011, and then suddenly they have a lot more room to play with.
Maybe they just stop asking those high prices for blu rays. 20 a 30 euro (30 a 40 dollars) for one movie is just too expensive. > 100 euro's for some boxset containing +/- 4 blu ray's while for the same prices I can get the complete James Bond collection on DVD (20 discs) is just ridiculous.
I like my movies to be in HD but there is no way in hell that I will pay so much money for a movie.
I wouldnt worry about DVD. Blu Ray will supplant DVD inevitably imo (because at some point, players will be the same price). No, the bigger problem is DVD sales keep slipping. Interestingly I read how the Dark Knight DVD is selling much less than Finding Nemo did at DVD's peak. And of course that's the biggest blockbuster in ages.
If I was a Blu Ray backer, my biggest worry, and it's probably more an inevitability, is that you're winning an ever smaller pie. CD's are just that much further along a obsolensce curve DVD looks to be traveling.
I never used to believe MS when they said Blu Ray/HDDVD would be the last physical format. Well, I was wrong..