blakjedi said:
Actually Nesh I think YOU missed the point. Sony is NOT a videogame company. Its a hardware company first, that capitalizes on the videogame sector and licenses developers to make software for that hardware. Nintendo is a videogame company that has been making hardware for 20 years. MS is a software company that had virtually no experience in the hardware sector. Sony's hardware sales (and movie sale and music sales) subsidized the first playstation and it did well. They took technology they knew and helped develop and capitalized on it.
Ok tell me where I described Sony as a videogame company?Also you are once again refering to investing on a profitable product as if its the same thing to subsidizing a non profitable product.
PS2 built off of the base of Sony's DVD expertise and most of the sales within the first year were driven off of its use as a primary DVD player - not even really as videogame system... PS2 hardware subsidized the lack of revenues of the other divisions within Sony to keep the company alive in GENERAL. If Sony the corporation died, then there would be no Sony, no PS3, nothing. MS used its software base and revenues to fund present and forward fund the xbox, xbox live infrastructure and the development of the 360 which meets THEIR goals of having a presence in the living room. Who knows what the breakdowns of MS losses were during that period (again I havent seen a direct quote from MS on how much and where that money was spent so ...)
You lost the point once again.You said it by yourself
S2 is not subsidized.PS2 profits help other divisions yes.But PS2 is doing well and brings profit by itself.
BUT you wont see Sony subidizing for years non profitable products just to keep them there.Which is what MS is doing with XBOX.
Sony closed factories and gave up on concentrading on many of its products and shifted focus to more promising investments.
But then again what does this have to do with PS2 and XBOX?
As I said earlier if you want to describe Sony's efficiency as a company
in general you should open a different thead.
Monopoly company? Look for all intents and purposes Sony is a monopolistic company within the console space and the media space (Blu-ray or CD or DVD anyone?)... not because they do anything better than anyone else but rather because they were already large to begin with so people go with what they know. Same with operating sysytems. Just because they beat their competition soundly years ago and no one wants to switch (Linux? BeOS? OSX?) is not their fault... So the first generation, MS made bad deals that they should not have, so they did not have the ability to realize the efficiencies that they planned for that Sony and Nintendo could.
Jesus Christ!Sony is nowhere a monopoly company in any market as MS is in the OS market!BR is not even in the market yet!Sony is not a monopoly in either CD or DVD products either!
And all this about MS making bad deals, having the ability to realize or not....what is this supposed to mean?That MS is excused?You are trying to find an excuse for MS?So what if they could or couldnt realize the result of their wrong decisions?The result is one and only-->innefficiency.I am an economist and there is no room for blah blah talking that MS was excused because of that blah blah and so its ok.
Too bad for them, but within that market they still took second place (in terms of consoles sold) in a market dominated by veteran players. Some how or other they got those sales so it doesnt matter how efficient Ninetendo was it came in third in the marketplace.
But I dont disagree.You said what exactly I described in my previous post.Upi just mentioned the example: "Its unfair because at the end there are two products on the market, one being efficient and one being inefficient competing the other and taking away from the efficiency."
Um what? If you increase debt year over year versus profit, lose market share, and decrease profits in general THOSE ARE LOSSES.
Here try this: "Tokyo-based Sony forecast its
first annual loss in 11 years
as falling prices of televisions and DVD recorders dent profit margins and as the company is
spending more to develop chips for its PlayStation 3 video game console. The electronics business, which accounts for almost 70 per cent of sales, has
lost money in the past two years."
LINK:
http://afr.com/articles/2005/12/08/1133829715568.html
Hah you fell in another trap.You see what you posted there?Thats R&D
R&D is a risk taken by a company that knows that in the short term it will harm them but long term future expectations are promising more gain than the short term loss.That again is not subsidizing of a loss bringing product.Thats investment on a profit bringing brand with profit pringing expectations in the long term.
What you see is the short term result
Ok so lets start again. Now as far as their console division is concerned and I stated this before, if it werent for their console division Sony could very well be completely out of business. Thats relevent.
Ahm....Ok lets say that Sony would have been out of business if it wasnt for the PS brand despite that this is your and only your assumption.And I say: So what? They had a pretty good strategy as a
competitive company and did great with the PS2 while MS didnt with the XBOX.Arent we discussing about PS2 and XBOX here?Or are we discussing about walkmans, TVs or whatever?
No lets say we have MS Games, Sony Games and Nintendo games as seperate distinct standalone companies... Nintendo would be 1, Sony would be 2 and MS would be 3. Nintendo's money though came really from blockbuster gameboy sales... and Nintendo has no debt and 5 billion in the bank. They didnt lose money on GC but they sure didnt gain a bunch either.
Yeah but SCE, MS's console division and Nintendo entertainment are not solely game developers/programmers/software houses.They arent like Namco, they arent like EA, they arent like SquareEnix, they arent like Capcom.They arent like these companies.You ommit almost deliberately a ton of other things that define these 3 companies' efficiency.If they were just game software houses like the other solely software developers your arguement would have been valid.Why not comparing them with other game developers then?Ofcourse we cant.They arent the same
MS took Nintendo's second spot, Sony remained first in the
console market.see the magic word here?
Sony made money from the PS2 for sure but I am positive that their cash position would NOT have allowed them to fund the development of PS3 to date... They have anywhere from 21 to 62 billion dollars or debt (depending on how you assign long term debt such a factories equipment etc). they would be contracting out manufacturing assembly, etc because hey they just make games now right? No effficiencies to be had here in terms of engineering or manufacturing because there is no capacity now.... I hope you see where I'm getting here...
R&D, future expectations, expected long term efficiency that will cover dept.Common phenomena not necessarilly describing inefficiencies.Sony is taking risks to guarantee that they will survive.Thats what competitive companies have to deal with to survive.
MS is not risking anything and doesnt have to deal with the same uncertainties.
MS has no debt either and tens of billions in the bank...
Ofcourse since unlike Sony they are monopolists in a HUUUUUGEEE market
making super profits
How is Sony's own gameplan totally irrelevant?There is a reason why Kutaragi is NOT Sony President. Its because Sony wants to be relevant in more than just videogames and Stringer is supposed to be able to pull all the threads of Sony together to reach its formerly dominant stature. Much like the PS2, the PS3 is more important as a Trojan horse for devices like Bluray (more people watch and buy DVDs and TVs than videogames). Are you missing the big picture here or what?
You miss the picture.Sony is a competitive company.They are in need of R&D and strategies that will quarantee them as much secure future as possible.There is more uncertainty and risks for these companies.All competitive companies do this.Its a natural phenomenon.
Sony just happen to use the PS3 to promote their other products.And I say SO WHAT?
MS is NOT a competitive company.Its a monopolist.They dont have to worry about R&D, or any direct thread.
Here is again the assymetry that shows unfair competition.
The efficiency talk you give in your second spiel completely alludes to "MS the company" spiel I give. I wanted to point out how each company colludes with, supports, and plans along with the videogames division and they arent entities in and of themselves - ever.
Again Xbox sold more boxes than GC so they did second in videogames this past generation - period.
Because you once again describe the example that shows unfair competition and that XBOX was
forced into the market and stole from the market share that otherwise would have been a part of more profitable divisions that belong to SCE and Nintendo.
Nintendo isnt losing any money from GC.Even if the handheld market wasnt there.
And also another thing that shows how innefficient MS is, is the fact that Nintendo is a tiny company compared to MS.MS barely surpassed it in sales despite that they have astronomical amounts of accumulated capital which is the main driving force of a company.
--->another proof of unfair competitions since Nintendo is more efficient than MS when it comes to consoles but still managed only third spot.
Actually you reinforced my arguements instead of prooving them wrong.
