Sony financial report Q2 2008

Sure but you can also say that´s an extra $100 that buys you a first class BD-player and that is half the price. Anyway, I understand that if you do not have $299 you cannot buy a console at that price in cash.
but what good is a bluray player with no media and what good is paying a premium on bluray movies that will only work on one tv in your house.

Also some might not need a bluray player right now and may wait untill next year for that when you can get a good bluray player for $100-$200. You can get a sony right now for $250.


Still though last year it was only a $120 price diffrence for that bluray feature. Now your at $200 . Why would ps3 slaes go up when the cost has gone up?

Just because some of those reasons existed last year doesn´t mean people cannot still use them to motivate their purchase. People hardly buy a console for one single reason it´s the sum of them that ends up as the deciding factor.

Mabye but that wouldn't account for an increase of sales from last year. What made them want to buy a system this year and not last year ? Wait could it be another 40 gigs of hardrive space and metal gear solid ..... just like i said originaly.

What you see as the major changes (MGS4 and +40 GB) may not be what other people think are the major changes. Some may think trophies and ingame XMB were important, or GT5 Prologue, or DualShock 3, or Wipeout HD or whatever. In Japan the PS3 exist in a plethora of colours. In the end it may be the addition of some in your eyes tiny detail that finally make someone buy a console. There are a lot of those small details.

In japan where the ps3 is being outsold by the 360 ?

Some surges in the sales are easy to attribute to the release of new models or some high profile game title, but those are few and quite easy to spot, the reasons behind the steady stream of sales usually are more complex.

We saw the increase in sales around the time of MGS4 and now once again the ps3 is being outsold by the xbox 360 at least here in the states and in japan. So none of the reasons you have listed so far give me any reason to believe that sony will hit 40-50% market share.

The xbox 360 launched in 2005. They can release a new system as early as 2010. What happens in 2010 if the ps3 is just dropping to $200 , the xbox 360 is $100 and the xbox next is $400 . Where does the ps3 fit in then. After all with a new xbox you get much much better graphics (most likely) a bluray player and god knows what else.

Like I siad from the start I don't see any reason to believe the 40-50% market share numbers and I have yet to see new reasons to buy a ps3 this year and into next year.
 
I can suggest a few reasons, such as.
  • The 360 core (as in hardcore) market is starting to get saturated and the casual market has not taken off yet, it may this holiday if Microsofts PR work as intended. Sony already have a strong brand in the caual market through the PS2. The PS3 still hasn´t reached an attractive price point for that group but some may still be motivated to take the cost, my guess it is probably people with a HD TV set that are attracted by the BD function.
  • Some people prefer the Playstation first party games such as GT5 Prologue, Wipeout, SOCOM, Buzz etc. and exlusives such as MGS4 that have materialised this year.
  • Some people see potential in the blu-ray media, not just for movies as some seem to suggest.
  • Some people value free online play and prefer taking the cost upfront instead of having to pay an annual subscription fee for years to come.
  • Built in functions such as WiFi connection, web browser etc. and a broader range of third party peripherals: racing wheels, wireless keyboards etc. may also be features that people take in to account when they purchase a PS3.

100% agree. Add to that list cheaper options on upgrading the HDD and more trust in the hardware reliability. I also prefer the PSN for buying things - I prefer to know the exact value and I like to spend what it costs (rather than all this different card rubbish). I would also add that there's loads of free themes and desktops.

I keep thinking about re-buying an X360 but then I remember I need to buy another wifi add-on and then re-subscribe to live. All of a sudden the console increases ~50% in price and I'm tied in to their expensive proprietry add-ons...let alone the fact I need an account for each user (I have 3 accounts on PSN for me and 2 of my kids, that would be ~£75py on live - so that's another thing to add to your list!)

I didn't mean to make this a X360 vs PS3 debate, I'm just saying from an 'on the ground purchase POV'.
 
but what good is a bluray player with no media and what good is paying a premium on bluray movies that will only work on one tv in your house.

Also some might not need a bluray player right now and may wait untill next year for that when you can get a good bluray player for $100-$200. You can get a sony right now for $250.
Some may not need a HD console now either, the discussion is pretty pointless.

Still though last year it was only a $120 price diffrence for that bluray feature. Now your at $200 . Why would ps3 slaes go up when the cost has gone up?.
Please read post again.

Mabye but that wouldn't account for an increase of sales from last year. What made them want to buy a system this year and not last year ? Wait could it be another 40 gigs of hardrive space and metal gear solid ..... just like i said originaly?.
No you didn´t. You said those were the only major changes.

In japan where the ps3 is being outsold by the 360 ?.
The 360 has outsold the PS3 for what 5 weeks? And you take that as an argument that multiple SKU colours have not helped move PS3s in Japan?

We saw the increase in sales around the time of MGS4 and now once again the ps3 is being outsold by the xbox 360 at least here in the states and in japan. So none of the reasons you have listed so far give me any reason to believe that sony will hit 40-50% market share.

The xbox 360 launched in 2005. They can release a new system as early as 2010. What happens in 2010 if the ps3 is just dropping to $200 , the xbox 360 is $100 and the xbox next is $400 . Where does the ps3 fit in then. After all with a new xbox you get much much better graphics (most likely) a bluray player and god knows what else.

Like I siad from the start I don't see any reason to believe the 40-50% market share numbers and I have yet to see new reasons to buy a ps3 this year and into next year.

I've never touched the 40-50% market share subject. Kind of stupid discussion in my eyes. "DFC expects that the PlayStation 3 will only maintain between 40 and 50 per cent of the games market by the end of the current generation". When will the current generation end? When the first console of the next generation is introduced on the market or when the first console of the current generation is no longer manufactured? Or somewhere inbetween? You can find different plausible scenarios depending of your interpretation. If you like to guess the features, prices and release dates of the next genration of consoles you are welcome. I was only arguing there are reasons why the PS3 has sold as good as it has this year sofar, not that it wouldn´t benefit from a price drop. ;)
 
00% agree. Add to that list cheaper options on upgrading the HDD and more trust in the hardware reliability. I also prefer the PSN for buying things - I prefer to know the exact value and I like to spend what it costs (rather than all this different card rubbish). I would also add that there's loads of free themes and desktops.

Yes the hdd upgrade is cheaper , however your paying more to begin with. Your paying $200 more for a 80 gig hardrive. For $150 or less you can have a 120 gig drive on your 360 thus bringing you to $350 which is still $50 less than the ps3 with the base 80 gig drive. You then have to spend additonal money to move up in hardrive size with the ps3. Which might we remember requires installs on many games where as the 360 has that as an option.

As for wifi you can buy a wireless bridge for $20 and live is $30 a year. I don't see how that increases the price by 50%.

I also don't understand how you can fail at doing simple math to figure out how much a game costs you. The price of points is right there on the guide and you can go to stores and bu points. 1200 points is $15 and 4000 points is $50. Also since these are sold in stores you can many times find deals on them such as the great target sale where you were able to get 1200 point cards for $10 thus saving oyu money .

The ps3 itself requires add ons. The pro and elite 360s come with high def cables. The ps3 requires you to go out and buy one. IF you want component cables your looking at an additional $50 bucks. An hdmi cable will set u back $10 online or as much as $120 in a store.

If you reall want to to go with the wifi add on costing $100 then we hsould go with the hdmi cables costing $120 also. Why would u shop around for a cable whe nyou wouldn't shop around for a wifi adapter.
 
Some may not need a HD console now either, the discussion is pretty pointless.
and they don't all need one , which is why the wii is selling. But many people just want a console and if they buy one console either xbox , ps or wii they will not be buying again this gen. So a sale of an xbox or wii will take away a sale for a ps . It may not be every sale when this happens but there will be a bunch of sales like that.

Add to the fact that a wii owner may in the future want to buy a hd console and you see the 360 at a cheaper price point with many of the same games and better verisons (through ecxclusive dlc or just less bugs and graphical problems) and it takes away a reason for buying a ps3.

Which has been my point all along. There are a finite amount of people willing to buy a console at $400 . The 360 was at the $400 price point for what now 3 years. They were mining that price point for a year before the ps3 launched. Then the ps3 mined that price point while the 360 has been mining the $300 price point range. Both of them are reducin the amount of buyers at those price points. While a sony console may bring in sony only fans that wouldn't have bought at $400 but iwll at $300 there are just as many if not more that were just waiting for a hd console to hit $300 and would have already bought a xbox 360. The wii is also there at $250 taking away sales.


Please read post again.

I have ... mabye my imagination isn't great but as you said those are reason for sales to increase. However price has increased from last year compared to the competition when these same reasons existed. None of the reasons are new however last year the 360 was more expensive by $80 which made the bluray feature of the ps3 cheaper in comparison. Now the 360 has droped by $80 bucks and the the ps3 has not. Thus to get bluray in your console you are spending $200 more than a non bluray console. Or $120 more than last year.



No you didn´t. You said those were the only major changes.


ANd they are. These are the only things you listed that changed from last year.

Some people prefer the Playstation first party games such as GT5 Prologue, Wipeout, SOCOM, Buzz etc. and exlusives such as MGS4 that have materialised this year.

Wipeout , Buzz and Socom have all recently released in a time frame when the ps3 has once again gotten outsold by the 360. I don't know when GT5 came out but its an online downloadable game only here in the states. MGS4 is the title that got the push and made the big waves. You can see this by ps3 sales.

There have been no other major changes for the system since mgs4 and the 80 gig price drop. The nextmthings will be the holiday games and the 120 gig system at $500. The holiday games may sway some but the 360 has just as strong of a line up. The next major thing will be killzone and a price drop next year.


I've never touched the 40-50% market share subject

Why responed to my post then. That is what my posts were all about.

was only arguing there are reasons why the PS3 has sold as good as it has this year sofar, not that it wouldn´t benefit from a price drop.

It sold well from MGS4 and the 80 gig price drop phasing out the 40 gig . In sept their sales did not grow from august. The 360 has also started to out sell it again. In the states the 360 will quickly surpase the ps3 sales and will most likely put another 2m or so consoles between it and the ps3. The ps3 also continues to sell poorly in japan and the new psp and dsi will take more sales away from the ps3 this holiday and so will the rather strong 360 line up in japan. In europe the 360 will continue to out sell the ps3 in the UK and will most likely sell on par with it across the rest of europe.

Once again the 360 does not need to be abandoned and MS can continue to sell it for 10 years like sony did with the ps2. However where does that put sony. What will be thier price drops in the next few years and what about the wii hd rumors and the next gen 360 rumors. The ps3 may get stuck between a rock and a hard place. Its already loosing money for sony. Do you really think they will stick with the system and continue loosing money when they can jump ship to something new ?
 
I've never touched the 40-50% market share subject. Kind of stupid discussion in my eyes. "DFC expects that the PlayStation 3 will only maintain between 40 and 50 per cent of the games market by the end of the current generation".

What is the "games market" anyway? Software sales, hardware sales, revenue share, etc. Bit of a pointless prediction when it's that loose ;)

Anyway, any chance of getting back on topic anytime soon? The sales pitches are wearing a little thin :D

I must say thanks to eastmen though, I rejigged my setup extensively to get the 360 within ethernet cable range of my router, to avoid paying £59.99 for the Microsoft Wireless Bridge - I didn't realise £10 wireless adapters work, I'll have to try that.
 
Why responed to my post then. That is what my posts were all about.
YOU were the one responding to my post! (post)

You also seem to be pretty clueless about the PS3 offerings on the different markets so I will not be wasting my time any further arguing with you.

Just to examplify: The the DS3 was introduced this year in April in the US and mid summer in Europe, GT5 Prologue BD in the US, BuzzTV in Europe mid summer etc.
 
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I've got to simply reiterate a key point from the MS earnings thread:

Nintendo and Sony have both been slammed now by a foreign currency 'tax' that is going to take 10% of the earnings out of everything they were selling in the US, and 20% out of everything they were selling in Europe. For Nintendo they'll be able to absorb it and still be profitable, but for Sony this is going to have a disastrous effect. This currency pain is a major part of why the entire company cut its profit outlook recently across all divisions. That's a price cut right there in effect in terms of Sony's numbers, except that it doesn't carry through for the consumer. And in that environment, I just don't see how they're going to be able to offer a 'real' price cut. We can already consider the margins of the business to be completely blown out on the strength of the yen alone.

People thinking that Sony can 'cost reduce' their way out of these fundamental issues need to adjust their understanding. This effects everything; PS2 is less profitable, PSP is less profitable, and PS3 is further lossy. European margins are hit hardest, followed then by the US. Sony may or may not reduce the price on PS3 at retail next year, but the business is essentially blown up. I mean I've asserted before that I would be surprised if PS3 operations were to ever be net profitable, but now truly, I just don't think it possible.

This is the console business of course, but it goes without saying that these same exchange rate issues ravage the rest of their consumer electronics segments as well, and is why their net profit estimates for the year were taken way down.
 
Yes the hdd upgrade is cheaper , however your paying more to begin with. Your paying $200 more for a 80 gig hardrive. For $150 or less you can have a 120 gig drive on your 360 thus bringing you to $350 which is still $50 less than the ps3 with the base 80 gig drive. You then have to spend additonal money to move up in hardrive size with the ps3. Which might we remember requires installs on many games where as the 360 has that as an option.

As for wifi you can buy a wireless bridge for $20 and live is $30 a year. I don't see how that increases the price by 50%.

I also don't understand how you can fail at doing simple math to figure out how much a game costs you. The price of points is right there on the guide and you can go to stores and bu points. 1200 points is $15 and 4000 points is $50. Also since these are sold in stores you can many times find deals on them such as the great target sale where you were able to get 1200 point cards for $10 thus saving oyu money .

The ps3 itself requires add ons. The pro and elite 360s come with high def cables. The ps3 requires you to go out and buy one. IF you want component cables your looking at an additional $50 bucks. An hdmi cable will set u back $10 online or as much as $120 in a store.

If you reall want to to go with the wifi add on costing $100 then we hsould go with the hdmi cables costing $120 also. Why would u shop around for a cable whe nyou wouldn't shop around for a wifi adapter.

Your figures don't stack up in the UK. And to be honest it seems you either ignored my points or just simply don't understand them...and I love how a component cable is '$50 bucks' (PS2 ones work and you can buy them for £5, but already owning a PS2 it cost me nowt), yet live is only $30 when in the UK it's £30! (around $55)...obviously I can do the math, but I prefer to know the cold hard cash to the points system, and I like to spend as I buy rather than buy cards and end up with usless points until I spend them.

For me I'd rather pay £300 for a PS3 and have the option to upgrade to a 250gb HDD for £50 (or of course I could buy pretty much any size I wanted within reason) rather than spend £220 on Elite be stuck with 120gb HDD untill MS bring out a 250GB for £150 (it's only a matter of time) and then on top of that I'd have to buy the wifi and play and charge kit (add ~£50) then live at £30py per account. So just for myself it's the same price yet I'm stuck with £30py per account with live (I'd want 3 accounts). With PS3 it's £300 and that's it. FTR my 50% more was based on the cheaper premium. £140 + wifi and live @ £70 (= 50% more). BTW these prices are for real, not just made up - check www.play.com.

As I said before, this is from my own POV - with a family and kids that enjoy playing buzz, using the eye toy, eye of judgment and singstar. I also like to know I can trust the hardware to be working (touches wood) - my X360 died after about 8mths use.
 
how much more is it costing sony to make a ps3 than MS a xbox360?
now the average price of the ps3>360 is equal or more than that shortfall, thus they roughly cancel each other out, or do u disagree? if u do give reasons

now sony lost $380million(*) MS made ~$150million
thus we have a difference >$500million between the two.
do u now see why theres something else in the EED that is covering up the difference?

(*)and thats including profits of ps2/psp (prolly without those it would be $500m loss)

First, the 360 dominates its division unlike the PS3 in Sony game division. Look at the earning reports. EDD jump something like 2 billion in rev from ~6 billion to ~8 billion dollars (2007 versus 2008) with the 360 and PC game responsible for 1.7 billion of that 2 billion increase. There is nothing in EDD that could cover $500 million in losses a quarter. EDD is not recieving 2 billion dollars in intersegment commission fees for handling the marketing and sales of Window and Office into retail. When the embedded mobile OS was a division to itself just a couple of years ago it was worth 377 million in annual revenue with only 2 million in profit. Windows Office accounted for 17% of the US 3.3 billion non game PC software market and of that about 20% was Apple's Office which is roughly worth 120 million in US retail sales. If the 360 hardware was worth ~500 million in losses it would mean an average loss of $230 per unit and thats ridiculous.

Even to suggest that the 380 million in losses are strictly from PS3 hardware is also ludicrous. Look at the size Sony's first party developement division compared to amount of 1st party titles released during the last three quarters. Sony has spent the last 12 years structuring SCEI around 2 overwhelmingly dominant consoles. Sony gaming division is simply too fat for the amount of revenue the PS3 is generating. PSP and "still kicking" PS2 is allowing the gaming division not to realize even bigger losses but Sony game division wasn't built to accomodate a premier platform with 14-16 million in console sales three year into a generation.

MS on the other hand has spent the last 7-8 years building their division for a platform that sold 25 million console over its first 4 years. MS spent its early years throwing money at the division only to find little returns. Look at MS's approach of late, its practically the total opposite versus the xbox 1's early days in terms of lavishing the division with resources.

The difference you see in the MS's 178 million in profit and Sony's 380 million losses is the result of two manufacturer reaching the same level of success with one hoping to get as big as its now and the other never imagining it could fall so far.
 
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I've got to simply reiterate a key point from the MS earnings thread:



People thinking that Sony can 'cost reduce' their way out of these fundamental issues need to adjust their understanding. This effects everything; PS2 is less profitable, PSP is less profitable, and PS3 is further lossy. European margins are hit hardest, followed then by the US. Sony may or may not reduce the price on PS3 at retail next year, but the business is essentially blown up. I mean I've asserted before that I would be surprised if PS3 operations were to ever be net profitable, but now truly, I just don't think it possible.

This is the console business of course, but it goes without saying that these same exchange rate issues ravage the rest of their consumer electronics segments as well, and is why their net profit estimates for the year were taken way down.


This would affect sony as a whole more than ms since ms is more of a software company and is mainly based in the united states. Sony has many hardware products from dvds to pcs correct .

Still it does suck to hear.
 
Your figures don't stack up in the UK. And to be honest it seems you either ignored my points or just simply don't understand them...and I love how a component cable is '$50 bucks' (PS2 ones work and you can buy them for £5, but already owning a PS2 it cost me nowt), yet live is only $30 when in the UK it's £30! (around $55)...obviously I can do the math, but I prefer to know the cold hard cash to the points system, and I like to spend as I buy rather than buy cards and end up with usless points until I spend them.

Cables cost $50 bucks the same way a wifi connector and live make a console 50% more. Or the xbox 360 20 gig hardrive costs $100. If your smart you can go around and shop and get everything cheaper or buy used. If your Joe Six pack going into bestbuy or the Europe verison of best buy your going to look at whats there in stock and what the sales person pushes on you. The offical ps3 component cables are $60 bucks at best buy
http://www.bestbuy.com/site/olspage.jsp?skuId=8658099&type=product&id=1196470144648

The offical hdmi cable is $80
http://www.bestbuy.com/site/olspage.jsp?skuId=8657982&type=product&id=1196470144587

The offical remote for bluray play back is $25 , the offical head set is $50 and so on and so forth.

I put those prices and infromation down to show how dumb it is to use expensive items on the 360 as a way to inch it back up to the ps3 price . I did it to show that when you start adding acessorys you can do the same to the ps3 and get the price to go up even more. Of course you can buy used or third party items and save money. I never once said you couldn't. But then again if you can buy used and third party items for the ps3 why can't you do it with the xbox 360 ?

For me I'd rather pay £300 for a PS3 and have the option to upgrade to a 250gb HDD for £50 (or of course I could buy pretty much any size I wanted within reason) rather than spend £220 on Elite be stuck with 120gb HDD untill MS bring out a 250GB for £150 (it's only a matter of time) and then on top of that I'd have to buy the wifi and play and charge kit (add ~£50) then live at £30py per account. So just for myself it's the same price yet I'm stuck with £30py per account with live (I'd want 3 accounts). With PS3 it's £300 and that's it. FTR my 50% more was based on the cheaper premium. £140 + wifi and live @ £70 (= 50% more). BTW these prices are for real, not just made up - check www.play.com.

You really wouldn't have to do any of this and again this is the mentality that I was trying to shine a light on but your willing to go right back into it.
The 360 doesn't have any mandatory game installs and thus you can allways get away with smaller hardrives than on the ps3. It may be great that you want to pay more for the ps3 and then pay even more to upgrade the hardrive and then you have a hardrive twice the size. But in 6 months that hardrive will be worthless when you run out of space because there will be a sale on the 320 gig drives and it will be the same as you paid for the 240 drive. The 360 drives will retain their value well. You could still have gotten $60 or so for a 20 gig hardrive at the 120 gig launch thus making the 120 gig drive a $110 upgrade which was in line with 2.5 inch drives of the time. When a 250 gig drive comes out for the 360 you may still be able to get 70-80 for the 120 gig drive as there will be 20 and 60 gig users who will want to upgrade.


You can point out your prices above . I don't know all the prices in europe. But once again why aren't u adding high def cable prices from play.com which is 18 £ or the bluray remote thats £15 or the bluetooth head set thats £18 or that iron man is £18 on bluray and £10 on dvd.

THere are hidden prices on everything and both consoles look worse when you add them in


MS on the other hand has spent the last 7-8 years building their division for a platform that sold 25 million console over its first 4 years. MS spent its early years throwing money at the division only to find little returns. Look at MS's approach of late, its practically the total opposite versus the xbox 1's early days in terms of lavishing the division with resources.

And sony is at 3 years with 18m sold dispite having two generations of over 100m consoles sold. Look at sony its competely gone back on what it did in the psone and pstwo eras which was to buy exclusives. Ms on the other hand doesn't have to keep flushing money down the drain like they did the first time and are able to spend it on exclusives be it third party games or third party dlc . They went the smart road this time while sony is now having massive trouble with the ps3 hardware wise and are now paying for it.

The difference you see in the MS's 178 million in profit and Sony's 380 million losses is the result of two manufacturer reaching the same level of success with one hoping to get as big as its now and the other never imagining it could fall so far.

Mabye but sony has suffered much more than a 380m loss. The ps3 has basicly wiped out all the gains they made with the ps2 monetarly (sp?) and brand name wise. The 360 is continuing to out pace the xbox 1 and that is a great thing for them and they have been able to build diffrent sources of income that will follow them into the next platform.
 
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This would affect sony as a whole more than ms since ms is more of a software company and is mainly based in the united states. Sony has many hardware products from dvds to pcs correct .

Where am I talking about MS?
 
In your post you talked about the quote being from the MS thread. Which means its based on discusion on MS is it not .

Did you read what I quoted? It didn't have anything to do with Microsoft at all.

Incidentally though, your idea that software is not subject to the same exchange rate forces as CD players is completely incorrect. If MS is selling a Windows license in the UK for x GBP two months ago and it translated into 2x in dollars, that's now going to be 1.5x. Whether it's software, hardware, or produce, anything that's bought or sold is going to be effected by exchange rates. Microsoft does denominate half of their foreign business in dollars to begin with though, which does provide a hedge against these ill effects.
 
Yes I did and I can't see how it wouldn't affect MS also which is why I asked.

Well, you could read my post in the actual MS thread, which includes a good deal more than what I excerpted above, and post your question there if you're interested. But I'm not understanding what question you're asking; I saw a declarative (tangential) sentence.
 

pick and mix your arguement as much as you like, but the fact is PS3 is much better for me - a family man - for these main reasons:

1) no yearly charges for live (£150 over 5 years per account = £450 for my family - free on PS3
2) cheap to upgrade if I desire - I don't need to, but if I do it's cheap and who cares if something cheap devalues, let's see how the value holds on those 120gb, IIRC you can get 20gbs now for £13 - those same drive were £70 - great value retention, and we won't mention HD DVD.
3) reliability - don't need to expand on this
4) better choice of software - granted this is personal, but the only games my kids missed when I sold the X360 was viva pinata but LBP eclipses that.

And that's all I want to say on the subject. I'm glad you feel your X360 offers you value (for many gamers I do understand that it does), but until MS revise their live charges and improves the consoles reliability, I won't be 'jumping in'.
 
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