Sony is bleeding money - business strategy discussion

I'm not sure I like SNEs tax play BUT if you are going to take a hit NOW would definitely be the time to do it since you can simply say, "hackers" and "earthquake" and the market will be pretty forgiving and HOPEFULLY this makes next years numbers look much better...but we shall see. PCs are on the decline at the major players so I imagine Vaio is going to be taking some big hits in the coming year or two.

EDIT: Reading further is looks like the "tax play" I mention is actually required to some degree to meet US GAAP regs.
 
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I'm not sure it is a tax play. Depending on what buildings and stores/warehouses they had in the the areas strongest hit by the earthquake they could have to write off a substantial loss.
 
The thread title is a bit disingeuous don't you think?

In what way? Because they might actually realize this tax loss if they don't turn the business around or what did you have in mind?

ft.com said:
...

Sony itself had forecast a Y70bn net profit in February. It is not scheduled to announce final earnings numbers until Thursday, but a Tokyo Stock Exchange rule forced it to release the preliminary results three days early.

Companies listed on the exchange are required to inform investors immediately if they conclude that they will miss earnings targets by 30 per cent or more.

...

FT article
 
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So the question is , will sony be able to compete with MS on the console front hardware wise ?

If sony is bleeding money can they afford to create a loss leading platform ?
 
So the question is , will sony be able to compete with MS on the console front hardware wise ?

If sony is bleeding money can they afford to create a loss leading platform ?

Doesn´t look to good does it? I don´t know how the numbers are done over time when it comes to the cost of a new platform.

R&D on a new console could have started already and be a part of the financials for some time, i think that is how Nintendo does it. That still leaves a potential heavy loss pr sold console depending on how they package it. If they do like Microsoft did from the start and charge extra for Wifi, Controller Rechargers, Hd Movie Disc support and Online play it might be possible to make a cheaper package. But some of that is just unlikely today.

But a plan could be to go with pure basic in one package and the "special edition" in another, for example PS+ included for the life time of the PS4.
 
Some of the damages done to the plants and factories in Japan will most likely be covered by disaster insurance, at a later point. So allot of those costs will probably be reimbursed later.
They don't start to make money until it's rebuilt, and in full production again.

The PSN-fallout however, is just initial costs, of what it has cost Sony to rebuild the network, providing their consumers identity-theft-protection programs, engineering-overtime, and similar..

Most of the games/movies in their welcome back programsare their own products, so it dosn't cost Sony anything to give them away, they just don't earn money on them, this month.
That cost might rise, if consumers get's troubles with stolen identities, and similar.

I read in a different thread here, that it would be much better if Sony just split the costs on the users, and gave the users money to spend on PSN-store.
I find it abit ridickolous, a couple of dollars on the PSN-store wouldn't help anyone if they get their identity stolen. The fraud-insurance programs wich you can sign up for, for free - might do just that.
 
Like you said, Sony gives the psn ''victems'' one of their own products, which don't cost them any money. Letting gamers choose their own games would be much more of a gesture than giving away something which doesn't costs you any money to begin with!
 
Like you said, Sony gives the psn ''victems'' one of their own products, which don't cost them any money. Letting gamers choose their own games would be much more of a gesture than giving away something which doesn't costs you any money to begin with!

That's pure nonsense. Just because Sony published all these games doesn't mean they won't end up owing the developers compensation for giving them away. In all likelihood they negotiated contracts with Housemarque, Insomniac, Sucker Punch and Media Molecule for large one time payments instead of standard royalties and/or bonuses. This probably cost tens of millions of dollars. Any credit deal would have inflated that to hundreds of millions of dollars. It doesn't make sense to mortgage the entire PlayStation business to please a tiny minority of the user base. Sony has obligations to parties beyond their customers, including publishers, developers, and share holders. It's always a compromise and if the end result is losing the intractable douche-bag demographic to the 360 platform over this, that's probably an acceptable outcome when balanced against the need to keep the platform healthy.
 
Like you said, Sony gives the psn ''victems'' one of their own products, which don't cost them any money. Letting gamers choose their own games would be much more of a gesture than giving away something which doesn't costs you any money to begin with!

Well, do you think it would be fair for Square or EA, if Sony started giving away their games for free?
For them Sony are just a store selling games for them, just like Amazon do, if you buy the game at Amazon, then Sony will only be distributor.

However, the games Sony offer are their own, they have allready been funded, so it will be no extra huge costs that the investors need to be notified about.
They have deals in place with Insomniac and Housemarque, if they sell X amount, they probably get a bonus, they might have reached those allready, if not, they will probably do it now, if that's the case they might have to pay something extra. :-/

However, for the most part, it dosn't look like the games given away will cost much, but all the other stuff do.
 
That's pure nonsense. Just because Sony published all these games doesn't mean they won't end up owing the developers compensation for giving them away. In all likelihood they negotiated contracts with Housemarque, Insomniac, Sucker Punch and Media Molecule for large one time payments instead of standard royalties and/or bonuses. This probably cost tens of millions of dollars. Any credit deal would have inflated that to hundreds of millions of dollars. It doesn't make sense to mortgage the entire PlayStation business to please a tiny minority of the user base. Sony has obligations to parties beyond their customers, including publishers, developers, and share holders. It's always a compromise and if the end result is losing the intractable douche-bag demographic to the 360 platform over this, that's probably an acceptable outcome when balanced against the need to keep the platform healthy.

Classy.
 
Because "is" =/= "might"?

One implies certainty the other is well... anyone's guess ;-)

I'm not sure I understand where you are going with this maybe we are discussing different things. Had Sony not taken the tax credits in previous years their losses would have been even larger in the previous years. They were/are bleeding money; the tax credits that they took in previous years now needs to be paid back because this is their third losing year, this is not Sony pre-paying taxes this is Sony paying back their tax credits because they are failed to make a profit three consecutive years.
 
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