Sony is bleeding money - business strategy discussion

Discussion in 'Console Industry' started by -tkf-, May 23, 2011.

  1. Gitaroo

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    read zomgbbq comment on gaf, their 1.2 billions lost was just good will write off, no actual change to their money or anything and their stock actually went up after the announcement. Their earlier .9 billion lost was because they sold off their VIAO division which has been loosing market share and money, it was sold at under their value which isn't like they have to spent another .9 billions just to get rid of it. He also said the company overall has always been generating money in some way, and most of their lost so far are all write off. The company is in bad shape, but not as horrible as what people would think, like how many billions do they have to loose and still being around for this long.
     
  2. pMax

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    er... no. You do that on investor pressure to milk the cow as much as they can. Once all valuable assets are out, you move on the next company in your list, to vampire.

    Thats is EXACTLY what financial speculation is all about, and what edge funds usually do - that is why the edge fund was suggesting that.
     
  3. Shifty Geezer

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    Way too political ethical for this forum.
     
  4. dobwal

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    Yeah, spin offs are commonly in such fashion. But in this case I see using a equity carve out as a buffer that gives the gaming division some leverage when dealing with Sony as a whole.

    I am not espousing that Sony completely sell off the division. An equity carve out allows the parent company to retain ownership but it provides the subsidiary with its own board and management structure.

    I feel the biggest reason for the PS falls from dominance of the console market was mostly due to the delays and BOM cost of BluRay. A gaming division with its board and shareholders has more recourse to keep the division from carrying water for other divisions every time someone convinces upper management its a good ideal.

    Most of success of the PS consoles have been driven by people within the division not outside of it. Its my opinion that the gaming division has been successful despite Sony's upper management not because of it. Whatever autonomy the gaming division can gain the better. Even now, most of us wonder if Sony will really be aggressive in its competing with Nintendo or MS or if Sony will take a more conservative route due to Sony's problems hemorrhaging cash in other divisions.

    The current structure isn't driving synergy amongst Sony products anyways. You'd think that PS Mobile or Remote Play would be available across a bevy of Sony products. They not and I find that problematic.
     
    #544 dobwal, Nov 5, 2014
    Last edited by a moderator: Nov 5, 2014
  5. Grall

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    Spinning off the playstation division would be a dumbfuck stupid thing to do, as with anything else that is actually making sony money. I don't understand why you'd want that, unless the idea is, like pMax said, to vampire the corp of money. Fuck "properly valued", okay?

    "Properly valued" isn't going to make sony one extra yen of money, it'll make them less if they spin off the division.

    The stock market of today is an abomination. Where it once was a legit tool for companies to seek financing, now it's a zero-sum speculation game scam, where high-roller stockbroker leeches are only in it to gorge themselves on as much of other peoples' money as they can.
     
  6. Strange

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    From the financial Report

    http://www.scribd.com/doc/245102858/Sony-FY-Q3-2014

    Mobile Communications -172 billion yen 176 billion yen was lost due to impairment charge of goodwill. Take the impairment of goodwill out they actually have a profit.
    Game & Network Services +21.8 billion yen
    Imaging Products & Solutions +20.1 billion yen
    Home Entertainment & Sales +8.0 billion yen
    Devices +29.6 billion yen
    Pictures -1.0 billion yen
    Music +11.8 billion yen
    Financial Services +47.7 billion yen
    All other -18.2 bilion yen mainly due to the costs of exiting the PC market


    Looks to be in good shape if anything.
     
  7. Rurouni

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    Pictures... They are still recovering from After Earth.
     
  8. London-boy

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    Really? Surely they've had some serious hits lately? Spiderman 2?
     
  9. pMax

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    It does not work that way, sorry. First, PS inside Sony has a HUGE leverage: why do you think Kaz Hirai is the CEO?
    Second, more important: Check MS status now that "Bill" made the error of giving away its strong 40% ownership:
    The investment funds are now leading it, and they dont care a f*ck of med-tem or long-term strategies.
    Companies are not anymore hold by privates or people with long-term interests - but only on the next dividend to play in the stock right before it.
    With Sony it is harder since it is... in a sense, like samsung (but not to that level, go in SK and see that samsung does anything, from ships to buildings, for not talking of its formal/hidden management...).

    That's typical of old-fashioned companies with vertical management structure. Sony founder put a rule like "one manager every 15 engineers" but... I bet they betrayed it alot^^
     
  10. Rurouni

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    1 billion yen is around 9 million usd, so not really that big. It's left over from After Earth...
     
  11. holsty101

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    Apparently it wasn't the big hit they were looking for, just over $700m ww according to boxofficemojo which sounds ok (tho supposedly they were looking for 1b+), but even without adjusting the older films BO for inflation it's the lowest take for any of the 5 spidey films, and deservedly so imo, anyway, it's lack of critical or smash commercial success quickly lead to them redrawing their, clearly too hastily announced, "spidey universe" plans to the extent that there's been rumors recently of them working with marvel in some capacity, maybe folding him into the MCU or whatever... Apparently atm it depends on how the next spidey film preforms, it was gonna be amaz3 about 6 months ago but after the reshuffle the sinister 6 spin off is up next now, due nov 2016.

    It kinda cracks me up the way the other studios are trying to copy what marvel have been doing but only, imo, taking away the wrong lessons, I guess that's a topic for a *totally* different forum tho :D
     
  12. DSoup

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    O/T but The Amazing Spider-Man 2 is a Marvel Studios film produced in collaboration with Columbia.
     
  13. London-boy

    London-boy Shifty's daddy
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    It's not a marvel studios movie in the same way that Iron Man/Thor/Captain/Avengers is. And it's very clear it is not.
     
  14. holsty101

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    Yeah, as I understand it marvel don't really have very much, if anything, to do with the licensed to sony/fox properties, a credit in the title obviously and that's about it I believe, I'm not aware if that's any different for ASM2, given the car crash that film is and how marvel have managed the mcu until now I suspect nothing's changed.
     
  15. London-boy

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    Also if it were a 'real' Marvel Studios film, it would be somehow connected to the other movies' continuity, which of course it is not.
     
  16. DSoup

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    Stop believing in things and research them instead ;) Marvel Studios are not just a credit, they co-produced the film with Columbia. The Producer of the film is Marvel CEO Studio's Avi Arad and tons of Marvel's people are associated with the project. Check out Wikipedia and IMDB then come back and state it's not a Marvel Studio's film :???: Marvel Entertainment (who own Marvel Studios) are owned by Disney, a company not renowned for entrusting it's characters to others.

    I think you're confusing Marvel Studios and Marvel's Cinematic Universe. Thus far Marvel are keeping some of their properties, like Spider Man, X-Men and the Fantastic Four, in distinctly different "universes" from that of the current Avengers and S.H.I.E.L.D.

    You can't have all of Marvel Super Heroes in one film, it'd be nigh impossible to schedule. You can get most of them in one game though :yes:
     
  17. London-boy

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    No I'm sorry I don't agree. They are not "keeping them in a different universe". The Xmen are owned by Fox, who make the movies, and such is the divide that the Avengers can't even say 'mutant' for legal reasons, even though in the comics those universes cross over very much and mutants are not a 'taboo' like in the movies.
    The Xmen movies are made by another company. The Avengers (and spin offs) are made by Marvel Studios, which started making movies themselves with Iron Man, and just released Guardians of the Galaxy.
    Same goes for the Spider-Man movies which are made by Sony/Columbia.
    Of course you will have Marvel heading up on the highest level, as Marvel owns the comic book properties. But as far as movie rights, the division is very clear.
     
  18. London-boy

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    If you want to be more accurate, then you could call the MCU movies the self financed and self produced Marvel Studios films, while the others are not. And it shows. The Xmen/Wolverine films are very different from the Marvel Studios produced ones (MCU), same for Spider-Man and Fantastic Four.
     
  19. DSoup

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    Fox bought the film rights, for an unknown period, back in 1994. But they do not own the X-Men, which is owned by Marvel.

    Assuming they have it for 25 years which would take them through to 2019. Maybe longer. I guess we'll find out although I'm sure Fox's handling of X-Men (which seems to be doing fine, with another film due in 2016) is bringing in other licensing deals for Marvel.

    Rights are just that. Marvel could, in a bizarre twist - and assuming Fox were content (and remember they collaborate a lot and Marvel Studios co-produce X-Men movies) - license X-Men for an Avengers movie.

    But I don't think it makes much sense. Marvel are already throwing in more superheroes into Avengers Age of Ultron. Do we really need Wolverine in Avengers? Or Spider-Man?

    X-Men and Spider-Man have been established and distinct superhero franchises for a long time whereas the Hulk (2008), Iron Man, Captain America and Thor films were planned to culminate in an Avengers movie from the outset, hence Iron Man's appearance at the end of the Hulk, Nick Fury at the end of Iron Man, Hawkeye in Thor, Agent Coulsen in everything and the little story connectors for those who are paying attention.

    Comic book fans understand the crossovers, cinema goers used to establish and separate franchises may not.

    Now we're truly off topic!
     
  20. dobwal

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    Kaz Hirai is CEO because he turned the gaming division around. And its not like the other divisions have been killing it profit wise.

    Plus equity carve outs aren't only used to fill the pockets of short minded hedge funds. Thermo Electron was probably one of the most successful at it as it carve out a number of subsidaries as strategy to grow from a $200 million company to a $5 billion company over a 15 year period.

    I am not advocating Sony totally selling off the gaming division. I am advocating sheltering the gaming division from the deeply systemic problems at Sony that its upper management has been unable to resolve. They have a problem creating synergy amongst their product line.

    Sony makes TVs, tabs, smartphone and at one time PCs, all products that have potential for the synergy with the Playstation brand. Yet there is little synergy that exists. Compare this with MS, which you think is ran by greedy short minded private equity funds. There is an Xbox app on every new windows PC, every win tab and every win phone. The XB1 is running a derivative of Windows and uses Azure for its cloud services. The only synergy that seems to exist is the gaming division sourcing parts from other divisions.

    I consider this problematic because one of Sony biggest issue is its ability to cost effectively manufacture components and products. Its a problem that has shown up in its electronic division with its TVs, the gaming division and now mobile. Sony is writing a 1.7 billion impairment of goodwill while it just paid Ericcson $1.5 billion to buy out its share of its mobile partnership with Sony. Why? Because Sony can't compete with cheap phones manufactured in China and has decided to kill its midrange line of phones. The PS3 has already had to deal with Sony's manufacturing problems.

    The gaming division has been successful over the years not because of Sony's upper management but because of the management within the division. Its not benefitting from synergy with other divisions. Its hard to imagine its benefitting from cheap Sony manufactured components because almost no one else is. I think Sony will be better off allowing the gaming division to operate at arm's length. If the gaming division is going to have to serve as Atlas regularly for Sony, it might as well have some autonomy.
     
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