Sony is bleeding money - business strategy discussion

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

  1. London-boy

    London-boy Shifty's daddy
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    Oh you know what I meant :) but yes we're very off topic!
     
  2. Silent_Buddha

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    Just some notes. I haven't looked over the financial report extensively yet, but...

    The impairment to goodwill doesn't mean they are out of the woods with regards to continued losses in the Mobile Communications division. It is a sign of how bad things are in the Mobile Communications division.

    It is basically saying that the value that Sony had for that division was far higher than the fair market value of that division. In other words, Sony overvalued the division. And the correction was proper accounting to bring it in-line with with what the actual market value of the division should be.

    Which basically means bad things no matter which way you think of it.

    Either their Sony was purposely inflating the value of their Mobile Communications division to make financial reports look better to investors (Highly highly highly unlikely).

    Or

    Their Mobile Communications division is doing extremely badly. Even worse than was hinted at in previous financial reports. If this is the case, this doesn't mean that the MC division will suddenly start doing better, just that it should be more accurately accounted for in the future. Which means if they continue to do badly, it will likely reflect even worse on future financial statements than on past one. However, since much of that was due to devaluation of the PC business, it may not be that bad. But, we don't know exactly how much of it was due to the PC side of things and how much to the phone side of things. As a side-note, Sony are forecasting the MC division to do worse than previous forecasts for FY ending Mar. 31 2015.

    It's not something you can just handwave off and say they did great, if not for the impairment of goodwill. The impairment of goodwill is a sign of them not doing well. Additionally Sony is in no way, shape, or form, out of hot water yet.

    But they are at least somewhat stable. And as PS4 does increasingly well, it will definitely help their bottom line. But it's not the only division and the others will have to continue to do well as well. And that's a good sign as well, as all were up on a YoY basis.

    Also a good sign is that their forecast for FY ending Mar. 2015 has stabilised at a 40 billion Yen loss. So, it's bad in a sense that they are still forecasting large losses for the year. But it's good that the forecasted loss hasn't grown like it did with the previous July forecast.

    So, the best that can be taken out of this is that they are stable for now. Not getting worse, and not getting better. But there are more positive signs for the future than negative signs.

    Regards,
    SB
     
  3. wco81

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    I was thinking about that the other day, as I saw the COD commercials, the POV one where they're swinging or jet packing over bridges and so forth.

    They should do that with superheroes, let you take control of different ones to overcome obstacles in different ways.

    It would be interesting to have different superheroes in one game but for rights reasons, they would probably want to milk one superhero per game.
     
  4. cal_guy

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    The film rights to X-Men/Spiderman remain with FOX/Sony as long they continue to release a movie within a set timeframe (that's publicly unknown). That's why there's have been so many Spiderman and X-men films in the past 15 years. X-Men and Spiderman movie are exclusively controlled by FOX and Sony.
     
  5. holsty101

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    Arad left Marvel Studios May 06 according to wikipedia, 2 years before they started releasing their own films (and, perhaps not coincidentally, around the same time they would've kicked off production for their opening salvo of IM & TIH, tho he gets a producer credit for those, and only those, 2 mcu films, perhaps as part of the deal to leave). Disney, I would guess, still had/have to honor the contracts in place when they bought marvel, I know nothing about business practices and contracts but that seems pretty logical.

    Apparently there's a fair amount of bad blood between fox & marvel -

    http://www.bleedingcool.com/2014/10...-645-as-january-kicks-off-fantastic-fourever/

    If they're prepared to cancel their own comics to lessen the exposure for fox's ff films I don't think they're collaborating *at all* let alone in the close manner you seem to think they do. As LB mentioned they can't even use the word "mutant" in the mcu films due to the fox contract, surely that'd be one of the first and easiest things to straighten out if they were actually on friendly terms.

    Personally I think a lot of the sony/fox produced films display how much say marvel have, if they had *any* say in what goes on surely we would've avoided stinkers like Elektra, FF 1&2, (ASM 1&2 imo) and so on? IMO while the quality of the mcu films varies they've not released anything that sinks to those kinda depths.

    Tho that's clearly circumstantial... I do think what Kevin Feige has to say supports that viewpoint -

    http://www.movieviral.com/2014/03/3...ca-the-winter-soldier-age-of-ultron-and-more/

    Straight from the horses mouth! :wink:
     
  6. DSoup

    DSoup meh
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    Maybe I should do some research ;) Can't believe I hadn't realised Arad had left Marvel, especially as Feige is at every Marvel film press event.

    My super bad :yep2:
     
  7. DSoup

    DSoup meh
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    Yeah, I don't get why so many companies, Sony included, are insistent on making phones and tablets when most of them aren't even breaking even.

    Even Samsung has recently announced a massive reduction in profits. Yeah, they're still making billions, but it just shows how volatile the industry can be even when you're the giant of the industry. We saw both Motorola and Nokia fall from consume mindset and dwindle into insignificance. It's a brutal industry.

    Just get out, Sony :yep2:
     
  8. London-boy

    London-boy Shifty's daddy
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    See!!!!!!! :lol:
     
  9. FarticusMaximus

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    If you haven't tried it I would highly recommend Lego Marvel. It's exactly what you describe and is a fantastic game (IMO) dripping with fan service.
     
  10. London-boy

    London-boy Shifty's daddy
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    The Lego Marvel and Batman games are bloody amazing! The new Batman one is coming out this month and it looks incredible, and fun as always!
     
  11. Shifty Geezer

    Shifty Geezer uber-Troll!
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    XMen Legends
    XMen Legends II
    Justice League
    Marvel Ultimate Heroes
    Marvel Ultimate Heroes 2 (Includes XMen, Avengers, Fantastic Four, Daredevil, and others)
    And yes, the Lego one, but I felt that too restrictive in game design. Too Lego-y and not super-hero enough.
     
  12. Strange

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    You do notice that FY ending 2015 also includes the 170 billion yen hit and still resulted in 40 billion yen loss? (hint, that means on a daily operating basis they're profiting pretty healthily this year)

    Sure, lets ignore the fact that Sony is making money on almost every division, which includes the Mobile division if you didn't count in the impairment of goodwill. Forecasts for next year are generally positive.

    I'm unsure why you're trying to paint a bleak picture when the general market consensus is that Sony is really turning themselves around after restructuring to post profits in the very near future.


    Please do note that they actually had to pay income tax.

     
    #572 Strange, Nov 7, 2014
    Last edited by a moderator: Nov 7, 2014
  13. FarticusMaximus

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    There are obviously certain guidelines that any Lego game needs to work within, but I thought they did a good job for the most part of shaking up the formula to fit with superheroes.

    Things like stealth, mind control, spidey sense, web slinging, large character strength, flying/hovering characters, laser vision, etc, coupled with the more open world structure of the recent Lego games allows quite a bit of the distinctiveness of the Marvel/DC characters show through, IMO.
     
  14. Silent_Buddha

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    I'm not sure where you are getting that other than trying to paint your own picture of what I said.

    If you actually read what I wrote, it was quite positive for Sony.

    And you cannot just wave away the impairment of goodwill. Hence they actually still forecast lower performance for the division even after taking into consideration the impairment of goodwill due to expectations of lower performance for mobile phone devices.

    People attempting to wave that away and say things are great aren't doing themselves, the readers, or potential investors any favors. A loss is a loss. It doesn't matter why there is a loss, it is still a loss. It still impacts the company and its strategic planning. It doesn't magically go away.

    Despite that, you'll note that almost everything else I pointed out was positive for Sony. Indicating that there is more positive going for them now than negative, which wasn't the case in the past.

    However, they are still at best holding steady. Their own internal forecast for the future is still for a loss, if things proceed as expected. You can never truly forecast the future, but with everything I pointed out in the post that you read, but apparently misunderstood, they have a better chance for meeting or exceeding that, than they do for underperforming forecasts.

    Regards,
    SB
     
  15. Strange

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    Sure

    So positive. So upbeat. Ok, you set your tone.

    Things you said that was positive were



    Forecast for 2014-2015 is bound to be a loss due to the impairment of goodwill. Forecast for Q4 2014-2015 and annual 2015-2016 is where it matters, since that's where you won't have the impairment of goodwill (which is not reoccurring) stuck into the financial report.
     
    #575 Strange, Nov 8, 2014
    Last edited by a moderator: Nov 8, 2014
  16. Silent_Buddha

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    I really hate when people discuss things they don't understand as if they understood it.

    The impairment of goodwill is bad no matter how you look at it. It basically means that Sony were accounting for things improperly, and not in a good way. That is bad. As I stated. There is no good way to look at it.

    The impairment of goodwill to adjust MC (formerly MP+C) isn't going to magically make the division do better in the future. The division wasn't doing badly just because of the PC portion it was also doing badly because of the mobile phone portion which is still there.

    Adjusting it so that it properly reflects the actual value of the division doesn't mean the division won't continue to spiral down the toilet bowl. It only means that the division is now properly being accounted for.

    Got it?

    And then I go on to point out that they are now stable, which is is incredibly positive considering their performance the past 5-10 years. Stable is a good place to be.

    And then I go on to further point out the many good indicators going forward. Noting as always that nothing is ever guaranteed. Especially when you are investing in something as risky as movies and music. But how, overall they have a better chance of doing better than they do of doing worse. Which is again far better than could be said at most points during the past 5-10 years.

    So, yes, what I posted was positive for Sony. Without ignoring the bad things. As any responsible person would do when looking over a financial report without ulterior motives.

    Hell, Sony have been one of my top 2 favorite consumer electronics firms since the late 70's. I want them to do well, but I'm not going to blindly ignore anything bad related to the company. I have been a very very sad puppy the last 10+ years as I've seen them struggle in the audio/visual space.

    Regards,
    SB
     
  17. Strange

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    Where did you see anybody saying impairment of goodwill is actually a good thing?

    Actually, yes, it is a good thing, just not from a financial standpoint, especially if you only focus on Q3 results. Now they're acknowledging that there are assets being overvalued and doing so allows them to report correctly instead of painting a pretty picture with pretty flowers while manure rots inside.



    I pointed out that when you ignore it the mobile division is actually profiting, along with most other divisions.

    Unless my math is horribly wrong,
    when x - 176 billion yen = -172 billion yen it usually means x = + 4 billion yen , give or take since they rounded the numbers, obviously.
     
    #577 Strange, Nov 8, 2014
    Last edited by a moderator: Nov 8, 2014
  18. dobwal

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    The impairment is from a plan to cut the midrange line and concentrate only on their high end phones. They are basically reducing the size of their mobile business and making sure the balance sheet reflects that reduction.
     
  19. DSoup

    DSoup meh
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    They so need to ditch mobile communications (and so do a lot companies). There profits are massive but shared between a handful of companies while everybody else, Sony included, is just burning cash with no prospect of turning things around.
     
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