Sony May Post Biggest Loss in 4 Years on PlayStation 3 Consoles

[rekator]

Almost always all console manufacturers sell their hardware at a loss at the beginning. Its not something new.

Are the costs you are talking about assumed numbers or did you take them from some credited place?

Also are you sure the PS3 has an attach rate of 5 games per unit? I think its closer towards 3

Something else you brought up though and I d like to get some more clarification, but are various parts of the console manufactured in different fabs and then assembled at one fab?

That would increase costs a lot

Loss for new consoles is a idea what manufacturers like to tell but like I said it's real for the global begun console bilan, not for the manufacture cost…

For manufacture cost of PS3 I take a example where Sony gain 100$ by PS3 to show what you can loss money may be also when each PS3 gain money…

The 200$ loss is from iSupply, I'nm think this number is not real…

I take volontary a attach rate game superior to the real, it's to show that the gain by sales games in the beginner of a console live is weak and don't compensated big losts on the hardware size.

And I volontary don't integrated Marketting cost and Sony Game division fonctionnemen cost for PS3 cost who increase a lot the global loss of PS3.
And I don't integrate reduction manufacture cost on the 10 years example, this is to hard to do with the littles infos we got for the moment…

I make this post only to show what the 200$ loss on each PS3 is false.
I personnaly think that each PS3 lost money on Japan market, made a few $ on US and by the conversion rate made more money on the EU market.

But I also don't integrated gains from the PS2 sides who will be important and can compensated PS3 loss for the first year…
I try to only show the business plan for PS3, but it's like the MS Game division it's really difficult to hve the real good numbers…

 

[Nesh]

Sorry if I sound rude rekator but its hard for me to comprehend what you are saying. Its your English.

If the PS3 would have an attachment of 5, it would mean that close to 3 million PS3s (out of 5.5m shipped) is unsold.

Well perhaps. This isnt necessary though. It can have an attach rate of 3:1 and still have 3 million consoles unsold which means there are also lots of games unsold.
Its not that clear.

I am sure though its around 3 games per unit as it has been reported some time ago if I remember correctly.

If vgchartz are any indication (claiming they are consoles sold reported by retail) it mush have around 2 million unsold since they are reporting around 3.3 million sold

 

[rekator]

Sorry if I sound rude rekator but its hard for me to comprehend what you are saying. Its your English.

And, I'm sorry for my bad english (I will try to do best, and need to practice more) and thanks to take time to interprate it and to understood that I trail to tell!

 

[Kryton]

It's all a case of NPVs and DCFs. Sony are amenable to losing big money in 1 quarter, compared to the potential return on their investment in the next 39 (10 year life-span). The price is determined by looking at these forecasts, which appear to be accurate - only ~.5 million out. They'll have plenty of these targets over the life-span of the console that they must meet for their risk/return ratio to be what they want. Obviously, this requires assumptions on currency rates (these can be made because a company like Sony can buy/sell currency futures to get an effective strangle option) and that the targets are met (as I say, very close).

Taking the 1st quarter of the launch and saying "it's all downhill" when Sony themselves predicted this is pretty stupid. Personally, I wouldn't start shorting Sony shares yet.

 

[inefficient]

Sorry if I sound rude rekator but its hard for me to comprehend what you are saying. Its your English.

Well perhaps. This isnt necessary though. It can have an attach rate of 3:1 and still have 3 million consoles unsold which means there are also lots of games unsold.
Its not that clear.

I am sure though its around 3 games per unit as it has been reported some time ago if I remember correctly.

If vgchartz are any indication (claiming they are consoles sold reported by retail) it mush have around 2 million unsold since they are reporting around 3.3 million sold

An attach rate of 3:1 with 13.2 million units of PS3 software sold means 4.4 million PS3's sold. 1.1 million unsold.

And I'm sure up to a few hundred thousand bought one merely as a BR movie player. So the number is in line with expectations. In North America there are probably about 200k-400k sitting on store shelves. This is about what you would want for a product that moves 100k+ units every month.

 

[Crossbar]

An attach rate of 3:1 with 13.2 million units of PS3 software sold means 4.4 million PS3's sold. 1.1 million unsold.

It says shipped here.

It may be hard to draw any conclusions about the actual numbers of units sold from those "shipped" numbers, but it does not look that good. I predict that a price cut is not far away.

 

[Nesh]

And, I'm sorry for my bad english (I will try to do best, and need to practice more) and thanks to take time to interprate it and to understood that I trail to tell!

No problem

 

[Carl B]

@Rekator: The PS3 loses money on each unit sold.

Worth noting also that although the loss in the quarter is greater than last years, the profit on the year is slightly higher. I don't mention the yearly profits in order to distract from the gaming divisions losses of course, but for the less 'aware' members, the thread title can subtly reinforce an idea that Sony lost money this year, when they actually made money.

 

[PARANOiA]

But - but - Sony are the number 1 for revenue in the monthly NPDs!

 

[22psi]

NPDs are out tomorrow, will be interesting to see if PS3 can break the ~25k per week sold barrier it has been in for the past 2 months.

 

[PatrickL]

Well Famitsu numbers are under 9 000 PS3 last week. Will see Media-Create numbers tomorrow.

 

[RobertR1]

Sony themselves are stating about 2million consoles sitting around in stores:
http://www.kpmginsiders.com/display_reuters.asp?cs_id=188175

"Sony said it shipped about 5.5 million PS3 consoles by March 31, of which about 3.6 million were sold."

 

[one]

NPDs are out tomorrow, will be interesting to see if PS3 can break the ~25k per week sold barrier it has been in for the past 2 months.

The PS2 figure will be more interesting IMO.

 

[22psi]

Sony themselves are stating about 2million consoles sitting around in stores:
http://www.kpmginsiders.com/display_reuters.asp?cs_id=188175

"Sony said it shipped about 5.5 million PS3 consoles by March 31, of which about 3.6 million were sold."

Actually:

Sony failed to hit its own PS3 sales targets, Chief Financial Officer Nobuyuki Oneda said. Although the company had forecast global shipments of 6 million machines by the Mar. 31 end of its fiscal year, its factories made and sent off just 5.5 million. Worse, the actual number of PS3s in stores was closer to 3.6 million. The remaining 1.9 million were either sitting in warehouses or en route to stores, leaving as much as $1.1 billion in inventory. Perhaps that's why the company chose to stick to a more conservative sales forecast of 11 million units this year.

http://www.businessweek.com/globalbiz/content/may2007/gb20070516_346923.htm

 

[PatrickL]

The PS2 figure will be more interesting IMO.

Why ? Anything special coming ?

 

[dobwal]

Actually:



http://www.businessweek.com/globalbiz/content/may2007/gb20070516_346923.htm

Goes to show you that just because a journalist writes for businessweek that doesn't mean they know what they are writing about.

Although the company had forecast global shipments of 6 million machines by the Mar. 31 end of its fiscal year, its factories made and sent off just 5.5 million. Worse, the actual number of PS3s in stores was closer to 3.6 million. The remaining 1.9 million were either sitting in warehouses or en route to stores.

That makes absolutely no sense unless we have all been fooled and the PS3 is currently sold out in almost all retail stores (B&M and online). 1.9 mil represents the number not in consumer homes not the number of consoles still in Sony's posession. 1.9 mil represents inventory, en route and on store shelves so 1.9 mil doesn't represent $1.1 billion in inventory.

Earlier this month Nintendo said it had shipped 5.84 million Wiis in the same four and one-half month period. Microsoft, which had a 12-month head start, upped its tally to 10.4 million units through March.

MS upped that tally to 10.4 back in December or January as by their press release. Thier shipped total is somewhere north of 10.9 mil as they claimed they shipped 500K last quarter and will be roughly at 12 million come end of June.

Slashing the console's price—the high-end version with a 60-gigabyte hard disk drive retails for $599—wasn't supposed to be in the cards until September, says Macquarie Securities' David Gibson. Merrill Lynch estimates the discounts would shave nearly $600 million off the division's sales. But the company might not have much choice. "Sony will have to cut the price sooner than expected—something it can't afford to do now," says Gibson.

How many consoles can Sony sale between June and September, which present one of the slowest times of the year. Even if a price drop spurred Wii like sales (which I doubt it would) that would represent about only 2.5-3.0 million additional consoles while putting a major dent on Sony's bottom line. Why not sit still as a price drop in September would still have the PS3 cheaper than last year going into the holiday season.

You can bet analysts will be revising their figures—and expectations—downward significantly. One hope is that Sony's new games chief, Kaz Hirai, who replaces Ken Kutaragi in June, can juice the lineup of PS3 games fast enough to avoid cutting console prices.

This is hilarious as there is no way you can "juice the lineup of your games" as a short term measure to help delay pricecuts.

 

[Arwin]

Why ? Anything special coming ?

May he is thinking of God of War 2's impact on PS2 sales ...

I'm personally interested in PSP sales also. I've seen some people having been tipped by the pricecut. Maybe not even that many, but the PSP has been doing fairly well anyway and there's more and more positive news surrounding it (stuff like God of War PSP and Final Fantasy VII getting rave previews)