Sony Q1 loss $312M, game division loses $45M

[Shifty Geezer]

I think saying the Vita should be a phone is ridiculous. Being a phone wouldn't guarantee it's success and it wouldn't necessarily survive off just that plan alone.

Of course being a phone won't guarantee it's success, but at least people won't look at Vita and think to themselves, "my pockets are already full. I'll just take my mobile with me. It has good enough games anyway." Having to be accompnied with a phone makes Vita extremely unportable. If it could relpace the phone that people have to carry around with them, that's a huge barrier to entry removed.

Sony should go for the iPod Touch audience, those who can't afford (or don't want) the monthly smartphone payments, but still want a smartphone-like experience.

I don't know about the rest of the world, but you can get a Galaxy Ace in the UK for £130. You can then put in whatever PAYG SIM you want to, if you want mobile functionality. And you can equip it with an <£9 16 Class 10 MicroSDHC card (of course cheaper are available, but that's the last card I bought ). A Vita can be got for £200 with no storage whatsoever. + £40 for 16 GBs, or +£12 for 4 GBs.

For anyone wanting that smartphnoe experience, Android offers far better value and versatility. An iPod with controllers permanently attached to it isn't a good device for hanging off your belt listening to music while running, or pulling out of your pocket to look something up on the 'net. As such, Vita will never be able to compete with smart devices. It is squarely positioned to sell to people who want core gaming on the go. If this market is tiny, as I suspect, then Sony went after a market that just isn't there, which is why Vita could be doomed. This wouldn't be the first time a company has released a product for which there wasn't a viable market, so it shouldn't come as a great surprise if it happens.

 

[specwarGP2]

I don't know about that. Plus, how do you text without a phone number? Unless it's just Vita to Vita texting, in which case it would not really satisfy the average phone users texting demands.

Google voice gives you a phone number that you use to text and make calls without needing an actual phone.

 

[liolio]

Well sepaking of cell phones, I don't even see how it is disputable that SOny should have released the PSP2 as a phone.
The xperia play sold in decent quantity no matter it's pretty underpowered hardware.
I actually I think that I would prefer a Xperia play to the psv. Running on android it just do so much more: crazy number apps, casual games with crossplatform gaming, you can play on Onlive and so if you have a stable connection play for example the last batman.

And the Xperia play is far from optimal, it's not a google product, it's lagging behind wrt to update, (actually truth is it never gonna get them...) it's underpowered. It's imho too tiny (something close to the Galaxy note would be great), I'm not sold on the design (personal issue but not fond at all of sliding design).

Anyway I've got there many times. I still don't think that the PSV will completely bombed, it's too early to make the call but it's obvious that a proper Xperia play phone and the matching 6/7" tab might have made Sony a shit load of money and they would have set a standard in mobile gaming looking forward as well as setting themselves as a relevant Android actor.
For all the devices sold with a data plan Sony could have pass on subsidizing the hardware or make a fair profit on it.

 

[wco81]

Phone might have helped a bit at the margins. But I just think fundamentally there isn't much of a market left for $50 portable games.

Even people who grew up on various Gameboys can get way more utility and value without buying $50 games. Not just cheap mobile phone games but all manner of video and other media, social networking, etc.

 

[Platon]

Phone might have helped a bit at the margins. But I just think fundamentally there isn't much of a market left for $50 portable games.

Even people who grew up on various Gameboys can get way more utility and value without buying $50 games. Not just cheap mobile phone games but all manner of video and other media, social networking, etc.

I agree with this. I hardly pay $50 for the AAA games for my home console where I can enjoy the games/graphics on a bit screen TV and surround sound. Games that I have for my mobile I have payed like $2-4, but most of the time when commuting and want to kill some time I use my mobile for surfing around the web.

Of course the dedicated hand held consoles do have their benefits and I could see me paying extra for that. For example the controls are just on a different level, that is something that the phones plainly suck at and that is why the games I do have are more puzzles, strategy kind of games. I have tried some action games but my hands are always in the way, you loose half the screen trying to control the game. But still, you will then need to carry around and extra gadget and so on which I don't see myself doing anyway.

Simply put and from an totaly egocentric point of view, to me it seems that the market is just too limited with all the smartphones and other on line social distractions...

 

[Arwin]

It's not like I pay full price for most of my Vita games either (in fact, hasn't happened yet so far). Off the top of my head, these are my most expensive games:

Rayman: 29,95 (completely worth it, as a single player game I like it better than the PS3 version)
Lumines: 29,95 (licenced music and 3D graphics are worth the premium, but I do have some issues with this game having a bad UI and leaderboards stuff)
Virtua Tennis 4 + Uncharted: Golden Abyss: 44,95 (launch deal, get two for price of one)
WipeOut 2048 I think I paid 19,95, and then got the DLC for free because I already had the PS3 versions

Lots of PSN only titles cost me sub 10 (mostly around 7), like MotorStorm RC, Super Stardust HD, Mutant Blobs Attack, Pinball Arcade, Foosball 2012, Escape Plan (I used a 5 discount I got with the Vita). I also bought that tanks AR game, for 1,49, pretty crazy little thing.

And of course Trials of Montezuma was free (and I played that a sickening amount). I actually bought 3 euro worth of crystals just to support the developers (would otherwise never pay money for such a useless amount of crystals). It is really surprisingly good, much better than Bejeweled Blitz, which I've played a fair amount on iPhone.

Competition on iOS comes almost exclusively from social games like Ruzzle (Rumble), WordFeud, and SongPop. I occasionally try other stuff, but apart from games for my son and Angry Birds, I haven't found much that I enjoy playing on iOS - too many small games, and the controls on Vita are just better for most types of games.

But of course, it is true that you bring your phone everywhere, and the Vita not always. That doesn't matter though - I bring it when it matters, and even in House it is extremely comfortable to be able to bring a gaming device to wherever you feel like playing and still have a great experience.

So far, the Vita throws a long shadow over anything iOS has offered except for the social casual stuff (and PSM could help there in the near future), so personally I'm very happy with it, and think as the price goes down and more games keep pouring out, more people who are real gaming enthusiasts will buy the thing. That's not to say it will ever be as popular as a smartphone, but it doesn't have to be. It just has to have a good 5 year run with a decent audience, say ending around 50 million is more than enough to call it a big success, with software sales almost guaranteed to improve over PSPs in that case.

 

[jonabbey]

If Sony were to come out with an Android+Vita device, I might be interested, but otherwise I'm good with carrying around an Android phone and tablet. No room for a Vita in our household, unless it were something I could plan on giving my daughter, but Nintendo has always made better hardware for a 4-5 year old.

 

[liolio]

If Sony were to come out with an Android+Vita device, I might be interested, but otherwise I'm good with carrying around an Android phone and tablet. No room for a Vita in our household, unless it were something I could plan on giving my daughter, but Nintendo has always made better hardware for a 4-5 year old.

Same here, I'm seriously tempted by the Nexus 7 but I'm still waiting to see what MS brings on the table and how the gaming offering evolved on the different platforms.
I don't have that much of a budget for anything including gaming, I could spend some money on a tablet as it is so convenient for recreational usages while still covering a lot of basic uses of a full blown PC.
With tablet prices set to trend around the 199$ I can't see neither the psv or the 3ds offering enough value for get my money.

 

[Bigduo209]

Spoiler

Of course being a phone won't guarantee it's success, but at least people won't look at Vita and think to themselves, "my pockets are already full. I'll just take my mobile with me. It has good enough games anyway." Having to be accompnied with a phone makes Vita extremely unportable. If it could relpace the phone that people have to carry around with them, that's a huge barrier to entry removed. I don't know about the rest of the world, but you can get a Galaxy Ace in the UK for £130. You can then put in whatever PAYG SIM you want to, if you want mobile functionality. And you can equip it with an <£9 16 Class 10 MicroSDHC card (of course cheaper are available, but that's the last card I bought ). A Vita can be got for £200 with no storage whatsoever. + £40 for 16 GBs, or +£12 for 4 GBs.

For anyone wanting that smartphnoe experience, Android offers far better value and versatility. An iPod with controllers permanently attached to it isn't a good device for hanging off your belt listening to music while running, or pulling out of your pocket to look something up on the 'net. As such, Vita will never be able to compete with smart devices. It is squarely positioned to sell to people who want core gaming on the go. If this market is tiny, as I suspect, then Sony went after a market that just isn't there, which is why Vita could be doomed. This wouldn't be the first time a company has released a product for which there wasn't a viable market, so it shouldn't come as a great surprise if it happens.

If that mentality was so popular the 3DS should've been dead already, and don't even get me started on the iPad and other tablets. Sony's problem is the execution of the PS Vita, not necessarily because it isn't a phone. It is the pricing, the OS features, the software, the expensive proprietary media, and connective online services that are the make-or-break elements to the handheld. Will a smartphone please a bigger audience? Yes, but not everyone wants or needs one. Kids of certain ages, people who want basic phones, or a need for other side diversions keep a market like that alive. iPads and other tablets (Wi-Fi or 3G/4G) clearly show there is an audience for something that isn't small enough to fit in pockets, the overall experience is what counts the most for those kinds of luxury devices.

The Vita is flawed because of the incomplete experience it offers, it shows plenty of potential and can still sell if Sony can help it live up to that potential. Saying it should be a smartphone is still an excuse, a dedicated handheld can still sell if done right.

Oh and Sony does make smartphones, how well are they doing at this point? If hardcore portable gaming is dead then adding PS games on phones won't help against Apple, Samsung, HTC, and whoever else is fighting for that marketshare.

 

[liolio]

If that mentality was so popular the 3DS should've been dead already, and don't even get me started on the iPad and other tablets.

Well Nintendo had to take a loss on hardware for the device for sales to take off. Still I would be interested if Nintendo provide data about how sales are split worldwide. I suspect that without Japan the 3ds situation would not look that good.

Sony's problem is the execution of the PS Vita, not necessarily because it isn't a phone. It is the pricing, the OS features, the software, the expensive proprietary media, and connective online services that are the make-or-break elements to the handheld. Will a smartphone please a bigger audience? Yes, but not everyone wants or needs one. Kids of certain ages, people who want basic phones, or a need for other side diversions keep a market like that alive. iPads and other tablets (Wi-Fi or 3G/4G) clearly show there is an audience for something that isn't small enough to fit in pockets, the overall experience is what counts the most for those kinds of luxury devices.

Well there is some truth in this. The vita is neither designed for kids neither to be that portable. That's the issue Shifty was writing about, the PSV is design to be a replacement for the PSP and looking at the form factor one of the first PSP. There may no longer be a market for such a device. I do agree with him it's too early to tell though.
As for Sony execution, well the E3 was a bit of a disaster but there are other events in the world this year. I don't feel like the software line up is that bad for a new console.
Looking at the OS and the features, imho Sony can't compete with what the competition provides and what people are used to now through their phone. If they try to be iOS or Android they are just gonna waste more of their money. I would call that not bad execution but bad decision.
People buy tablets even though they don't fit in the pocket but what they offer across the board the PSV or the 3DS will never touch.
The release of successful 7" tablets @199$ is not going to help the PSV that's sure. Nexus seems to do very well, Amazon seems set to answer... next years we may see device that are overall more powerful than the psv on the hardware pov (based on Krait or A15 cores, with 2gb of Ram and a potent GPU) for 199$.

The Vita is flawed because of the incomplete experience it offers, it shows plenty of potential and can still sell if Sony can help it live up to that potential. Saying it should be a smartphone is still an excuse, a dedicated handheld can still sell if done right.

How could Sony make the experience complete? I mean look how much work MS had to do to have minecraft ported to the 360 with 60 millions users, what can Sony do?
There are stuff Sony can no longer compete with, Nokia had possibly some of the best OS out there and gave up.
Either way I'm not sure about what you mean by complete, the PSV to me looks like a pretty high end device, there are stuffs I expect for a device in that price range Sony will never provide by them selves. If you mean more complete as a "toy" we may agree to some extend.

Oh and Sony does make smartphones, how well are they doing at this point? If hardcore portable gaming is dead then adding PS games on phones won't help against Apple, Samsung, HTC, and whoever else is fighting for that marketshare.

Well leveraging the playstation brand is there only competitive advantage, so far they haven't used it.
But lets not be blinded by Sony situation, they can't compete without it imho.
Samsung is designing CPU cores and Soc, they produce display, they produce ram, etc. they are imo both better technically and as they produce their own stuffs from ground up they can afford to sell at lower price or make more margins.

I will definitely agree on something with you, it's price Sony should not have design a product intended to be sold at 250$, it's gonna cost them some money as I can't see the device take off at such a price. Only the most spoiled or lucky kid are gonna have such a present and for adults, well it's definitely compete with Kindle, Nexus, iPad, etc.

EDIT
To make it clearer my POV is that either Sony had to release a line of products based on Android with a strong accent on gaming (thus including proper control) and they try to establish an alternative to google play for games (at first if successful well they may have leverage it further), either they just had to produce a fancy 3ds.
Imo the PSV fails at both. May be your point is that the main problem of the psv is that it fails at the latter.
For a portable and reliable device, Nintendo imho nailed the perfect design with the DS. Sony should have copied that design shamelessly.
A foldable design (without a second screen) would have let a lot of rom to implement proper controls ( I tried the PSV again around 30 minutes at best buy the other day, I don't have gigantic hands still I find the device too busy when it cones to buttons, sticks, etc.).
Sony should have come with a sexier 3DS Xl, that's was not an awesome challenge the 3DS has imo many lacking for cores gamers:
It's under powered imo and lack a second analog stick.
It didn't need a quad cores, neither such a potent gpu to attract gamers. It didn't need the touch pad in the back, neither it needed the hi quality screen (it may make money to other sony division but it's not helping the device...).
Something akin to Apple A5 was enough.
I feel like Sony should have stuck to arm only and go with a pretty off the shelve A9 dual core + mali GPU (/ buy exynos 4210 straight from Samsung). I suspect ARM gpu solution to be cheaper than powerVr ones.
In my opinion it was possible to come with that fancy device (vs the 3DS) @199$ with Sony not having to bleed to much if they were to lower the price to say 149$.
An agressive strategy would have been to have a development price driven and release at the same price as the 3DS so 149$. It's not like they didn't know that more and more devices that fit in your hands compete for your money and that gaming is taking off on the most successful of those devices, phones, be it mostly casual gaming.

 

[liolio]

I won't do a second edit... lol

Some time I wonder what's going on at Sony, their strategy line almost like like a troubled teenager "U need the biggest c**k of the high school to get laid".
I mean they knew the 3ds was underpowered, it's their direct competitor but they wanted to beat Apple instead...
They are selling device that use SoC they are not designing (phones), why in hell they though they had to come with a quad core and a massive gpu to compete, especially on their own?

If you look at the 3ds pushes and what a exynos 4210 (so the 45nm version) or an equivalent can push, as well as taking in account the fact that the psv would have 4 time the ram... Well it's the difference between the dreamcast and the xbox at least. how that was not enough to make a difference for core gamers?
Both system would still have been close enough for developers to came with mostly the same game, but the difference on screen be it graphic by themselves or physics would have been massive.
Looking forward the evolution was already available (exynos on 32nm HKMG for example) was already available.

Then there is the second analog stick and the overall ergonomic, a foldable design would have the controls more "breath".

I'm not opposed to the proprietary sd card though pricing is a too high. Piracy is definitely a concern. I see nothing wrong with Sony making money on them, while trying to prevent piracy.
Actually Sony may have fit two sd card slots, so if the device takes off and used as say an ipod you can have a lot of content on your device / minimize swapping operations.

Costs should have driven the development, it's not the case in any way.
The screen for example, even in house it has to be expansive, not too mention that it's over specced too (like the whole system imho) and some of the most demanding games are not rendered at its native resolution. There must have been more economical solution still providing nice power characteristic.

When you put everything together from non necessary R&D efforts to useless expanses (back touch screen, high quality screen) and the overall "over specced " nature of the device I feel like Sony missed again a opportunity to really challenge Nintendo in the handled realm and trade their crown in the living room for one in the handled realm.

I mean here who would dismiss such a product without thinking twice about it:
-It's sony and comes with editors supports and outstanding exclusive
-It could have been a bargain at 169$ ( a bit like a Nexus 7 @199$ it's tough to resist for geeks...)
-It obliterate the 3ds on cross platform games.
-It comes with a nice library of psp games (for those that doesn't upgrade it's still nice early on)
-It has so much more of a potential as a media player and for occasional browsing for example(vs the 3DS).
-It has a big screen (5" or less if costs called for it, the 4.3" in the psp wasn't bad either) vs the 3ds 3" screen.
-The screen is multi-touch, they should have include a stylus.
-It doesn't have a second screen but controls are better, there is a second stick.
-It feels more reliable (foldable) and can fit in your pocket (even though it's still not an iPhone)(as a side effect (+ lower price) the device is more kid friendly)

Ultimately who really care for the quad core CPU and the quad core GPU? I mean some people were trying to make that point, the result is there people make arbitration between the utility and the price of a device, the psv as it is with high specs at this price is not worth that much people money.

The more I think about they may as well scratch the PSV, I know they won't and that would be an hell to sell that to early adopters, but I wonder how it can fly for Sony without them loosing money they don't have at a time where they are out of luck: Yen is high, it's clear to the world now that their is a market for 7" tablet @199$ 32nm and 28 should be cheaper soon enough and that gonna hurts Sony further.

EDIT
As a side note I wonder if the PSV hardware can be fitted in a phone, both power size and with regard to the form factor (it would be significant bulkier than even a galaxy note).

 

[rekator]

Liolio, simple the target for Sony is the "teenagers" you're speaking but from the 90's. They're don't change their strategic and from PS3 experience that's work 'cause PS3 target "teenagers" from PS One and Two area, but for PSP not so much, it's not the same "teenagers" and for actuals teenagers "Big c**k is on Phones… And don't forget that the Connect Social aspect is more important for them than others.
Problem for VIta it's that they're not appealing for Kids and not so much for actuals teenagers and young adults, the potential for Vita is more on people who grow with the Playstation brand, but is not a big market…A loyal market but not so big… Sony need to focus on this point, small numbers of customers, like around 20M can be small , but with high potential.

 

[eastmen]

Would sony be better off as a 3rd party ?


THink about it , they have alot of developer muscle but it seems like they are falling off in the hardware sector. Sony could make alot of money with their games on the 3ds and on the xbox

 

[Deleted member 13524]

EDIT
As a side note I wonder if the PSV hardware can be fitted in a phone, both power size and with regard to the form factor (it would be significant bulkier than even a galaxy note).

At 28nm, I believe a 4-core Cortex A9 + SGX543MP4 would fit in a ~4.3" smartphone form-factor.
It couldn't be 7mm thick, but they could do a ~12mm slider and fit a large-enough battery.

 

[liolio]

Liolio, simple the target for Sony is the "teenagers" you're speaking but from the 90's. They're don't change their strategic and from PS3 experience that's work 'cause PS3 target "teenagers" from PS One and Two area, but for PSP not so much, it's not the same "teenagers" and for actuals teenagers "Big c**k is on Phones… And don't forget that the Connect Social aspect is more important for them than others.

Well that's why I said in the other post there are stuffs Sony can't compete with, you need a proper OS to do so.
For the kids, well you make me feel like an old fart... lol. It must be true, I'm out of touch with this generation (my friends kid are younger) and I just don't like the state of mind of the few I meet.

Wrt to the c*** word I didn't use it for the teenagers who would buy the device because it's the best/biggest but for SOny. I mean why do they think they have to come with something bigger than anyone else? They are competing on the handled market, right?

Problem for Vita it's that they're not appealing for Kids and not so much for actual teenagers and young adults, the potential for Vita is more on people who grow with the Playstation brand, but is not a big market…A loyal market but not so big… Sony need to focus on this point, small numbers of customers, like around 20M can be small , but with high potential.

Well if they can reach 20 millions they may make money, Nintendo made money more than often out of pretty tiny user base.
The issue is will they or how long is it going to take. We see that @ 249$ it's not cutting, which means that Sony has to lose more money to sell its device.
Overall I do not agree with this description of the potential market for a PSP2. May the PSV fit into that description, but other design choices were possible and I believe that there still a market for a PSP2 (so a game only device + may be some extra). Either way they had to release a line of Android phone, tabs,. What they did is to kill the development of xperia play 2 because they saw it most likely as threatening.

 

[liolio]

At 28nm, I believe a 4-core Cortex A9 + SGX543MP4 would fit in a ~4.3" smartphone form-factor.
It couldn't be 7mm thick, but they could do a ~12mm slider and fit a large-enough battery.

Well that's investing lot of moneys again on what is most likely already a loss.
Not too mention that by the time they do that it won't be that great vs the competition.
There are design issues the quad core is not tegra 3 like with its low power fifth cores.
etc.

As a phone it may not look that good.

EDIT
a reall forward looking design would have been as the inspiron duo below with proper controls instead of a keyboard and in form factor matching a 4<x<5 inches creen.
http://www.dell.com/content/topics/topic.aspx/global/products/landing/en/inspiron?c=us&l=en&cs=19