Sony year-end financials, Fiscal 2007

[dobwal]

Does it seem odd that Sony giving a conservative annual figure of 10 mil for fiscal 08. Even without a price cut the 10 mil figure represent a too conservative figure.

Sony shipped 9.24 PS3 last fiscal year which included those 80K months in the US, less than average holiday season for the US and a slow period in the PAL markets. Sony shipped 25% of that 9.24 figure over Q4 Jan-08 through Mar-08. PS3 have been shipping on average about 750K a month this year based on those figures.

I having trouble understanding how Sony calculated just ~8 percent growth on hardware shipments for FY 2008 especially since this fiscal year is a far cry than last fiscal year. They are starting out at a much better price point that still shows traction beyond the last holiday season. GTA4, GT5P, MS2, RS2, KZ2, LP and Home will all help contribute to hardware sales. Even with a little or no drop in price point, I wouldn't expect the PS3 sales to become stagnant and fall just above the same level as last year.

 

[liolio]

Does it seem odd that Sony giving a conservative annual figure of 10 mil for fiscal 08. Even without a price cut the 10 mil figure represent a too conservative figure.

Sony shipped 9.24 PS3 last fiscal year which included those 80K months in the US, less than average holiday season for the US and a slow period in the PAL markets. Sony shipped 25% of that 9.24 figure over Q4 Jan-08 through Mar-08. PS3 have been shipping on average about 750K a month this year based on those figures.

I having trouble understanding how Sony calculated just ~8 percent growth on hardware shipments for FY 2008 especially since this fiscal year is a far cry than last fiscal year. They are starting out at a much better price point that still shows traction beyond the last holiday season. GTA4, GT5P, MS2, RS2, KZ2, LP and Home will all help contribute to hardware sales. Even with a little or no drop in price point, I wouldn't expect the PS3 sales to become stagnant and fall just above the same level as last year.

MAybe they know something about price cut we don't, auctions owners may want results (read profitability asap) now?
(pure speculation).

 

[Nesh]

MAybe they know something about price cut we don't, auctions owners may want results (read profitability asap) now?
(pure speculation).

Managers would want profitability asap. Rational stakeholders have more longe-run views

 

[wco81]

Is Live profitable? What percentage are Gold members? What is the churn of Gold memberships?

It seems there are more support issues too, like outages, generating calls, which eat into margins.

MS would probably raise prices but the platform competition probably makes that difficult to do.

Shouldn't we have had a console MMORPG now, chasing the WoW money?

 

[Shifty Geezer]

MMORPGs are in development. Sony are producing the Agency. SE have one in the works, cross platform, I think. NCSoft are creating something or other too. I guess creation didn't start early enough to get something out there now, perhaps because Sony's choices, like HDD as standard, and their online model, weren't in place for earlier decisions to be made on platform support? The biggest money-maker for Sony would be download content I expect, but considering the market that has existed there on PSP for years, they're clearly in no rush!

 

[dobwal]

MAybe they know something about price cut we don't, auctions owners may want results (read profitability asap) now?
(pure speculation).

I think Sony is sandbagging their estimates or Patcher (13 million PS3 worldwide) and EA (11.5 million PS3 for the US and Europe alone) are going to be terribly disappointed.

 

[Scott_Arm]

I think Sony is sandbagging their estimates or Patcher (13 million PS3 worldwide) and EA (11.5 million PS3 for the US and Europe alone) are going to be terribly disappointed.

Is it possible Sony doesn't have the production capacity available to produce much more than 10 million units over the next year, or there are supply issues holding them back? I'm not basing this on anything. Just throwing the idea out there.

 

[Carl B]

I think honestly they're just taking a conservative stance on estimates, and sometimes that's all it is. This year they were in the position of having missed their own estimates, and that's embarrassing for any company. They just want to play it closer to the chest now.

I listened to the conference call incidentally, and on the PS3 price cut situation I definitely think the expectation is: not for now. At the same time, I didn't read too much into the online commentary save to say that the company thinks their new online offerings and the new games in the pipe will be enough incentive for consumers to keep the current sales rate steady, as opposed to requiring a price cut. Remember that their gaming division is already break-even essentially given the last two quarters of the year vs the first two. Oneda confirmed the PS3 will be seeing RSX at 65nm shipping this year, and I think with the strong software lineup they're happy to have all the surprises this go-around be to the upside rather than the down.

 

[dobwal]

Is it possible Sony doesn't have the production capacity available to produce much more than 10 million units over the next year, or there are supply issues holding them back? I'm not basing this on anything. Just throwing the idea out there.

Yeah, but it seems odd that Sony, who is used to production rates of 1.5-2 mil units/month would have trouble with a production rate north of 833k units/month for a console thats been in production for ~ 17 months.

 

[Scott_Arm]

Yeah, but it seems odd that Sony, who is used to production rates of 1.5-2 mil units/month would have trouble with a production rate north of 833k units/month for a console thats been in production for ~ 17 months.

I was just throwin' the idea out there. You're probably right, as is Carl B, in that they're just being conservative with their estimate.

10 million just seems like a VERY conservative estimate having sold 9.2 million over the last year.

 

[22psi]

It's better to be a bit conservative and beat those expecations anyways than vice versa. Sony will have no problems beating 10m units for the next FY.

 

[LordNerevar]

I agree.Sony has a pretty solid game lineup for 2008.
I think Metal Gear Solid 4 will push a number of consoles, as well as LittleBig Planet which is clearly aiming to be a game that is going to be bought by everyone.I think it may be a PS3 selling point along with Resistance 2 which is coming in the autumn as well.
I think Sony is really being conservative here.I don't think they are going to have any problems reaching the 10 milion mark in the next FY.

 

[Shifty Geezer]

PS3 is certainly going to be in a much stronger position than it is now. If marketed properly, I'd give LBP the power to seriously shift consoles. It's seeing great interest from the existing gamers, but IMO the full potential with families is Wii-like in scope. Some lifestyle advertising showing parents creating stuff and playing with their kids would create a strong image. Couple that to all-round features, the position of PS3 as an all-round platform would be very strong. The major holdback to growth is probably going to be global economic downturn and a high price.

 

[Gradthrawn]

The major holdback to growth is probably going to be SCEA's bumbling of the marketing.

Fixed.

I think time has shown quite effectively that SCEA can't handle the marketing of such "divergent" products. SCEE seems to be able to do, though (based on comparative sales success).

I'm exited about LBP. But I don't see it moving console. Not because it doesn't have that potential. But because it won't be placed and marketed properly to move them.

 

[wco81]

PS3 is certainly going to be in a much stronger position than it is now. If marketed properly, I'd give LBP the power to seriously shift consoles. It's seeing great interest from the existing gamers, but IMO the full potential with families is Wii-like in scope. Some lifestyle advertising showing parents creating stuff and playing with their kids would create a strong image. Couple that to all-round features, the position of PS3 as an all-round platform would be very strong. The major holdback to growth is probably going to be global economic downturn and a high price.

Even if the game merits it, it may not have a high enough profile.

Uncharted, Heavenly Sword merited better fates. But as new IP, they just didn't have the kind of impact that well-established franchises have.

 

[expletive]

PS3 is certainly going to be in a much stronger position than it is now. If marketed properly, I'd give LBP the power to seriously shift consoles. It's seeing great interest from the existing gamers, but IMO the full potential with families is Wii-like in scope. Some lifestyle advertising showing parents creating stuff and playing with their kids would create a strong image. Couple that to all-round features, the position of PS3 as an all-round platform would be very strong. The major holdback to growth is probably going to be global economic downturn and a high price.

I think wii-like potential is a bit strong for LBP. IMO, the allure of the wii with families has more to do with the way you interact with the unassmuming little white box and the simplistic interface as anything. There have been adorable games before on other consoles and none have been a drop in the well to what the wii is doing now. Even if a commercial was to interest a more mainstream audience, that audience needs to get past the big black monolith, the scary controller, the maze-like XMB, and, of course, the price.

 

[Carl B]

Fixed.

I think time has shown quite effectively that SCEA can't handle the marketing of such "divergent" products. SCEE seems to be able to do, though (based on comparative sales success).

I'm exited about LBP. But I don't see it moving console. Not because it doesn't have that potential. But because it won't be placed and marketed properly to move them.

You said it. In Europe I'm sure that LBP will do great and be readily demonstrated to the public as another reason to own the system; here in the US I'd be surprised if half of Sony's marketing team even knew what the game was, let alone how to market it.

 

[patsu]

Even if the game merits it, it may not have a high enough profile.

Uncharted, Heavenly Sword merited better fates. But as new IP, they just didn't have the kind of impact that well-established franchises have.

Even as new IPs... Sony didn't really market the games well. Uncharted was not hyped until very late. These games also lack the edgy, bad-ass vibes that early adoptors, hardcore gamers gravitate towards (e.g., DMC, Gears, Mortal Kombat, ...).

You said it. In Europe I'm sure that LBP will do great and be readily demonstrated to the public as another reason to own the system; here in the US I'd be surprised if half of Sony's marketing team even knew what the game was, let alone how to market it.

Ouch ! I think there was no senior SCEA execs to market/drive/lead the Playstation brand last year (Peter Dille, where were you ?). IMHO, Scott Steinberg has done some right stuff. I hope Sony management give him enough blessings to do his job properly (That means $$$ and time).

 

[Rangers]

Is it possible Sony doesn't have the production capacity available to produce much more than 10 million units over the next year, or there are supply issues holding them back? I'm not basing this on anything. Just throwing the idea out there.

Sony has not suffered any production issues with PS3 to date. In the last three months it's been 360 out of stock in America for periods. PS3 is selling more worldwide yet is always in stock.

Here's one way I can justify it, if Sony is planning on no price cut, and expecting MS to do a big one ($80-$100). Then 360 could have the effect of stifling PS3 sales.

As everybody has said though, I'm sure it's just being conservative.

 

[patsu]

I think they probably delayed some sales because of the lack of b/c compatibility (80Gb PS3). I have seen some people asking for its availability on fora.