Sony year-end financials, Fiscal 2007

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.

When are they releasing more software for the PSEYE? Imagine if they integrated the creation controls of LBP with PSEye! Think Minority Report meets LBP.;)
 
There have been adorable games before on other consoles
They haven't been games where you create though. There hasn't been anything like LBP, so there's no comparison. And I can't believe that experiencing LBP round a friend's house and wanting to share with their kids, a couple of parents will shy away from getting a PS3 because it's big and black! If Sony can get all of their features together - Home, Dress Making, proper chat, movie service - and present their tops titles, the value proposition will be complete and very strong I think resulting in much greater take-up. WiiSports was enough to sell people on a $200 box. The complete 'PlayStation Experience' would be worth $400 to a lot of folk if only Sony could pull it all together!
 
Sony will destroy that 10M projection.

They have gone from ~100k in a month to ~300k in the US this year.
 
Sony will destroy that 10M projection.

They have gone from ~100k in a month to ~300k in the US this year.

http://seekingalpha.com/article/773...-earnings-call-transcript?source=yahoo&page=5

Colin Sebastian - Lazard

Thanks for taking my question. I guess as a follow-up to Evan's third question, I was hoping you could maybe provide a little more detail on the linearity of sales of the PS3 on a quarterly basis, assuming that the production level is pretty stable at around 800,000 units a month, just looking at the implied guidance. And related to that, to achieve profitability in the game segment, is it necessary to maintain the current retail pricing?

Nobuyuki Oneda - Executive Vice President and Chief Financial Officer

Yes, we don't give the quarterly information, but I could give you some guidelines. The game business itself is pretty much the seasonally affected business. So therefore the second half of the fiscal year, we would sell more quantity than the first half. And the pricing itself, basically we don't disclose any pricing strategies for the coming year, but as I said that the... we don't aggressively adjust the price for the coming year. And to maintain the 10 million level of the quantity this year, I don't think that we really have to adjust the pricing so much.

Colin Sebastian - Lazard

Okay. But it sounds like on balance you are favoring the profitability over unit sales and market share, is that a fair characterization?

Nobuyuki Oneda - Executive Vice President and Chief Financial Officer

Yes.
 
Looking at this

Colin Sebastian - Lazard

Thanks for taking my question. I guess as a follow-up to Evan's third question, I was hoping you could maybe provide a little more detail on the linearity of sales of the PS3 on a quarterly basis, assuming that the production level is pretty stable at around 800,000 units a month, just looking at the implied guidance. And related to that, to achieve profitability in the game segment, is it necessary to maintain the current retail pricing?

This is a pretty low estimate given that 800,000 units average a month only means 200,000 per week globaly. Given recent sales I would say that number is close to the average for when it is quiet, however, given the influx in sales for the holiday season and how Sony has scattered it's AAA release all over the course of the following fiscal year I could see the global average being closer to 250,000 a month. This would mean $12,000,000 for fiscal year 2009. I think Sony is purposely putting a low estimate.
 
Why would Sony purposely put out low estimates?
why auctions owners would be scare be huge numbers?

something doesn't add up, Sony might still losing to much money somewhere or may be pressure from other BRD manufacturers?
IMO the later is unlikely especially as no matter how SOny ship this year it looks clear that price cut are unlikely (read manufacturers will compete easily with stand alone players).
 
There could be a lot of internal pressure to push the PS3 to profitability rather than market share. Office politics and such.
 
Nah... the pressure to make money is always there, and very real. I think it's just management decision. When you compete with someone with a lot of cash, it does not make sense to do a price war. If they focus on content and other exclusive services, they can still attract buyers. They'll need the cash flow to implement innovative programs.

They can always lower the price later (when hardware becomes cheap enough to manufacture). Not saying if this is better or worse, but it's a valid strategy.
 
There could be a lot of internal pressure to push the PS3 to profitability rather than market share. Office politics and such.

It's a possibility which imply that sony still lose more than expect on hardware, thus they prefer keep high price focus on a tinier market in volume that is likely to spend more thus they can more easily recover tinier loss to begin with.

Hopefully 10 miilons is enough in the way that editors won't cut on their efforts to make multiplatform games on par on both HD systems as MS is unlikely to move way more units.
 
I think this is more a message to to MS. 'We aren't gonna lower our price. Don't lower yours so we can all make some money this year." Sony is definitely taking a reactive stance toward pricing this gen as a result of higher hardware. I wonder what they would do if MS went to $199/$250/$350 SKUs. Perhaps go to a $299/$399 overnight. I can dream can't I.

The real question is will MS be more aggressive and go for the throat. So far they have not been.
 
Not sure Sony already bleed itself to reach 400$ IMHO

MS has been opportunist as it helped them to keep a pretty hight price (more Sony has been lucky that the RroD issue has cost so much to MS or 360 price would be likely to be the same in US and Europe which obviously would hurt Sony way more in the former).
 
Well, I don't think there's much of a risk in going the profitability route. I think Microsoft will prefer that as well. While console owners like to focus on market share, businesses care about dollars. Microsoft would be happy with a year of increasing margins, I think.

This strategy just isn't as aggressive in recapturing the "console crown," but it's a sound decision.
 
It's nothing like a message to MS.
Simply put MS doesn't need Sony word to be opportunist.
Speaking of which it's a good opportunity for MS to try to gain market share in Europe and the cost of some profitability that's it, but in the long run worse it as the brand is really weak here(/UK).

EDIT with the new 65nm coming this year around summer, it would not surprise me that much if MS sell the pro pack closer to 200 euros (before edi 3 I wrote 300 euros which is higher than the actual price)

this doesn't mean that they would sell a toon (given their momemtum now and thus not that hurting money wise) but this is long term opportunism.

EDIT2
other opportunity for MS reduce shipment till the next 360 rev is here and definitively put an end at the rrod costs.

EDIT 3
WOw did some crazy mistakes (change in bold)
 
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It's nothing like a message to MS.
Simply put MS doesn't need Sony word to be opportunist.
Speaking of which it's a good opportunity for MS to try to gain market share in Europe and the cost of some profitability that's it, but in the long run worse it as the brand is really weak here(/UK).

EDIT with the new 65nm coming this year around summer, it would not surprise me that much is MS sell the pro pack @ 300euros.

this doesn't mean that they would sell a toon (given their momemtuml now and thus not that hurting money wise) but this is long term opportunism.

If Sony doesn't drop prices, i don't think you'll see MS drop prices in North America. Europe is another story, as you've said.
 
Speaking of which it's a good opportunity for MS to try to gain market share in Europe
MS already offer the cheapest current-gen console in Europe. It's not pricing that they need to worry about. They'll be competing with content. A content war is probably better for us than a price-war, for those of us who already have consoles anyway!
 
MS already offer the cheapest current-gen console in Europe. It's not pricing that they need to worry about. They'll be competing with content. A content war is probably better for us than a price-war, for those of us who already have consoles anyway!
:LOL: I don't own a "new gen" console c'mon let me expect even cheaper hardware :LOL:

more seriously if the trend continue in Europe they won't sell that much, so it's not a huge risk as people already owning the console will still continue to buy content for their system.

In the long run MS need to develop a "fan base" in Europe it's clearly what kill them here lack of mindshare.

I was discussing with some really casual gamers lately (best friends for most of them) and they told me that the discussion at their job (when speaking about console) resolve about the Wii or the PS3.
 
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