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RubberJohnny

The Trouble with Sony

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So the "look over there" thing keeps coming up in the Trouble with Nintendo thread, and to be fair, the forum does have a bit of a blindspot. Despite being a company with fingers in many pies, they're in a much worse financial position than Nintendo.

Sony have a bunch of loss-making divisions, and like Nintendo before them have just announced a billion dollar loss instead of a predicted full year profit, along with layoffs of another 5,000 staff, making this 30,000 since 2008. Their PC division, including VAIO is being sold off to some investment group, and TV is being restructured and spun off. This leaves the gaming division as their poorest performer.

http://www.bloomberg.com/news/2014-02-06/sony-forecasts-annual-loss-as-hirai-turnaround-stalls-on-tvs.html

Sony Corp. (6758) unexpectedly forecast a loss for the year and will cut another 5,000 jobs as Chief Executive Officer Kazuo Hirai restructures the television and personal-computer units in the face of shrinking demand.

The net loss will probably total 110 billion yen ($1.1 billion) in the year ending March 31, the Tokyo-based company said in a statement today, scrapping its revised October projection of 30 billion yen profit.

The CEO pledged “painful” cost cuts, the first profit in a decade from TVs this year, and improved performances from smartphones, games and Hollywood studios as he tried to post a second straight profit.

Amid reforming its TV arm (and splitting it into a stand-alone entity), it's going to sell its PC business and VAIO brand to Japan Industrial Partners (JIP), with the final deal set to be done by the end of March 2014.

The company cites the costs of restructuring its TV and PC units for the revision.


It's not all bad news, however, the PS4 did boost the gaming divisions profits a bunch:

http://www.theverge.com/2014/2/6/5384654/sony-q3-2013-earnings

The games division saw a 64.6 percent boost in sales over last year, thanks to the PlayStation 4's strong launch and a weakened yen. Sony's mobile products and communications division, which included PCs until now, saw revenue increase 44.8 percent year-on-year powered by a "significant increase in unit sales of smartphones."


Just don't hold your hold breath for a Vita 2.

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I always used to quote BttF: "All the best stuff is made in Japan".

Nintendo, Ibanez, Sony, Yamaha, Toyota, Mitsubishi..

Recent years have shown that other nations are catching up and sometimes surpassing the efforts of what Japan once offered. I don't think there's anything wrong with what Nintendo and Sony are offering, it's just that their competitors are eating up vast amounts of market share.

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It's always been easy for competitors to beat sony PC's as they have been shit and overpriced. Their Tv's have also been overpriced for a long time. Selling off the PC side of things is a very good move.

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Well, the future for the PS4 is looking bright while the PS3 will be around for a while too so in that regard there isn't really much trouble for Sony it seems. The only thing that must be burning money like a motherfucker is the Vita, and at least that one is being well supported with the kind of games we like. But yeah, a Vita 2 seems unlikely for a good while. That said, this one can go on for at least 5 years I'd say. Maybe more. It does everything I could possibly want from a handheld at any rate. All we need is bigger and cheaper memory cards.

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So the "look over there" thing keeps coming up in the Trouble with Nintendo thread, and to be fair, the forum does have a bit of a blindspot.

This is a games forum and Sony games division is doing fine. Can a Mod change the thread title please?

One.
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Their first handheld sold very well, but ended up getting hacked to death. Shame really as it had some brilliant games.

One of the problems with the PSP and Vita is that they were marketed as slightly cut down versions of either the PS2 or PS3 at launch, (apart from the awesome Lumines :wub: on PSP)

I, of course was drawn into the PSP hook line and sinker !! The thought of RR with local multiplayer( I played this with 3 other friends), Wipeout (with FREE DLC) Toca (again brilliant fun multiplayer) Problem (for me) was the propietary disks were as brittle as fuck and the analogue nub was a bitch on the thumb with prolonged play time.

It seemed to me that a lot of games were cut down versions of the home console version, not enough titles were designed for the PSP.

Still boot up Lumines every now and again though ^_^

Looks like the Sony has learned and embraced indies and had more games written for the Vita, shame it's not reflected in sales....

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So what that bloomberg article is saying is that there's no money in Products and Sony need to concentrate on being a content provider - games and movies.

But that content was always seen to drive product sales: blu ray players, 3d tvs (or ultra HD), music players, Playstations.

Games I get, especially if you can only play Sony games on Sony consoles, but are Sony that great at delivering first party or exclusive games? If they can't, then is the gaming business model no different to minidisc? I genuinely don't know if that is a potential issue. Is it all about exclusives now, which there doesn't seem to be much of....

They also say revenues are up 64% for the games division, I take it that it didn't produce a profit due to the R&D on the PS4? Sony is in the high end/ high R&D console market - can you justify huge R&D expenses every 3 or so years as part of a new console cycle, with the last year of a consoles lifespans being the only one that produces a profit ? Loss making 3 years, profit 1 year, loss making 3 years etc

MS are being told to get rid of the Xbox division because it's barely turned a profit, if at all, when you take total R&D losses into it.

So a genuine question is: can the console gaming industry continue as it has done? Or have tablets genuinely changed the landscape? Do developers go where the money is? Will investors accept loss making gaming divisions or flog them off/dismantle them?

Interesting times....

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So what that bloomberg article is saying is that there's no money in Products and Sony need to concentrate on being a content provider - games and movies.

But that content was always seen to drive product sales: blu ray players, 3d tvs (or ultra HD), music players, Playstations.

Games I get, especially if you can only play Sony games on Sony consoles, but are Sony that great at delivering first party or exclusive games? If they can't, then is the gaming business model no different to minidisc? I genuinely don't know if that is a potential issue. Is it all about exclusives now, which there doesn't seem to be much of....

They also say revenues are up 64% for the games division, I take it that it didn't produce a profit due to the R&D on the PS4? Sony is in the high end/ high R&D console market - can you justify huge R&D expenses every 3 or so years as part of a new console cycle, with the last year of a consoles lifespans being the only one that produces a profit ? Loss making 3 years, profit 1 year, loss making 3 years etc

MS are being told to get rid of the Xbox division because it's barely turned a profit, if at all, when you take total R&D losses into it.

So a genuine question is: can the console gaming industry continue as it has done? Or have tablets genuinely changed the landscape? Do developers go where the money is? Will investors accept loss making gaming divisions or flog them off/dismantle them?

Interesting times....

Consoles will just go back to selling less than £20m lifetime sales to the likes of us, and we'll get the new equivalents of Viewtiful Joe, Burning Rangers and RE4. It will be glorious. Fuck CoD.

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Consoles will just go back to selling less than £20m lifetime sales to the likes of us, and we'll get the new equivalents of Viewtiful Joe, Burning Rangers and RE4. It will be glorious. Fuck CoD.

All those games came out after the Playstation made things Mass Market.

The PC indie scene is producing classic after classic at the moment though, so really I don't care if consoles are all cancelled tomorrow. I'd be a little bit disappointed that I'd bought a PS4, obviously, but in terms of games that can exist when only devoted people are buying them is concerned, I don't think there will be any lack of gaming-based entertainment if it did happen.

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Their Tv's have also been overpriced for a long time.

They've really streamlined the TV branch of business and the prices rival cheaper brands these days. Bought a Sony 42" Smart TV last year for about £450 and it's great. Probably still haemorrhaging cash but at least they're addressing the issue.

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The PS3, coming from the PS2, was a massive drop with regards to percentage of sales.... The PS4 may do better than the 3, but I can't see either the One or the PS4 getting to the ludicrous heights of the PS2.

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Just don't hold your hold breath for a Vita 2.

Anybody who was holding their breath for that would have ran out of air ages ago, or the Darwin Awards would have another couple of candidates.

At least Hirai finally sorting out the long troubled TV division ($7.8 Billion cumulative losses over the last decade), selling off the loss making PC division seems prudent, they can't compete, bail out before it becomes like the TV division. Not seeing much mention of progress on the medical imaging and sensor business though, Sony have a decent potential competitive edge in those areas and Hirai already identified them last time as a potential growth area.

Sony's board didn't pay no fucks to the Activist Investor who told them to sort out the Film/TV division which he claimed was run like shit and should be way more profitable than it is.

They also mentioned the likely breakeven time for the PS4, sort of puts the claims of they should cut prices or sell cheaper games into perspective, still ages away, anybody expecting Nintendo to compete with Sony/Microsoft on hardware power should take note:

Still, expensive development costs left Sony warning it will take at least two years to break even on the console.

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Sony's fine. PS4 is proof. End thread.

Edit: I wish Walkman meant anything these days too. Precious memories.

I suppose RJ's point is that Sony isn't fine... if the PS4 does PS3 numbers. It will not be considered a success at all.

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