Business Insider: Sony is playing a dangerous game to continue its dominance of Microsoft

Keep dreaming about what? This is a business expert highlighting the quite obvious and precarious situation facing Sony going forward, if they lose market share to Microsoft & Nintendo, and their projects fail like PSVR and so on, which it no doubt will, they're essentially fucked as a company.

This isn't years past where Sony has lucrative business options everywhere and are generating huge profits from other divisions that they can fall back on, those days are gone. If they face another PlayStation 3-esque situation, they likely can't come back from it, they don't have the capital to fund those kinds of losses anymore.

They're a company at the end of their rope with all of their eggs in a single basket, and don't think for a second that they're too big to fail... Circuit City was around for 60 years, the market leader in electronic stores and did billions in revenue, far more than Best Buy, where are they now?

@dynamitecop: I really think you hit the nail on the head.

Nintendo squirreled money away for years in order to have the financial cushion that they do. They learned long ago, that the console game is a finnicky one. It will have ups and downs, and despite Nintendo's odd way of doing things.... They seem to have their financials on lock.

MS is a different kind of animal. MS is one of those few companies that seem to have a bottomless pit of money. People say that there is no way that MS is going to keep spending money on their gaming division, and they just up and buy Mojang for 2 billion bucks. They say that MS is going to exit the console market, and MS announces not one.... but two new consoles. They can afford the ups and downs of the console game, because most of their revenue comes from other divisions.

Sony is the current console sales leader. That sums up all the positives that they have. They don't have the vast cash reserves that MS enjoys. They lack the frugality that enables Nintendo to sustain itself through the bad times. Sony has already sold everthing including the kitchen sink in order to sustain itself. At this point, Sony is completely dependant on its PS division. If the PS division stumbles, they lack the liquid cash to recover.

Having the cushion that MS, and Nintendo enjoy, is not something that Sony currently has. In big company terms, they are living check to check.

Here's the thing too, the only assets of real value that Sony could liquidate aside from SPE if they begin sinking are their game studios. Ironically this would introduce a paradox as they would have to sell off what is keeping them alive to survive, at least for a time, and who do you think would be the highest bidder? If they screw up it's going to be a total chain reaction spiraling downward.

dream on if you think sony is going anywhere, the videogame market is as big as it has ever been

Do you live in some kind of fantasy world? Sony is doing exceptional in one division, that single division is the only thing keeping their company alive. A simple series of bad decisions could financially ruin them, do you not understand that? Sony has never had a successful peripheral, not one, and in two days they are releasing a $500 one with god knows how much money tied up in R&D and manufacturing... They're releasing a $500 peripheral to console gamers, $500, console gamers, think about this... A peripheral which is not only stagnating greatly in the PC sector, but is also releasing with mostly shitty games and it's $100 more than their not even released most expensive console... This thing is DoA, it will have initial fanatic pre-orders and then it will absolutely flatline.

On top of this, they just increased the price of PS+ by $10 for absolutely no reason with no improvements, which I would not be surprised if it actually cuts down user numbers. To make matters worse, all the money they have been throwing at PSVR and its generally mediocre games has clearly taken away money and resources from their first party game development for the PlayStation 4, they have almost nothing going on..

Then there's the PlayStation 4 Pro, right out of the gate it's already known to be vastly inferior to Microsoft's coming console, every specification of it as a device will be inferior, absolutely everything. God, I can just keep going, and then you have the PS4 Slim, it's being out-performed by the Xbox One S because it's literally just a PlayStation 4 albeit uglier and smaller and people are still just buying the regular PlayStation 4's over it, so all that money spent on a redesign as of now has been wasted...

The market as a whole being large has no bearing on Sony's future in this market, they literally cannot afford to lose their share of the market that they currently hold. An Xbox 360 and Wii level event like last generation where Sony was tied for second place happening again would be a disaster for them, they could not afford to lose that much ground in their current financial state. Top this off with all the stuff going on above? They're setting themselves up for a perfect storm of financial collapse..

They're making losing bets left and right and sacrificing their bottom line to do so...

@dynamitecop:

You pretty much nailed it dude

Since Sony isn't making handelds anymore. NX might get free exclusives from middle tier Japanese studios. Games like danganronpa (and other visual novels) are gonna flop on ps4 because everyone who games on those platforms care about graphics. Ys might flop as well. If NX gets those games that's where I will be going.

I feel like PSVR is spreading the fronts to wide when they should be strengthening other areas. For example, building up PSN and investing into more aaa games with multiplayer/co op whether it be first party/console exclusive. If Days Gone has campaign co-op that would be awesome. Just rather see more focus on aaa titles offering multiplayer/co op than VR.

I think people are making too much out of this and missing the finer point of the article, and that's simply not to have all your eggs in one basket.

Sony's domination of gaming market is keeping their head above water for sure. But if that should ever falter, there's no backup for the company to pick up the slack to keep funding their game division or their other arms of business.

Sure MS has probably shown to lose lots of money in game division too but at the same time they have a large revenues, lower cost business, and a large taxable income to write off losses and depreciation, and make large acquisitions with. Because of this, they can weather situations like what the Xbox One has endured this gen without much consequence.

By contrast, Sony couldn't weather such a storm without needing to sell assets, cutting off arms of their industry that haven't made them money in years. Sony already did a lot of this in years leading up to their success with PS4, at best it has only stopped the bleeding. PS4 success has been big, big enough to offset losses of their other industries, but unless they're able to recover and become profitable in those other industries, they won't have any ability to offset any losses in gaming should they ever face that.

Exactly.

I hope they do get in financial trouble and have to sell the Spider-man movie rights back to Marvel /crosses fingers

Hey a comic fan can dream

The only reason we can´t have a rational conversation is because you are irrational.

I think you're all skirting the point here by flipping this on Microsoft as if they have some type of non-capacity to trade equal footed blows with Sony, it happened before, it can happen again and with their market reach they could take things far beyond Sony's capacity to do anything,

Analyse this shit for starters.

You complain because people think MS doesn´t have the capacity to trade equal blows with sony,and the you proceed to claim that it had happen before and that could happen again.

That is total bullshit the last time MS and sony were close to equal footing was when the xbox came,sony release first but MS had the stronger console and was priced equally as the PS2,the outcome was not pretty.

The xbox 360 was as low as $299 and 1 year before the PS3,not to mention it had a barrage of high quality games by the time the PS3 landed,that is not equal footing at all.

Yes they are the PS4 Pro is fu**ing call PS4 fool it is a damn PS4 no different from the freaking xbox one S which has faster GPU and 4k capabilities which the original model totally lack the PS4 Pro is a direct competition to the XBO or any MS console release now or close.

Yeah hyped faded for the PS2 when the xbox came hahahahaha...

Sony has done 4 consoles from those 4, 3 had been great success and the one that fail still was able to match and pass the competition sales wise.

The PS3 was $600 the PS2 $300 that was the real problem.

Nothing....Haaaaaaaaaahaahahahaa

Man what is this fu**ing obsession of you lemmings with holidays,MS has shit this holiday a multiplatform racer and several games that flopped to hell,Gears is 84 man,Recore,Quantum Break all failed to gain AAA status some could not even gain AA status,when Sony already has Uncharted 4 and Ratchet and still TLG to come and several other games...

WTF are you even arguing in that fu**ing second sentence man what the fu** man.?

You are the one who need to be conscious of where in hell the xbox brand really stand now,you need to freaking touch earth and get MS head out of your ass,is incredible the amount of crap you make up.

Sony is freaking solid,compare to MS shaky brand who can't even take off in US let alone worldwide.

https://www.amazon.com/best-sellers-video-games/zgbs/videogames#4

This now this is today this is what is happening the PS4 with 4 different bundles on top of the XBOS Gears bundle including 2 freaking Uncharted bundles..

If tham Gears bundle does 30k on amazon sony is doing 120k or more with those 4 bundles is not even close.

You need to understand that no matter how hard you try to repeat that sony is doing bab or have loss their direction that doesn't make it true at all.

Holy shit the 3rd wall of text is even more deluded shit..

The things they are doing now exemplify traditional Xbox values of old. If these ideologies and values would have been of importance at the time of the development and launch of the Xbox One, they would have crushed Sony, absolutely crushed them, especially coming off of the heels of the Xbox 360.

The old xbox values included games EXCLUSIVE games which MS now doesn't have.

And you tell me i can't have a rational conversation...hahahahahahaaaa

Yeah MS would have crush sony hahahahahaaa.... Specially coming off the heels of the 360 the console with 1 year head start with as low as $299 price tag that ended last and could not hold a lead even on its best day...Hahahahaa

I can fu**ing wait for scorpio to release to i can trow in your face when it loss to the pro.

Thread bookmarked..ahahaha

@tormentos: When you learn how to construct a tasteful and sensible paragraph, and your posts stop being uncontrolled mental diarrhea, I'll respond to you.

That post gives the appearance of you having multiple strokes while writing it, it's a jumble disaster.

@tormentos: Your only source is Amazon sales, that makes you a complete joke! You would fail to run a business if that's the only sales chart you care about.

@FireEmblem_Man: What other source can you suggest? Microsoft doesn't release numbers because they're not great.

Complain about a wall of text, within a mountain of text. Meta, bro.

Sure turdmentos doesnt actually read anything that is posted

Oh look at the cute little lem financial expert. Lems have been predicting Sony's demise since 2007. It actually makes me feel bad that Sony continues to do so good and shatter the dreams of lems every year. Poor clueless creatures.

well judging from your pictures, I think you're the one living in a fantasy world but that's besides the point.

If I follow your reasoning a steel factory is going to go out of business because it only produces steel. Bad decisions can ruin any company, even microsoft. Heck, your reasoning would actually make some sense if sony wasn't doing very well, but they dominate the console market at this time. The fact that so many people have a ps4 is selling them too, since people will need replacements and new users will want the same console as their friends.

It still handles the higher resolutions overall compared to the xboxone as well, the xboxone fat version is dirt cheap and sony is still outselling them.

You're minimizing the potential success of vr as well. It's true that vr is not selling very well on the pc but you're ignoring the elephant in the room. Not only are you looking at 800$ for the device only , you also need some space to make it work properly for a lot of games and you need a monster pc. This thing need some configuration as well, something that is completely ignored by the pc crowd. A lot of consolites won't touch a pc with a ten foot pole, just because they don't have any technical know how whatsoever.

The oculus is cheaper but it doesn't come with touch controllers like the vive, and it's owned by facebook. A lot of people aren't bothered by this but a lot of them are, valve and sony don't have this relationship with customers. Besides, the price mentioned here is usa prices. The vive in europe (belgium) where I live costs a 1000 euros. That's like 1100 dollars, pc hardware is more expensive as well. This is not the case for sony products, they cost the same as in the usa.

All this things combined make sony psvr a much smaller step to get into vr. If they can get the price even lower this thing can sell quite well, look at the wii. Tech like this is very interesting to buy and a lot of people will probably buy it, just because of the novelty and potential it has.

The ps4 pro may seem like a bad business decion but that thing is dirt cheap and it has double the power of the ps4. Microsoft's scorpio may seem more interesting but not everyone will want to change sides that quickly, especially because the ps4 pro has complete backward compatability. It's not that so many people will want to part with the ps4 that quickly either. Especially when most people still have a 1080p tv and all the games are released on the ps4 as well, even vr.

It's normal that the slim version doesn't sell very well at this time, but the old ps4 is a good system. Still it will leave the market and the slim will be the only one left. They needed that slim to compete with the xbone s. But the low sales on the slim at this time really don't matter very much, people still choose sony products over others. To me and you microsoft seem to have the better products but that's not how the world works. Sony will continue to dominate the market because of the lead they have, over time other companies can take away market share of them of course but sony has enough time to keep the company healthy.

The article that the op posted proves how little the author knows about the console market, comparing it with smartphones and apple devices is really comparing apples and oranges. Consoles are very specific devices and the only three players at this time are microsoft, sony and nintendo. Sony is completely dominating and nintendo is virtually non existant. Microsoft is just doing average. So anyone thinking sony is in danger needs to a lot more research before making such a statement.

When you learn to make an objective argument without letting your completely deluded and bias opinion blind you first then post.

1-There is nothing equal on 2 consoles that release 1 year apart and with a price gap of up $300.

2-MS name mean shit to EU and Asia outside windows,and that has being proven winning US UK again will not lead the xbox one or scorpio to victory.

3-Trying to beat sony on this market is not as easy as you want to make it see,last gen is a testament to that sony was out of focus with the PS3 price and still they loss to the wii by less than 20 million units,and beat the 360 that was behind,the generation before that the PS2 destroyed the GC 156 million units to 24,and the xbox 156 million to 25 million.

So the only generation were sony really loss they were way close to the winner and ended second.

4-Trying to use sony fiscal situation as some point to illustrate how MS can win,this is an argument where i can even quote lemmings claiming last gen that sony was doom,that they were going bankrupt and could not make a powerful console...lol

And we know what happen this gen.

And finally you are deluded if you think MS can take this business and carry it way over what sony already did,the xbox 360 reach little over half of what sony did with the PS2,and that was its best console,the xbox one even with freebies and huge price drops haven't been capable of beating sony for more than a couple of NPD..lol

I advise you to look into amazon again and see how those Uncharted bundles are beating Gears ones and see how Pro is the top seller....

Mostly all the time a console wins NPD also wins amazon,that is because there is no indication what so ever that people who like the PS4 in particular only shop on amazon fool,or that the tendency isn't present in other stores as well.

Like 97% of NPD sales have been spot on with amazon for console winner.

https://www.amazon.com/gp/bestsellers/2016-07/videogames

July NPD look at who sold more consoles and who won July NPD.?

https://www.amazon.com/gp/bestsellers/2016-08/videogames#2

August NPD the same the XBO won sales on amazon and NPD.

https://www.amazon.com/gp/bestsellers/2016-06/videogames#1

June NPD won by sony and guess what won by sony on amazon as well..lol

So yeah nice try..lol

@tormentos:

Honestly do you actually read anything in this topic? This doesn't boil down which console is selling better or who has the best preordered bundle. It's about weather Sony can take a massive loss in funds if pro and or psvr fails.

Ms has been brought up because they have a considerable amount of money more then Sony so their failings aren't as disastrous as sony's could be.

No I agree with tormentos we need to allow amazon charts in system wars.

ITS TIME FOR SYSTEM wars to evolve. AMAZON is a huge telling on how the console war is going its a huge business and is phenomenon for US buyers.

I dunno why the hell we aren't using more amazon charts an such on system wars.

The guy who wrote this article seems to have forgot that Sony no longer makes PCs.

Fortunately for Sony, Nintendo, and MS, none you have any idea what you are talking about. It is obvious that business and finance are not in your wheelhouse.

You just don't seem to understand anything, absolutely nothing.

• The PlayStation released a year before the Xbox and I've seen you going off about how the Xbox was a failure because it sold less, why does that logic not apply here? Because it's not convenient? The Xbox 360 and PlayStation 3 were on equal footing as game consoles, Microsoft simply made better decisions than Sony when it came to the release and early/mid generation support of their system. It's no ones fault that Sony entered the market with a system costing nearly twice as much as the competition but Sony's, if Sony's name were not on the box and it were a different company, things would have ended right then and there. However that was in 2006, they got by because of their financial situation at the time and because of their name, they neither have that financial status any longer and their name doesn't have the same weight it once did.

• Microsoft sold like 25 million Xbox 360's in Europe, their name means something and when they deliver a better system and are continually striving to do better as they have been all around, it will sell.

• First off, there's no evidence that the PlayStation 3 beat the Xbox 360 or vice versa, it was a total wash and basically dead even, no one knows those final numbers. As I said before, this is a different Sony than existed in the mid-2000's, that's the whole point of all of this. Also, the PlayStation 2 was available for 13 years until it was discontinued not to mention it cost almost nothing after five-six years on the market, had thousands of games and took off in third world countries. Everyone else in the world was moving onto the Xbox 360/PlayStation 3 while the third world who could only afford something like a PlayStation 2 continued to buy them. The console lost most of its first world relevance in 2005/2006 and largely sold in the background in third world nations until 2013 because it was dirt cheap and still highly supported.

• Last generation Sony's fiscal situation wasn't entirely reliant on the PlayStation, it is now, that's what you don't get. If they in some way screw up, they're fucked, this isn't some kind of exaggeration and they have nothing to fall back on, try to understand that 78% of their revenue comes from PlayStation. You keep defending them, this isn't about insulting them or them needing defense, they're in a position they've never been in before and do not have the capital to offset a large financial loss, they can't afford it.

• Like I said, you seem to have absolutely no ability to forward think, here you are talking about pre-orders, current amazon sales and god knows what else. A year from now this landscape will have three new consoles, a more powerful 8th generation PlayStation, a "9th generation" Nintendo system and an 8th generation Xbox which will not only be the most powerful console available by a wide margin, it will have the most capabilities. Vive and Rift pre-orders were sold out, what happened post release a few months down the line? Apart from early adopters who bought off of hype, it's been stagnant with virtually no growth. The same fate faces PSVR, possibly even worse especially in the face of it costing $500 to a much more financially tamed console community which is always concerned about money, it costs more than the consoles themselves, it was a bad idea and puts Sony at huge risk.

• The Pro could very well take off, but it's got serious competition on the horizon that will absolutely eat its market share. The PlayStation 4 released into a non-competitive environment as the most powerful system against two weaker systems which were faltering out of the gate, its success was a measure of the relevant competition available. Microsoft has course corrected their failings completely and are in a better position and ideological state going forward than they ever have been, not to mention they will be releasing Scorpio which again will dwarf the Pro, and if Nintendo's NX is a hit, the PlayStation 4 Pro has a very, very tough road ahead.

Sony has greatly spread out their finances in the PlayStation division, they have all of their eggs in this single basket, and if these extended ventures like PSVR and the Pro are unsuccessful or less than ideally successful and they lose enough market share, they don't possess the financial capital to combat this, that is the point. They could have too much money wrapped up in extended PlayStation ventures that could financially cripple them.

Agreed.

@cainetao11: You don't get business or economics at all

Not every market is the same and comparable to each other

That's like saying why doesn't General Motors make more money than MS because cars are more expensive than computers.

GM/Chrysler don't make as much money as Toyota, but they are still big players in the auto industry with patents and brands worth hundreds of millions of dollars.

Sony has 30% of the music record industry with artists like Michael Jackson and Beyonce. You're telling me those artists aren't worth anything? Sony's record business alone is worth billions (the entire catalog at least) And if some of the other businesses Sony owned were independent, they could operate on their own. Sony is brought down by their TV, Mobile, and small electronics sectors.

Same thing with MS, they have certain aspects of their business that bring them down, Mobile Phones/tablets/xbox and they are held up by Windows Software.

Both companies have something to worry about. You just don't want one aspect of your business to keep you afloat. Apple is in danger of that too.

Apple has itunes / apple music / ios app store / ipad / ipod / iphone / imac / macbook / iwatch / apple tv / beats headphones

How more diverse would you like apple to be this company is in everything man its got its paws on everything its dominating. if iphone dies okay macbooks and imacs are everywhere.

ya know what i mean this company isn't going anywhere its too big its too diverse. microsoft fly on the wall compared to apple. Apple just doesn't even care about places like microsoft or sony there worried about big hitters like samsung an stuff.

@ProtossRushX: I would still argue that they are held up by the Iphone though, in fact they closely resemble Sony with Playstation, although not as bad.

Iphone is anywhere from 50%-60% of Apple's Revenue.

https://www.statista.com/statistics/382260/segments-share-revenue-of-apple/

LOL sure. I guess I don't LOL if you only knew.

Nah Apple customers spend money. Apple has 11% of the smartphone market but accounts for 90% of the revenue generated from smartphone spending.

iOS App Store brings in 75% more revenue than Play Store despite difference in downloads

Apple is in a much, much, much, much, much, much, better spot than Sony, last time I checked Apple was worth more than MS and Google combined.

I'm no business insider but I really see no options for Sony except to go all in on PS, they've put themselves in a tough spot. They have PSVR and there is no telling how that will work out, then they have the slim and the Pro in the PS family. So now with NX and Scorpio coming what do they do to keep the momentum built up from PS4 with 2 new consoles launching next year.

PS fans want PSVR, PSVR games, PS4pro, PS4 games, and a new PS5 in 2018-2020. There is no way Sony can pull this off without short changing something in their line-up. MS has forced their hand Scorpio was a well played plan by Microsoft. Now I get what Spencer meant when he said "it's a marathon not a sprint..", don't think he was talking about games.

So now Sony can either spend big trying to stay relevant with MS or they play their cards close and go the subtle route, all the while loosing market share to NX and Scorpio.

@slimdogmilionar: True, they are in a better spot....

But all that revenue is coming from mostly 1 product....the Iphone. What happens if they pull a blackberry? Or a Note 7?

I'm a not Crapple fan, but a large part of their revenue comes from their services like iTunes and Crapple Music and you don't need a iPhone or iPad to purchase those services.

wow let me count

- Sony is doomed

- Port begging the article "bu.. but sony should release the games on pc

- MS releases Scorpio, Sony will automatically lose the 20 million units ahead

-"Dont read too much into it" the article

And all that in one article. Wow!!! Just wow

@flyincloud1116: Where do you think those sales are coming from? From people using their iphones. Check out the link in my earlier post.

@Star67: Even Apple did pull a note 7 it won't stop their current customers from using itunes and the app store, then they still have macbooks, imacs, ipads, ipods, Apple music, etc. Apple doesn't have all of its eggs in one basket.

@slimdogmilionar: The amount of people using Imacs, macbooks, and ipads is no where near the amount that use Iphone. 60% of Apple's revenue comes from the iphone. 15% comes from services.....another 15% from ipads.

How are people not getting this?

Whoa lets not get carried away both companies Sony and Microsoft be fine but also they need to know we don't Pro PS4 and Xbox Scorpio yet. Now the company I worried about is Nintendo and have bad feeling about NX their making

@Star67: we get that the iphone is most profitable part of Apple, but it's not the only successful part of their business. They are not hurting for money in anyway, so you cant compare Sony to Apple in that sense. If they were to have a Note 7 incident they would be fine. You don't hear anyone suggesting Samsung is in financial trouble because of the Note 7 issue. Why? becasue they have the money to cover the losses due to discontinuing the Note 7, they have other parts of their businesses that are still thriving. Samsung could discontinue the Note brand completely and still be okay.

Like I said before Sony is spreading themselves thin because the PS brand is carrying the whole company, but if they focus on PS4 game development above all else.., I think it would be the best option for them. I have a feeling Vr is just a fad and if so Sony should just take the VR earnings and put back into game development and PSN. VR is a huge bet for someone in Sony's position to be betting on, but maybe they knew that all along and they just wanted the revenue from that initial push for the money. Or they could just let 3rd party and indie devs handle VR gaming and keep their first party working AA caliber games. Either way they are gonna be under some major pressure come this time next year. The xbone S along with MS holiday lineup is already doing that this year. One good thing though if you wait you'll probably get a really good deal on a Pro next year.

You're missing the entire point of the thread. The xbox brand isn't just a console, its now becoming a part of the windows 10 platform. I imagine this is more to fight the potential rise of steam machines than it is to try to stop sony. But sony's existence entirely relies on the brand and hardware associated with playstation. M$ can endure poor xbox sales, but we can't say the same with sony in poor ps sales. PS HAS to succeed in order for sony to survive. The discussion isn't about whether or not ps4 will fail, its how sony is dependent on ps4 and what could potentially happen if the brand falters. And the market is lining up more in M$'s favor for the long term. They are making more consumer friendly choices. Responding quickly to negative feedback. Releasing great games. They'll be releasing a significantly more powerful system than the ps4 pro next year.

To be fair, that's how businesses work. Its whether or not sony plans and mitigates blows or if they are riding on the edge. I imagine they can whether most storms and have time to restructure the business, even if they become more of a video game business only or even just a publisher. So long as they can find a sustainable middleground and ps4 is definitively a move in that direction after ps3.