ZOMG - Sony slashes 2008 earnings forecast by 38% - PS3 profitability uncertain

Is the PS3's future not only Not going to last 10 years but may not even last 5 years before Sony stops the bleeding and launches a new console or just sticks with PSP & PS2 ?

Just a little SW question so ya know, don't get all in attack mode on me - ya see I have this gun with built in chainsaw just waiting. :twisted:

The Story.

Harsh reminder: despite being tasked by shareholders to deliver smilesto people's faces, video game companies aren't impervious to the worldwide economic d-d-d-downturn. Take Sony for example, who today slashed its 2008 earnings forecast by 38% citing "higher than expected foreign exchange losses" - a strong yen makes exports more expensive and, as luck would have it, the rest of the worldis a pretty important component of Sony's business. A Tokyo-based analyst told Forbes that this was "just the beginning" for Sony and that "given the track record of this company, it will under-deliver all the way." Ouch!

But it's not just the yen picking up; a global recession will take a bite out of entertainment spending, meaning things like LCD TVs and 4D game consoles may not fare so well. "Sony will make further losses in televisions, videogaming and mobile phones ... despite early 2008 promises of profits in TVs and its PlayStation3 videogame console," writes Forbes. Add in a steeper price than the competition - and no sign of a price drop- and you've got a recipe for red ink stew.

as long as good games keep coming to PS3, people will buy PS3's.... sure its always good news when Manufacturers (in this case Sony) make profit, cause they can invest in more 1st party games, online structure, marketing or price-cuts to compete with other systems.. but am sure that Sony is not crazy to let one of its biggest products (playstation brand) fade away, they will surely learn upon their mistakes and make sure they dont repeat them come next -gen of consoles..

however from a gamers point of view, i had my PS3 for over a year and got many great games, most of them exclusives and PS3 is an amazing console...

it is also cutting its profit forcast by 57% for the PS3.

http://forums.gametrailers.com/showthread.php?t=600806

my first and last contrbution to a thread of this kind.

it is also cutting its profit forcast by 57%.

http://forums.gametrailers.com/showthread.php?t=600806

my first and last contrbution to a thread of this kind.

too_much_eslim

It's a SW thread concerning big business of a powerful player in the world of VG.

Or maybe you think another Gears vs R2/Kz2 or another graphics king thread would be more appropriate. :roll:

Well they can't put out reliable hardware...

They sold all of those broken PSP's in Japan, now it's just going to hurt them. And their response is "oh well"

I bought a PS3 this gen, but I wont be buying any Sony products for a while after this. I don't mind Sony going under, as long as someone else takes their place in the console war. Competition is a good thing. Or MS/Nintendo are going to walk all over us.

[QUOTE="too_much_eslim"]

it is also cutting its profit forcast by 57%.

http://forums.gametrailers.com/showthread.php?t=600806

my first and last contrbution to a thread of this kind.

SecretPolice

It's a SW thread concerning big business of a powerful player in the world of VG.

Or maybe you think another Gears vs R2/Kz2 or another graphics king thread would be more appropriate. :roll:

Yeah, Sony picked a very unfortunate time period to release a (comparatively) expensive gaming system. However, they had no way to know the world economy would be turned so upside down.

I just hope this does not make them think twice about the gaming world, as any of the big three closing up in gaming at this point would be bad for the industry and gamers, IMO.

Yeah, Sony picked a very unfortunate time period to release a (comparatively) expensive gaming system. However, they had no way to know the world economy would be turned so upside down.

I just hope this does not make them think twice about the gaming world, as any of the big three closing up in gaming at this point would be bad for the industry and gamers, IMO.

SpruceCaboose

I talked about this in a Sony price cut thread. Its not just the PS3 that will hurt with the downturn, but all of Sony's electronics. This should end talk of a pricecut for the PS3 for the forseeable future.

The only good thing for MS is that a powerful yen vs a crappy $ means that the 360 is much more profitable in Japan and exact opposite for Sony in the US.

Sony made a very bad decsion with the pricing of the PS3 and now its clear to be a bigger drain on the company . Plus like someone else said the PSP 3000 hardware problem will make things even worse for them .

Is the PS3's future not only Not going to last 10 years but may not even last 5 years before Sony stops the bleeding and launches a new console or just sticks with PSP & PS2 ?

Just a little SW question so ya know, don't get all in attack mode on me - ya see I have this gun with built in chainsaw just waiting. :twisted:

The Story.

Harsh reminder: despite being tasked by shareholders to deliver smilesto people's faces, video game companies aren't impervious to the worldwide economic d-d-d-downturn. Take Sony for example, who today slashed its 2008 earnings forecast by 38% citing "higher than expected foreign exchange losses" - a strong yen makes exports more expensive and, as luck would have it, the rest of the worldis a pretty important component of Sony's business. A Tokyo-based analyst told Forbes that this was "just the beginning" for Sony and that "given the track record of this company, it will under-deliver all the way." Ouch!

But it's not just the yen picking up; a global recession will take a bite out of entertainment spending, meaning things like LCD TVs and 4D game consoles may not fare so well. "Sony will make further losses in televisions, videogaming and mobile phones ... despite early 2008 promises of profits in TVs and its PlayStation3 videogame console," writes Forbes. Add in a steeper price than the competition - and no sign of a price drop- and you've got a recipe for red ink stew.

SecretPolice

I don't think it wuld make sense to scrap the PS3 altogether. That would cost them even more money I think.

I believe they are going to stay with the PS3 for awhile. Its online is constantly evolving and adding features. The blu ray updates along with it. Develepers are getting and knowing how to flush out new and exciting games on the console. Sony has the PSP (which is successful) and the PS2 which is still going.

Sony is going to stick with the PS3, becasue the longer they do, the better technology they can put into it along with it getting more cheaper thus lowering the price.

I don't think it wuld make sense to scrap the PS3 altogether. That would cost them even more money I think.

I believe they are going to stay with the PS3 for awhile. Its online is constantly evolving and adding features. The blu ray updates along with it. Develepers are getting and knowing how to flush out new and exciting games on the console. Sony has the PSP (which is successful) and the PS2 which is still going.

Sony is going to stick with the PS3, becasue the longer they do, the better technology they can put into it along with it getting more cheaper thus lowering the price.

hayato_

1. Next machine not ready.

2. It incredibly expensive to launch a new console and the PS3 hasn't shown any sort of profit, Sony would be taking a giant loss on the PS3 and trying to launch a new console during a period of economic struggle, its not happenning.

3. The PS3 is becoming cheaper to manufacture. A new console would be another burden for a couple of years to come.

Not to mention a few of the herd might be a little ticked about the whole "10 year" promise. The PS3 is going no where soon there is no point speculating on it.

EDIT and its not about better technology its about cheaper tech. Where did the damned BC go? :cry:

[QUOTE="hayato_"]I don't think it wuld make sense to scrap the PS3 altogether. That would cost them even more money I think.

I believe they are going to stay with the PS3 for awhile. Its online is constantly evolving and adding features. The blu ray updates along with it. Develepers are getting and knowing how to flush out new and exciting games on the console. Sony has the PSP (which is successful) and the PS2 which is still going.

Sony is going to stick with the PS3, becasue the longer they do, the better technology they can put into it along with it getting more cheaper thus lowering the price.

blue_hazy_basic

1. Next machine not ready.

2. It incredibly expensive to launch a new console and the PS3 hasn't shown any sort of profit, Sony would be taking a giant loss on the PS3 and trying to launch a new console during a period of economic struggle, its not happenning.

3. The PS3 is becoming cheaper to manufacture. A new console would be another burden for a couple of years to come.

Not to mention a few of the herd might be a little ticked about the whole "10 year" promise. The PS3 is going no where soon there is no point speculating on it.

EDIT and its not about better technology its about cheaper tech. Where did the damned BC go? :cry:

Thats what I meant, but really. BC is overrated. I thought I was gonna use it like all the time. Yeah not even once really.

You barely even use it. Everytime I hear people say Im not buying a PS3 because it doesn't have backwards comp. needs reevaulate themselves alittle more before purchasing a PS3

Good article.

And MS shares falled 43%. Big deal. Its all part of this economical crysis. But I doubt the TC, or anyone else here knows anything about this issue.kenshinhimura10

Its not about share prices, they are down across the board its to do with EARNINGS.

Well they can't put out reliable hardware...

They sold all of those broken PSP's in Japan, now it's just going to hurt them. And their response is "oh well"

I bought a PS3 this gen, but I wont be buying any Sony products for a while after this. I don't mind Sony going under, as long as someone else takes their place in the console war. Competition is a good thing. Or MS/Nintendo are going to walk all over us.

Mau-Justice

And MS shares falled 43%. Big deal. Its all part of this economical crysis. But I doubt the TC, or anyone else here knows anything about this issue.kenshinhimura10

LINK?

im starting NOT to care about console war,i just wanna get Some games on my PS3 (MIdnight LA,MS2,R2,MKVSDC,NUNS,new Uncharted and new ratchet Future 2) that's all i want..games,i aint buying a 360 cuz...its has no games....that interest me,at anyways i could always use my friends/brothers

So unless Sony makes game=im happy

there's no such thing as a 10 year plan. The PS2 hasn't had a big game since 2007, so it only lasted for 7 years. the Ps2 was also the most popular console in history and it graphics improved much more quickly than they are with the PS3

Ps3 will be lucky to last four years

im starting NOT to care about console warSony-tha-champ0

wow a Sony fan who doesn't care about the console

who'd have thought it?

[QUOTE="kenshinhimura10"]And MS shares falled 43%. Big deal. Its all part of this economical crysis. But I doubt the TC, or anyone else here knows anything about this issue.blue_hazy_basic

Its not about share prices, they are down across the board its to do with EARNINGS.

Shares have a lot to do with final earning reports. Most companies are already slashing the numbers to avoid a bigger drop in shares. Just for your information, the Profits report is a tool used by the company to increase the trust on it. If the report is not reached, the shares fall, so normally, when a situation as bad as the current one is happens, companies drop the reports a few numbers to be able to achieve and meet expectations. This is basic economics material. And you dont have to be at school to know nothing about the subject, even the media as Fox News, CNN, etc talk BS every day about the subject. Talk to any non partidist economist, and you will see. Though I dont believe you can find such person in the US.

im starting NOT to care about console war,i just wanna get Some games on my PS3 (MIdnight LA,MS2,R2,MKVSDC,NUNS,new Uncharted and new ratchet Future 2) that's all i want..games,i aint buying a 360 cuz...its has no games....that interest me,at anyways i could always use my friends/brothers

So unless Sony makes game=im happy

Sony-tha-champ0

You can imagine a dev/pub looking at these trends with a eye on how they plan to proceed which in turn directly effects the games being made available.

[QUOTE="SecretPolice"][QUOTE="too_much_eslim"]

it is also cutting its profit forcast by 57%.

http://forums.gametrailers.com/showthread.php?t=600806

my first and last contrbution to a thread of this kind.

too_much_eslim

It's a SW thread concerning big business of a powerful player in the world of VG.

Or maybe you think another Gears vs R2/Kz2 or another graphics king thread would be more appropriate. :roll:

Does it mean you plug your ears and shout ' lalalalalalalala ' ?

I think this is an interesting thread whether you like Sony or not. I don't think even lemming want Sony to die. Nintendo is no competition when it comes to quality so over all hardcore games would suffer.

[QUOTE="kenshinhimura10"]And MS shares falled 43%. Big deal. Its all part of this economical crysis. But I doubt the TC, or anyone else here knows anything about this issue.tupapi006

LINK?

Bloomberg TV. Just watch it and you will see, though you may have to wait a little till they get back to it.

[QUOTE="tupapi006"]

[QUOTE="kenshinhimura10"]And MS shares falled 43%. Big deal. Its all part of this economical crysis. But I doubt the TC, or anyone else here knows anything about this issue.kenshinhimura10

LINK?

Bloomberg TV. Just watch it and you will see, though you may have to wait a little till they get back to it.

OK thx

[QUOTE="tupapi006"]

[QUOTE="kenshinhimura10"]And MS shares falled 43%. Big deal. Its all part of this economical crysis. But I doubt the TC, or anyone else here knows anything about this issue.kenshinhimura10

LINK?

Bloomberg TV. Just watch it and you will see, though you may have to wait a little till they get back to it.

MSFT:

Financial highlights
Income* 17.68 Bil
Sales Growth* +18.20%
Income Growth* +41.60%
Net Profit Margin 29.26%
Debt/Equity Ratio NA
* last 12 months

SNEJF:

Financial highlights
Income* 3.39 Bil
Sales Growth* +6.90%
Income Growth* -47.40%
Net Profit Margin 2.96%
Debt/Equity Ratio 0.31
* last 12 months

Never assume the TC is a snot nosed kid. :evil:

Yeah, Sony picked a very unfortunate time period to release a (comparatively) expensive gaming system. However, they had no way to know the world economy would be turned so upside down.

I just hope this does not make them think twice about the gaming world, as any of the big three closing up in gaming at this point would be bad for the industry and gamers, IMO.

SpruceCaboose

Agreed. As many times as I have come to the 360s defense over stupid calls for the 360 to "go under", I am going to come to the PS3s defense, too. No one should want ANY console to "go under".... ever. The ones that will pay the dearest price for any of the consoles going down and out are your fellow gamers. There is nothing good about that at all.

PS3 fanboys love talking about how 360 could die anytime and PS3 is so future its gonna last 10 years hahaha this is hilarious

i bet recalling all the LBP games really put a dent in their wallet too

[QUOTE="too_much_eslim"][QUOTE="SecretPolice"][QUOTE="too_much_eslim"]

it is also cutting its profit forcast by 57%.

http://forums.gametrailers.com/showthread.php?t=600806

my first and last contrbution to a thread of this kind.

d3thm0nkey

It's a SW thread concerning big business of a powerful player in the world of VG.

Or maybe you think another Gears vs R2/Kz2 or another graphics king thread would be more appropriate. :roll:

Does it mean you plug your ears and shout ' lalalalalalalala ' ?

I think this is an interesting thread whether you like Sony or not. I don't think even lemming want Sony to die. Nintendo is no competition when it comes to quality so over all hardcore games would suffer.

Something that concerns me with this dreadful period for Sony and their potential VG downfall is the fact that Sony gave us western console gamers access to Eastern games and they are still doing this. Its a distinct possibility that if Sony go under we will see less and less risky releases like Final Fantasy 7 in the future.

Vagrant Story is another example of an excellent game that almost did not make it over to these shores!

Well they can't put out reliable hardware...

Mau-Justice

Neither can Microsoft. The big difference is that when my 360 red ringed for the second time, I called MS and they sent out a box right away and fixed it for free. When my 60gig PS3 died Sony charged me $150 to fix it because I lost the reciept. Customer service makes all the difference in the world to me and MS obviously takes responsibility for their mistakes where as Sony refuses to accept any blame for an obvious manufacturering defect. I play my PS3 probably 4 times as much as my 360 but whenever someone asks for a console recommendation, I say get a 360. Sorry Sony I love my PS3 but hate you...:evil:

[QUOTE="kenshinhimura10"][QUOTE="tupapi006"]

[QUOTE="kenshinhimura10"]And MS shares falled 43%. Big deal. Its all part of this economical crysis. But I doubt the TC, or anyone else here knows anything about this issue.SecretPolice

LINK?

Bloomberg TV. Just watch it and you will see, though you may have to wait a little till they get back to it.

MSFT:

Financial highlights
Income* 17.68 Bil
Sales Growth* +18.20%
Income Growth* +41.60%
Net Profit Margin 29.26%
Debt/Equity Ratio NA
* last 12 months

SNEJF:

Financial highlights
Income* 3.39 Bil
Sales Growth* +6.90%
Income Growth* -47.40%
Net Profit Margin 2.96%
Debt/Equity Ratio 0.31
* last 12 months

Never assume the TC is a snot nosed kid. :evil:

I give you that. But only a fool can think that Sony is dying and that is based on economical facts. This period of crysis will see small companies fall, and big companies trip, but nothing more. If the studies are correct, this should be solved by late 2009.

Also, studies sho that entertainment is one of the few markets that grows more during periods of crysis compared to the rest.

ToV released in the US a month after the Japanese date. Valkyria Chronicles took like 8 months for the US release date. WKC and FFXIII will take god knows how long to translate. If MS got rid of region coding for games, I think we'd still be ok for the Japanese games.mbrockway

Thats because ToV was done by western studios, and not eastern studios. It was quite the news when announced that it was not NB eastern studios the ones behind it. It was also translated during the development process which gave them faster times. If only MS was not so closed about Areas in their games.

This is also something I think most devs should follow, MGS, DMC did the same, and we got to enjoy them quickly without any painful translation period.

well now that LBP wont affect october NPD sales. Its gonna look even worse for sony next month. this is the beginning of a much larger spiral downward.Fizzman

Actually its the other way around. With LBP pulled to Novemeber, this means Nov has more big games being released. Motorstorm 2 on Oct 28th, Resistance 2 and now LBP. Thats 3 big games for one month.

[QUOTE="Fizzman"]well now that LBP wont affect october NPD sales. Its gonna look even worse for sony next month. this is the beginning of a much larger spiral downward.kenshinhimura10

Actually its the other way around. With LBP pulled to Novemeber, this means Nov has more big games being released. Motorstorm 2 on Oct 28th, Resistance 2 and now LBP. Thats 3 big games for one month.

I give you that. But only a fool can think that Sony is dying and that is based on economical facts. This period of crysis will see small companies fall, and big companies trip, but nothing more. If the studies are correct, this should be solved by late 2009.

Also, studies sho that entertainment is one of the few markets that grows more during periods of crysis compared to the rest.

kenshinhimura10

[QUOTE="kenshinhimura10"]

I give you that. But only a fool can think that Sony is dying and that is based on economical facts. This period of crysis will see small companies fall, and big companies trip, but nothing more. If the studies are correct, this should be solved by late 2009.

Also, studies sho that entertainment is one of the few markets that grows more during periods of crysis compared to the rest.

blue_hazy_basic

The studies are more recent, done in growing countries, where during times of great economical unneasiness things related to entertainment see a boost. I recently did an esay based on the Latin American growing powers (as Chile and Brazil) and during their periods of recession, no more than 10 years ago top, this industry boomed above expected. Its easy to believe that the same can happen in other places.

Shares have a lot to do with final earning reports. Most companies are already slashing the numbers to avoid a bigger drop in shares. Just for your information, the Profits report is a tool used by the company to increase the trust on it. If the report is not reached, the shares fall, so normally, when a situation as bad as the current one is happens, companies drop the reports a few numbers to be able to achieve and meet expectations. This is basic economics material. And you dont have to be at school to know nothing about the subject, even the media as Fox News, CNN, etc talk BS every day about the subject. Talk to any non partidist economist, and you will see. Though I dont believe you can find such person in the US.

kenshinhimura10

you have it a little backwards. Shares prices are effected by earnings meeting or not meeting expectations. Earnings are not really effected by the share price though.

[QUOTE="kenshinhimura10"]

Shares have a lot to do with final earning reports. Most companies are already slashing the numbers to avoid a bigger drop in shares. Just for your information, the Profits report is a tool used by the company to increase the trust on it. If the report is not reached, the shares fall, so normally, when a situation as bad as the current one is happens, companies drop the reports a few numbers to be able to achieve and meet expectations. This is basic economics material. And you dont have to be at school to know nothing about the subject, even the media as Fox News, CNN, etc talk BS every day about the subject. Talk to any non partidist economist, and you will see. Though I dont believe you can find such person in the US.

Ontain

you have it a little backwards. Shares prices are effected by earnings meeting or not meeting expectations. Earnings are not really effected by the share price though.

Can you pin point where I was wrong? Apparently you read what you wanted to read.

[QUOTE="Ontain"]

you have it a little backwards. Shares prices are effected by earnings meeting or not meeting expectations. Earnings are not really effected by the share price though.

kenshinhimura10

Can you pin point where I was wrong? Apparently you read what you wanted to read.

your rebuttal to the other guy saying it's about earnings not share price is what's wrong.

[QUOTE="kenshinhimura10"][QUOTE="Ontain"]

you have it a little backwards. Shares prices are effected by earnings meeting or not meeting expectations. Earnings are not really effected by the share price though.

Ontain

Can you pin point where I was wrong? Apparently you read what you wanted to read.

your rebuttal to the other guy saying it's about earnings not share price is what's wrong.

OP talks about earnings, you changed the topic to talk about MS's share price, blue_hazy_basic rebuts you saying that this is about earnings. you reply that share prices have a lot of to with final earning. while this is true it doesn't actually help your case because earning could go up and still share could fall because they don't meet expectations. or conversely shares can go up because they lost less than expectations. thus when we're talking about earnings share prices aren't a good indicator of it.

Just a little tip before you sink more in that hole. Read my whole post and then come back.

Just a little tip before you sink more in that hole. Read my whole post and then come back.

kenshinhimura10

[QUOTE="kenshinhimura10"]

Just a little tip before you sink more in that hole. Read my whole post and then come back.

Ontain

OK then, where did I say that shares imply bigger-lower earnings? Last I checked I speaked about Company trust not earnings. Not to mention that Shares are also part of the companies capital (is that the english word) so actual shares DO affect the companies income, which is WHY Sony is going through this issue all of a sudden; as well as many other Asian companies; that needed their countries currencies to be devaluated to profit more. Having their local currencies grow decreases their earnings. As I said. Its basic economical stuff.

Well they can't put out reliable hardware...

They sold all of those broken PSP's in Japan, now it's just going to hurt them. And their response is "oh well"

I bought a PS3 this gen, but I wont be buying any Sony products for a while after this. I don't mind Sony going under, as long as someone else takes their place in the console war. Competition is a good thing. Or MS/Nintendo are going to walk all over us.

Mau-Justice

if that happens i will probably quit gaming for awhile and just stick with the ps3 till the end. but i dont see sony folding at all all economies go through this crap albeit GW Bush did not help matters, with his reckless money making policies.