Report: Sony facing massive PS3 losses

Cygnus · 05-15-2007, 10:59 PM

http://www.bloomberg.com/apps/news?p...tvk&refer=home
Sony May Post Biggest Loss in 4 Years on PlayStation 3 Consoles

By Hiroshi Suzuki

May 15 (Bloomberg) -- Sony Corp., the world's second-largest consumer electronics maker, may report its biggest quarterly loss in four years after the PlayStation 3 game console failed to spur as much demand as Nintendo Co.'s Wii player.

The net loss at Tokyo-based Sony may have widened to 75.8 billion yen ($630 million) in the fiscal fourth quarter ended March 31, from 66.5 billion yen a year earlier, according to the median estimate of 11 analysts surveyed by Bloomberg. Sales probably rose 9.5 percent to 2.02 trillion yen, the survey showed.

PlayStation 3 is being outsold by Wii by about two to one, causing Sony's game division, its second-largest by revenue, to post a fourth-quarter loss of 121 billion yen and a record 245 billion yen deficit for the fiscal year, according to five of the 11 analysts. The loss may exceed profits from electronics such as Bravia televisions, and the movie unit, whose ``Spider-Man 3'' generated record box-office sales when it opened this month.

``The extent of the recovery in the game business will be the main theme this fiscal year,'' said Naoki Fujiwara, who oversees $720 million at Shinkin Asset Management Co. in Tokyo.

Chief Executive Officer Howard Stringer, 65, who took over in 2005, promised to raise the company's percentage of annual operating profit, or sales minus the cost of goods sold and administrative expenses, to 5 percent of revenue by the end of March 2008. That would be the highest annual operating margin since the year ended 1999.

``This year will be the first time Stringer's management really comes under scrutiny,'' said Fujiwara.

Sony spokesman Shigenori Yoshida declined to comment for this article because the company reports earnings tomorrow.

Record Games Loss

Sony will probably fall short and generate an operating margin of 4.1 percent, according to the survey. Last fiscal year, Sony had an operating profit of 80 billion yen, or 1 percent of sales, the survey showed.

Production delays for PlayStation 3 have left Sony in third place in worldwide sales of the newest generation of consoles behind Nintendo's Wii and Microsoft Corp.'s Xbox 360. Sony is still the world's biggest console maker because of sales of its older PlayStation 2 machines.

Ken Kutaragi, developer of the PlayStation game consoles, will step down in June after production stumbles forced the company to slash shipment targets.

By comparison, Kyoto-based Nintendo last month reported profit in the company's latest quarter jumped sevenfold on sales of Wii consoles and portable DS game players. The company expects to sell 14 million Wii units this fiscal year, more than double the number sold in the previous year it was introduced. The Wii features a motion-sensor controller that allows a user to play virtual games of tennis and bowling, and costs about $250, half the price of the PlayStation 3.

Price Cuts

Sony sold 501,000 PlayStation 3 consoles in the U.S. from January to March, compared with Wii sales of 1.03 million, according to market researcher NPD Group Inc., based in Port Washington, New York. Microsoft sold 721,000 Xbox 360 players.

More than 205 million PlayStation and PlayStation 2 consoles have been sold worldwide since 1995. Sony in September cut the retail price of the PlayStation 3 in Japan before sales started.

The company also had to postpone the launch of the game machine in Europe by four months to March, because of a production delay in parts used in the Blu-ray DVD player used in the console.

``The 5 percent margin target is reachable if there is no price cut in the PS3,'' said Hitoshi Kuriyama, an analyst at Merrill Lynch Japan Securities Co., who has a ``buy'' rating on Sony. ``But I'm expecting a 20 percent price cut this fiscal year, and if that happens, the margin will not reach 5 percent.''

Bravias, Cyber-shots

Sony probably generated profit from all divisions other than games in the latest quarter, led by the consumer electronics business, as a weaker yen helped bolster sales of Bravia televisions and Cyber-shot digital cameras.

Operating profit from the consumer electronics division, second only to Matsushita Electric Industrial Co. in terms of sales, will probably rise 43 percent to 283 billion yen this fiscal year, after climbing to 198 billion yen in the preceding 12-month period, according to the Bloomberg survey.

The weaker yen, which increases the value of overseas sales when repatriated back home, has helped Japanese exporters including Toyota Motor Corp. and Canon Inc. report higher profit in the latest quarter.

Spider-Man, Resident Evil

Profit from the movie division will probably rise 43 percent to 50 billion yen this fiscal year, boosted by ``Spider-Man 3'' and the third installment of ``Resident Evil'' featuring Milla Jovovich, according to the Bloomberg survey.

``The question is the balance between the electronics business and the game business,'' said Koichi Takatsuka, who oversees $1 billion at UAM Japan Inc. in Tokyo. ``And the question regarding Mr. Stringer is whether he is able to be a strong leader and show a clear vision.''

bboncorr · 05-15-2007, 11:40 PM

this plus the new reports stating sony is being sued over brd technology. man if that case goes to court and sony is at fault there screwed. like i said in another section ms and the hd dvd group should get together and cripple sony by coming up with a deal for that company sueing sony. then its really a war.

hey i would be saying the same thing if sony had a chance to do the same thing to ms or hd dvd. i just want to see carnage or cut throat moves that show who has what it takes to win.

Steve44 · 05-16-2007, 07:08 AM

The best way to make money is to sell games and accessories. I just hope Sony doesn't start pushing games out when the games are fully complete.

EddieDZ · 05-16-2007, 08:23 AM

Quote:

Originally Posted by Steve44

The best way to make money is to sell games and accessories. I just hope Sony doesn't start pushing games out when the games are fully complete.

you mean "i just hope sony doesnt start pushing games out when the games ARENT fully completed". yea i hear ya.. personally i still think a 2:1 ratio isnt that bad.. Wii selling 1million units, 360 at 700k and ps3 at 500k.. thats still not bad considering the number of ps3 titles out lol ... the summer and fall will kick up some more though with better game releases and exclusive titles. ...

i havent heard/read anything about sony being sued for blu-ray??? what the heck is that rumor all about??? lol.. .. one statemen should be rewriten from

"Production delays for PlayStation 3 have left Sony in third place in worldwide sales of the newest generation of consoles behind Nintendo's Wii and Microsoft Corp.'s Xbox 360. Sony is still the world's biggest console maker because of sales of its older PlayStation 2 machines."

to

"production of game delays for playstation 3...."...

the system itself hasnt had no production problems at all only the initial one which had to cut Europe out of the launch date.. other then that its been smooth sailing with lots of PS3 coming out of the warehouse(alittle too many i might say lol).. but its the lack and the "delays, delays..and more delays" of the software titles itself thats causing the big hit..

bboncorr · 05-16-2007, 09:03 AM

Quote:

Originally Posted by EddieDZ

you mean "i just hope sony doesnt start pushing games out when the games ARENT fully completed". yea i hear ya.. personally i still think a 2:1 ratio isnt that bad.. Wii selling 1million units, 360 at 700k and ps3 at 500k.. thats still not bad considering the number of ps3 titles out lol ... the summer and fall will kick up some more though with better game releases and exclusive titles. ...

i havent heard/read anything about sony being sued for blu-ray??? what the heck is that rumor all about??? lol.. .. one statemen should be rewriten from

"Production delays for PlayStation 3 have left Sony in third place in worldwide sales of the newest generation of consoles behind Nintendo's Wii and Microsoft Corp.'s Xbox 360. Sony is still the world's biggest console maker because of sales of its older PlayStation 2 machines."

to

"production of game delays for playstation 3...."...

the system itself hasnt had no production problems at all only the initial one which had to cut Europe out of the launch date.. other then that its been smooth sailing with lots of PS3 coming out of the warehouse(alittle too many i might say lol).. but its the lack and the "delays, delays..and more delays" of the software titles itself thats causing the big hit..

the article is posted in the high def media section.

pappylap · 05-16-2007, 07:36 PM

Hey Cygnus, just checking how are things going? we are all pulling hard for ya......

Cygnus · 05-16-2007, 10:49 PM

Hey thanx for asking. I am doing fine. I just got my first monthly report card from my nutritionist. Interesting to read how the body reacts to stuff.

Quote:

Originally Posted by pappylap

Hey Cygnus, just checking how are things going? we are all pulling hard for ya......

Nexgenrulz · 05-16-2007, 11:08 PM

They may be posting losses in the gaming division, but Spiderman 3 is on its way to 1 billion dollars at the theatres!!

Trantzz · 05-17-2007, 09:33 AM

Quote:

Originally Posted by Nexgenrulz

They may be posting losses in the gaming division, but Spiderman 3 is on its way to 1 billion dollars at the theatres!!

I'm sorry, but that movie was a Piece of Feces. I really liked the first two but the third was terrible.

Sony had better start pushing out there "must have" library soon or a prices cut will be the only way they are going to move systems.

swedrows · 05-17-2007, 01:07 PM

Quote:

Originally Posted by Nexgenrulz

They may be posting losses in the gaming division, but Spiderman 3 is on its way to 1 billion dollars at the theatres!!

okay, so what does that have anything to do with this thread? you cna make a new thread and talk about the movie all you want, this thread was about sony losing money due to the ps3

and on that note, i thought the third spiderman was also kind of lackluster....i was expecting a better movie since i enjoyed the first two.....

bboncorr · 05-17-2007, 05:39 PM

Quote:

Originally Posted by swedrows

okay, so what does that have anything to do with this thread? you cna make a new thread and talk about the movie all you want, this thread was about sony losing money due to the ps3

and on that note, i thought the third spiderman was also kind of lackluster....i was expecting a better movie since i enjoyed the first two.....

he is just trying to put a posotive spin on the issue. most sony fan boys are like that there alot like fighting with women. you just cant win the fight because it goes like this,

man: hey honey how was your day?

woman: where were you. you where supposed to be home over an hour ago.

man:what are you talking about i just talked to you today and you didnt mention anything was planned.

woman: remember 6 months ago i told you we had some place to be on this day.

man:

. oh i remember but you said you didnt like them anymore and didnt want to go just 2 days ago. (at this point most men believe they have won the fight because if it was a man to man fight it would be over. but this isnt a man to man fight and its just begun)

man: so whats for dinner?

woman: oh you want dinner, what are you trying to say im fat and cant go without eating. how could you say that to me.

man:

i didnt say anything about your weight. you very thin honey and i love you the way you are.

woman: oh so now im a skiny bag of bones?

man: no honey your perfect the way you are.

woman: stop being a ass kisser.

woman: well remember 6 years ago when we first got together. well you didnt treat me like i deserved to be treated.

man:

woman: dont you roll your eyes at me!

man: what does this have to do with anything?

woman: you know exactly what this has to do with. dont play your mind games with me.

man: (a thought goes through his head)

woman: oh now you got nothing to say do yeah. oh and why do you hate my mother.

man:

WTF are you talking about. who said i hate your mother. i think she is a very nice lady.

woman: oh thats man talk for she is a dirty whore.

man: well my uncle did say he tapped that with 2 of his buddies way back in the day. (here is the big mistake. there is always one)

woman:

...........

(and this is when she makes you feel guilty and she wins the fight.)

man:

(this his the mans reaction) (then later when you realize how you got baited

)

man: i shoulda just stayed over my buddies and kept

see there is alot of things the same when fighting with a woman and a fan boy in general. but you cant have make up

with a fan boy.

Nexgenrulz · 05-17-2007, 08:07 PM

Quote:

Originally Posted by bboncorr

he is just trying to put a posotive spin on the issue. most sony fan boys are like that there alot like fighting with women. you just cant win the fight because it goes like this,

man: hey honey how was your day?

woman: where were you. you where supposed to be home over an hour ago.

man:what are you talking about i just talked to you today and you didnt mention anything was planned.

woman: remember 6 months ago i told you we had some place to be on this day.

man:

. oh i remember but you said you didnt like them anymore and didnt want to go just 2 days ago. (at this point most men believe they have won the fight because if it was a man to man fight it would be over. but this isnt a man to man fight and its just begun)

man: so whats for dinner?

woman: oh you want dinner, what are you trying to say im fat and cant go without eating. how could you say that to me.

man:

i didnt say anything about your weight. you very thin honey and i love you the way you are.

woman: oh so now im a skiny bag of bones?

man: no honey your perfect the way you are.

woman: stop being a ass kisser.

woman: well remember 6 years ago when we first got together. well you didnt treat me like i deserved to be treated.

man:

woman: dont you roll your eyes at me!

man: what does this have to do with anything?

woman: you know exactly what this has to do with. dont play your mind games with me.

man: (a thought goes through his head)

woman: oh now you got nothing to say do yeah. oh and why do you hate my mother.

man:

WTF are you talking about. who said i hate your mother. i think she is a very nice lady.

woman: oh thats man talk for she is a dirty whore.

man: well my uncle did say he tapped that with 2 of his buddies way back in the day. (here is the big mistake. there is always one)

woman:

...........

(and this is when she makes you feel guilty and she wins the fight.)

man:

(this his the mans reaction) (then later when you realize how you got baited

)

man: i shoulda just stayed over my buddies and kept

see there is alot of things the same when fighting with a woman and a fan boy in general. but you cant have make up

with a fan boy.

Don't be mad bb. If you don't like your PS3, get rid of it. If you're happy with your 360, then play it. Remember when MS lost 5 billion on the original XBOX? I was just simply saying that they have other areas where they will make their money up. You know how the old saying goes you have to spend/lose money in order to make it. Sony will be fine. Even though you 360 fanboys keep hoping that they will fold, it's never going to happen. We'll see by the end of this year where Sony stands. They have a lot of 1st party games coming out that are going to blow MS first party games away. After all, Sony makes better games than MS!!

junehhan · 05-17-2007, 08:19 PM

Quote:

Originally Posted by Nexgenrulz

Don't be mad bb. If you don't like your PS3, get rid of it. If you're happy with your 360, then play it. Remember when MS lost 5 billion on the original XBOX? I was just simply saying that they have other areas where they will make their money up. You know how the old saying goes you have to spend/lose money in order to make it. Sony will be fine. Even though you 360 fanboys keep hoping that they will fold, it's never going to happen. We'll see by the end of this year where Sony stands. They have a lot of 1st party games coming out that are going to blow MS first party games away. After all, Sony makes better games than MS!!

The difference is that one company has a high debt level while the other is literally swimming in cash. Sony will be fine, but the good news is that they are going to be more likely to take a more realistic approach with the PS4 instead of what they have done with the PS3. I don't even know what 1st party games will be coming out at the end of the year. We do know that GTA4, Halo 3, and very soon Forza 2 are hitting the X360. Sony is going to have more problems is they don't have anything to compete against Halo 3.

Razor05 · 05-17-2007, 10:59 PM

Quote:

Originally Posted by junehhan

The difference is that one company has a high debt level while the other is literally swimming in cash. Sony will be fine, but the good news is that they are going to be more likely to take a more realistic approach with the PS4 instead of what they have done with the PS3. I don't even know what 1st party games will be coming out at the end of the year. We do know that GTA4, Halo 3, and very soon Forza 2 are hitting the X360. Sony is going to have more problems is they don't have anything to compete against Halo 3.

Hmmm, probably be smart to ride out the storm.

bboncorr · 05-17-2007, 11:59 PM

Quote:

Originally Posted by Nexgenrulz

Don't be mad bb. If you don't like your PS3, get rid of it. If you're happy with your 360, then play it. Remember when MS lost 5 billion on the original XBOX? I was just simply saying that they have other areas where they will make their money up. You know how the old saying goes you have to spend/lose money in order to make it. Sony will be fine. Even though you 360 fanboys keep hoping that they will fold, it's never going to happen. We'll see by the end of this year where Sony stands. They have a lot of 1st party games coming out that are going to blow MS first party games away. After all, Sony makes better games than MS!!

who said i was mad? who said i didnt like my ps3? im a bit confused.

now you guys see where im going. he just pulled some garbage out of his anus and went somewhere else with the topic at hand. also put words into my mouth. exactly like the story i just typed.

i went after fanboyism and you went on the defensive. kinda makes me wonder why. i didnt attack you specificly in my statment. guess you felt since your a sony hommer it was an attack on you specificly. take notice i didnt call you a hommer because i dont know for sure if you are one

.

05-15-2007, 10:59 PM	#1
Cygnus The Bringer of Balance Join Date: Dec 2004 Posts: 6,832	Report: Sony facing massive PS3 losses http://www.bloomberg.com/apps/news?p...tvk&refer=home Sony May Post Biggest Loss in 4 Years on PlayStation 3 Consoles By Hiroshi Suzuki May 15 (Bloomberg) -- Sony Corp., the world's second-largest consumer electronics maker, may report its biggest quarterly loss in four years after the PlayStation 3 game console failed to spur as much demand as Nintendo Co.'s Wii player. The net loss at Tokyo-based Sony may have widened to 75.8 billion yen ($630 million) in the fiscal fourth quarter ended March 31, from 66.5 billion yen a year earlier, according to the median estimate of 11 analysts surveyed by Bloomberg. Sales probably rose 9.5 percent to 2.02 trillion yen, the survey showed. PlayStation 3 is being outsold by Wii by about two to one, causing Sony's game division, its second-largest by revenue, to post a fourth-quarter loss of 121 billion yen and a record 245 billion yen deficit for the fiscal year, according to five of the 11 analysts. The loss may exceed profits from electronics such as Bravia televisions, and the movie unit, whose ``Spider-Man 3'' generated record box-office sales when it opened this month. ``The extent of the recovery in the game business will be the main theme this fiscal year,'' said Naoki Fujiwara, who oversees $720 million at Shinkin Asset Management Co. in Tokyo. Chief Executive Officer Howard Stringer, 65, who took over in 2005, promised to raise the company's percentage of annual operating profit, or sales minus the cost of goods sold and administrative expenses, to 5 percent of revenue by the end of March 2008. That would be the highest annual operating margin since the year ended 1999. ``This year will be the first time Stringer's management really comes under scrutiny,'' said Fujiwara. Sony spokesman Shigenori Yoshida declined to comment for this article because the company reports earnings tomorrow. Record Games Loss Sony will probably fall short and generate an operating margin of 4.1 percent, according to the survey. Last fiscal year, Sony had an operating profit of 80 billion yen, or 1 percent of sales, the survey showed. Production delays for PlayStation 3 have left Sony in third place in worldwide sales of the newest generation of consoles behind Nintendo's Wii and Microsoft Corp.'s Xbox 360. Sony is still the world's biggest console maker because of sales of its older PlayStation 2 machines. Ken Kutaragi, developer of the PlayStation game consoles, will step down in June after production stumbles forced the company to slash shipment targets. By comparison, Kyoto-based Nintendo last month reported profit in the company's latest quarter jumped sevenfold on sales of Wii consoles and portable DS game players. The company expects to sell 14 million Wii units this fiscal year, more than double the number sold in the previous year it was introduced. The Wii features a motion-sensor controller that allows a user to play virtual games of tennis and bowling, and costs about $250, half the price of the PlayStation 3. Price Cuts Sony sold 501,000 PlayStation 3 consoles in the U.S. from January to March, compared with Wii sales of 1.03 million, according to market researcher NPD Group Inc., based in Port Washington, New York. Microsoft sold 721,000 Xbox 360 players. More than 205 million PlayStation and PlayStation 2 consoles have been sold worldwide since 1995. Sony in September cut the retail price of the PlayStation 3 in Japan before sales started. The company also had to postpone the launch of the game machine in Europe by four months to March, because of a production delay in parts used in the Blu-ray DVD player used in the console. ``The 5 percent margin target is reachable if there is no price cut in the PS3,'' said Hitoshi Kuriyama, an analyst at Merrill Lynch Japan Securities Co., who has a ``buy'' rating on Sony. ``But I'm expecting a 20 percent price cut this fiscal year, and if that happens, the margin will not reach 5 percent.'' Bravias, Cyber-shots Sony probably generated profit from all divisions other than games in the latest quarter, led by the consumer electronics business, as a weaker yen helped bolster sales of Bravia televisions and Cyber-shot digital cameras. Operating profit from the consumer electronics division, second only to Matsushita Electric Industrial Co. in terms of sales, will probably rise 43 percent to 283 billion yen this fiscal year, after climbing to 198 billion yen in the preceding 12-month period, according to the Bloomberg survey. The weaker yen, which increases the value of overseas sales when repatriated back home, has helped Japanese exporters including Toyota Motor Corp. and Canon Inc. report higher profit in the latest quarter. Spider-Man, Resident Evil Profit from the movie division will probably rise 43 percent to 50 billion yen this fiscal year, boosted by ``Spider-Man 3'' and the third installment of ``Resident Evil'' featuring Milla Jovovich, according to the Bloomberg survey. ``The question is the balance between the electronics business and the game business,'' said Koichi Takatsuka, who oversees $1 billion at UAM Japan Inc. in Tokyo. ``And the question regarding Mr. Stringer is whether he is able to be a strong leader and show a clear vision.'' __________________ Toshiba 57H81 Kenwood VR-616 Comcast DCT6412 III XBox 360 GamerTag Sec0nd2N0n3

05-15-2007, 11:40 PM	#2
bboncorr High Definition is the definition of life. Join Date: Nov 2005 Posts: 4,418	this plus the new reports stating sony is being sued over brd technology. man if that case goes to court and sony is at fault there screwed. like i said in another section ms and the hd dvd group should get together and cripple sony by coming up with a deal for that company sueing sony. then its really a war. hey i would be saying the same thing if sony had a chance to do the same thing to ms or hd dvd. i just want to see carnage or cut throat moves that show who has what it takes to win. __________________ Living Room pioneer kuro plasma PDP-5010FD (9.9) Denon 4308CI (9.5) B&W 683's, HTM61, 685's (9.0) Sony PS3 (9.0) Sony BD-S350 (9.5) HSU VTF-3 MK3 sub (9.0) Harmony 1000 (9.5) XBOX360 + HD DVD (9.2) Nintendo Wii (7.5) Netflix Roku (9.0) Gaming Room 60A3000 (8.7) Halcro ssp200 (10. perfection) Deftech BP7004, C/L/R2002, BP2X (8.7) Sony Remote Commander (7.0) Toshiba HDA35 (7.9) Samsung 1400 (5.0) Bedroom Panasonic TH-42PZ85U (8.7) Tivo HD (9.7)

05-16-2007, 07:36 PM	#6
pappylap Poopmaster Join Date: Dec 2005 Location: Way over Yonder Age: 4 Posts: 2,866	Hey Cygnus, just checking how are things going? we are all pulling hard for ya...... __________________ Bar Wench...Where's my Waffle! You can checkout anytime you like but you can never leave.." 50"Pioneer KURO 111FD Pro Elite Pioneer BD320 Blu-ray player Pioneer VSX-919AH A/V Receiver 32" & 37" Olevia LCDs Sony DHG HDD 500 gig DVR Samsung DTBH260 Digital Tuner One Roll of Charmin Quilted Plus in each Bathroom...

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05-16-2007, 07:08 AM	#3
Steve44 Super Moderater Join Date: Apr 2006 Location: Washington D.C. metropolitan area Age: 28 Posts: 1,045	The best way to make money is to sell games and accessories. I just hope Sony doesn't start pushing games out when the games are fully complete.

05-16-2007, 11:08 PM	#8
Nexgenrulz High Definition is the definition of life. Join Date: Dec 2006 Posts: 1,219	They may be posting losses in the gaming division, but Spiderman 3 is on its way to 1 billion dollars at the theatres!!