Report: Sony facing massive PS3 losses

Chris Gerhard · 07-16-2007, 03:48 PM

Quote:

Originally Posted by MikeRox

MAybe Toshibas tactic IS to take hits on their HD DVD players, but force Sony to drop prices below they anticipated/can afford to, and just play it out til Sony go bust and HD DVD is the only format left

Personally, I think Toshiba is going to ultimately regret this mess. I do agree Sony has taken a bath and will never recover their Blu-ray investment, but Blu-ray will survive, there are too many companies behind it and I don't think Sony is the only company that blames Toshiba for this disaster.

Chris

**PFC5** · 07-16-2007, 04:59 PM

Quote:

Originally Posted by BobY

It also occurs to me that Sony's loss of nearly $2 Billion on the PS3 most likely does not include the estimated more than a million units built by Sony and not yet sold to dealers (based on the number of units Sony claims to have shipped versus the inventory at retail). They are likely sitting in Sony warehouses around the world.

Since these units may turn into sales at some point, they certainly would not have included them in the loss figures. That makes them a time bomb. Sony already paid for them (at a time when the manufacturing costs were at their highest), so only two things can happen:

1) They can sell the units to a retailer and put the currently hidden *real* loss of selling those products below cost on their books (especially bad if they have to blow them out at a discount price to move them, as it further increases the loss).

2) Scrap them and write the inventory down, which would be a disaster as they can only deduct a percentage of the depreciated value--and electronics depreciate very quickly.

Tick...tick...tick...

As an accountant, I can tell you that they have NOT deducted the costs of making these units that are sitting in warehouses. They also have not deducted the overhead (heat, electricity, labor, etc) & warehousing costs on them either. Those costs fall under the "Uniform Capitalization" rules of accounting under IRC 263A(a). Those expenses and many indirect expenses are actually listed as inventory ASSET items until they are sold and THEN they will move to the Income Statement (Profit/Loss) side of the financials and off the Balance Sheet side of the financials.

Excellent point BobY, as these units were probably made at the high mfg costs, and will be the losses that just keep coming for Sony until they are all gone/sold. I bet Sony has even bigger losses next year as a result of this.

For those of you who say this is a "paper loss", you would be wrong. If you try to look at it this way, you would THEN have to add those losses to the 2 BILLION loss already reported since those costs are NOT included.

The_Omega_Man · 07-16-2007, 05:01 PM

Yea those Toshiba guys really suck! They took my money............twice!

All I've got to show for it was these great HD-DVDs and standardized players with awesome picture and sound with some cool interactivity, at a reasonable price. Man this really sucks!

MikeRox · 07-16-2007, 05:53 PM

Quote:

Originally Posted by Chris Gerhard

Personally, I think Toshiba is going to ultimately regret this mess.

If anyones going to have regrets anytime soon, it's Sony.

**PFC5** · 07-16-2007, 06:13 PM

I think colleges are going to be studying this format war in business classes years from now as to WHY formats need to be unified as only ONE format and why BOTH will regret they didn't come to a compromise for a unified format like they did with SD DVD.

Stew4HD · 07-16-2007, 08:04 PM

Quote:

Originally Posted by Chris Gerhard

Personally, I think Toshiba is going to ultimately regret this mess. I do agree Sony has taken a bath and will never recover their Blu-ray investment, but Blu-ray will survive, there are too many companies behind it and I don't think Sony is the only company that blames Toshiba for this disaster.

Chris

We're all shocked that your personal opinion is as such!! So, it's Toshiba's fault now.. Bad Toshiba, shame on you for providing a more affordable HD player, shame on you for keeping Sony and the big blu machine in check.. Just for that, I am going to have to just buy my brother one of those lower priced, shameful A2's for his birthday.. That'll teach em all lesson!

The_Omega_Man · 07-16-2007, 09:40 PM

Quote:

Originally Posted by PFC5

I think colleges are going to be studying this format war in business classes years from now as to WHY formats need to be unified as only ONE format and why BOTH will regret they didn't come to a compromise for a unified format like they did with SD DVD.

http://www.highdefforum.com/showpost...9&postcount=32

Chris Gerhard · 07-17-2007, 03:58 AM

Quote:

Originally Posted by PFC5

I think colleges are going to be studying this format war in business classes years from now as to WHY formats need to be unified as only ONE format and why BOTH will regret they didn't come to a compromise for a unified format like they did with SD DVD.

If there is no 100% agreement, the side with the big majority should rule and that sure wasn't HD DVD. It isn't like this is the first time we have seen an idiotic format war, although it may be the worst in terms of money lost. I am with you and hope it is the last, but I already hoped that long before this one.

Chris

MikeRox · 07-17-2007, 06:06 AM

Quote:

Originally Posted by Chris Gerhard

If there is no 100% agreement, the side with the big majority should rule and that sure wasn't HD DVD. It isn't like this is the first time we have seen an idiotic format war, although it may be the worst in terms of money lost. I am with you and hope it is the last, but I already hoped that long before this one.

Chris

HD DVD studios 26, Blu Ray 23. Yes I agree Chris, only the one with the worldwide majority should continue, Bye bye Blu Ray

Chris Gerhard · 07-17-2007, 07:08 AM

Quote:

Originally Posted by MikeRox

HD DVD studios 26, Blu Ray 23. Yes I agree Chris, only the one with the worldwide majority should continue, Bye bye Blu Ray

Major studios Blu-ray 6, HD DVD 3 and Blu-ray has 4 exclusively. I can't even name the studios that are part of the 26, other than the 3 that matter because the others don't. HD DVD has a tiny market share because those studios don't release anything that sells. The list of hardware manufactures of players with the HD DVD logo, is still only Toshiba. I am waiting to see if the Onkyo player is a Toshiba OEM and will be very surprised if it isn't.

Chris

MikeRox · 07-17-2007, 08:07 AM

From the US maybe mate, but in Europe those studios you consider irrelivant hold alot of big name movies and own/created alot of important movies for different countries.

Why should "major" studios count as more important? Surely Microsoft being more behind HD DVD when they're pretty much the most "major" company in the world should count for something then?

You said you state US when just referring to the US, I think a statement like "the minor studios are insignificant" only applies to the US.

And my HD DVD player has an HD DVD logo on it, but no Toshiba logo to be seen

ClashFan · 07-17-2007, 10:42 AM

Quote:

Originally Posted by MikeRox

HD DVD studios 26, Blu Ray 23. Yes I agree Chris, only the one with the worldwide majority should continue, Bye bye Blu Ray

According the DVD Empire, it is now 28-24.

ClashFan · 07-17-2007, 10:48 AM

Quote:

Originally Posted by Chris Gerhard

Major studios Blu-ray 6, HD DVD 3 and Blu-ray has 4 exclusively. I can't even name the studios that are part of the 26, other than the 3 that matter because the others don't. HD DVD has a tiny market share because those studios don't release anything that sells. The list of hardware manufactures of players with the HD DVD logo, is still only Toshiba. I am waiting to see if the Onkyo player is a Toshiba OEM and will be very surprised if it isn't.

Chris

How do you define "major"? To me, Weinstein is "major" as they release interesting movies w/o much of the crap that all the other "major" ones, inc. Universal do. To me, the media's use of "major" means: studios that release lots of movies per year, most of which are crap.

I've got 4 Weinstein HD DVDs and will get the Kill Bill: The Whole Bloody Mess (or whatever it is called) and the 2 Grindhouse movies when they are released.

Chris Gerhard · 07-17-2007, 12:22 PM

Quote:

Originally Posted by ClashFan

How do you define "major"? To me, Weinstein is "major" as they release interesting movies w/o much of the crap that all the other "major" ones, inc. Universal do. To me, the media's use of "major" means: studios that release lots of movies per year, most of which are crap.

I've got 4 Weinstein HD DVDs and will get the Kill Bill: The Whole Bloody Mess (or whatever it is called) and the 2 Grindhouse movies when they are released.

Grindhouse I would like to see as well, but I could hardly call Weinstein a major studio. At least now I can name 4 studios that release on HD DVD with your help. I would like to see somebody name at least one HD DVD title released from each of the 24 I can't recall.

Chris

MikeRox · 07-17-2007, 12:45 PM

Momentum released Total Recall in the UK, Optimum released La Haine (they get the rights to movies such as Spirited Away and Princess Mononoke over here), BBC are releasing Planet Earth (not Warner Bros in the UK). They both have several other titles out as well.

There are quite a few other companies starting to dip their feet into HD (on the whole) too including Bandai Visual who support both formats, Magnolia, First Look and Rhino all have HD DVD releases out next week in the US. Big River dip their toes into HD in August and Koch Distributing join HD in September.

Their presence may not be as well felt as the "major" studios. But alot of their output is often far better, and so for many people far more valuable to formats.

07-16-2007, 05:01 PM	#48
The_Omega_Man Don't touch the remote! Join Date: Apr 2007 Location: Encino,CA Posts: 3,431	Yea those Toshiba guys really suck! They took my money............twice! All I've got to show for it was these great HD-DVDs and standardized players with awesome picture and sound with some cool interactivity, at a reasonable price. Man this really sucks! __________________ Lvng Rm Sony KF50WE610 HDTV D* HR-21 HD DVR XA2 HD DVD Onkyo TX-NR905 JVC HR-S3500U S-VHS Hrmony One Energy Encore 5.1 Spkr Mstr Bdrm Tosh 46XF550U HDTV XA2 HD DVD D* HR-21 HD DVR Onkyo TX-SR606 Hrmony 659 Polk 5.1 Spkr Office Samy LNS3252D HDTV D* HR-20 HD DVR A2 HD DVD Sony RDR-HX715 DVD Rec. Fisher FVH-4910 VHS Onkyo TX-SR674 Psyclone PSC47 HDMI Sw. Hrmony 550 Polk RM6750 5.1 Spkr Gst Rm Samy UN46B7100 HDTV D* HR10 HD DVR XBOX360 Elite+HD DVD PS3 60GB Onkyo TX-SR704 Energy C-7 Spkr Hrmony 880

07-16-2007, 06:13 PM	#50
PFC5 Super Moderator Join Date: May 2005 Posts: 28,420	I think colleges are going to be studying this format war in business classes years from now as to WHY formats need to be unified as only ONE format and why BOTH will regret they didn't come to a compromise for a unified format like they did with SD DVD. __________________ Denon AVR-887 Klipsch RP-5 Pwred Towers (mains) (525 watts peak each 12"Subs) All Klipsch RC-25(ctr),(2)SS1(surr),(2)SS1(rearSurr) Toshiba (2)HD-A20,PS3,BD35 For SACD/DVD-A Samsung HD-841 Panny 50pz80u plasma SETTINGS RCA HD50LPW162 50"DLP w/HD2+ SA 3250HD 47" LCD+Yamaha5790+HD-A1(bedroom) Harmony 680 + (2) 670s (amazing remote/support) Game room with Onkyo receiver & B&W Speakers The_Cable_Game Take the high ground and be happier

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07-17-2007, 08:07 AM	#56
MikeRox Blu Blu Skies! :D Join Date: May 2007 Location: Huddersfield, United Kingdom Posts: 12,417	From the US maybe mate, but in Europe those studios you consider irrelivant hold alot of big name movies and own/created alot of important movies for different countries. Why should "major" studios count as more important? Surely Microsoft being more behind HD DVD when they're pretty much the most "major" company in the world should count for something then? You said you state US when just referring to the US, I think a statement like "the minor studios are insignificant" only applies to the US. And my HD DVD player has an HD DVD logo on it, but no Toshiba logo to be seen

07-17-2007, 12:45 PM	#60
MikeRox Blu Blu Skies! :D Join Date: May 2007 Location: Huddersfield, United Kingdom Posts: 12,417	Momentum released Total Recall in the UK, Optimum released La Haine (they get the rights to movies such as Spirited Away and Princess Mononoke over here), BBC are releasing Planet Earth (not Warner Bros in the UK). They both have several other titles out as well. There are quite a few other companies starting to dip their feet into HD (on the whole) too including Bandai Visual who support both formats, Magnolia, First Look and Rhino all have HD DVD releases out next week in the US. Big River dip their toes into HD in August and Koch Distributing join HD in September. Their presence may not be as well felt as the "major" studios. But alot of their output is often far better, and so for many people far more valuable to formats.