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Sony claims PS3 losses = $3.3+ Billion

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Old 06-27-2008, 04:26 PM   #151  
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First off - the licensing agreements are covered under NDA's so that info will not be made public. I recently posted a thread on DVD license fee's - only a month or so old so you have something to look at.
So what you are saying is that we will never know so I'm just as right as you are. And, what does old DVD license fee have to do with China and their deal?
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As far as your "impending doom" statement that Chinese companies aren't going to pay the DVD Forum Licensing Corp? . . .

I never said anything about "impending doom." I'm going by the track record of China and even if they don't pay the royalties I doubt it will hurt the DVD forum to any large extent. If you think the DVD forum got some big lucrative agreement requiring China to pay vast sums of money to foreign companies from patents, you are living in another world. The meeting on the Chinese side can probably be summed up by this: "Here is the deal, take it or leave it."
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Old 06-27-2008, 05:02 PM   #152  
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Ummm, I noticed this wasn't said, but it is a tad important on the PS3, PS4, and Cell front.

We all know STI developed the Cell, with Sony+Toshiba funding most of it and IBM doing most of the work.

The reason the gaming division lost a lot of money was due to the R&D of the Cell. Toshiba took a hit in losses too, I forgot what sector, Lee might now. But the Toshiba losses never really showed due to the division the Cell was housed under yielded revenues from their other products (I think it was the NAND sector.)

Anyways, Sony openly said they were leaving the R&D division of Microprocessors. That's why they sold the Cell plant. Of course, also to recoup some money back too (see the Dubai references, Sony also sold one of their buildings in Europe, and part of their Animations division but people who say this points to hardships, also look into that during the same year Sony bought 4 new developers to put under their gaming umbrella.)

The Cell Plants didn't just make Cells, they continued the R&D to shrink the die, and Toshiba used their knowledge and the R&D on the Cell to create the SpursEngine.

With Blu-Ray established and the Cell processor complete to a stage, the PS4 won't have the hardships of R&D that the PS3 did.

Sony didn't see this problems with the PS1 due to Nintendo mostly funding the R&D since the PS1 was originally a SNES CD adapter. Nintendo scrapped the project and Sony ran with what they had already made. The PS2's main concepts were already standards (or R&D to maturity) during launch. The only real consumer of profits were of courses licenses and R&D for the GS and EE chips inside of it. When production on those scaled back the PS2 became profitable (their biggest gain was putting both processors on one die.)

The PS3 was destined to be a profits-loss leader by unit, for a long time I'd guess too. It used all new technologies, (HDMI, BD, WiFi, BT) while the other consoles (aside the Wii, incredible that Nintendo can make their unit more "advance" than the 360 (in terms of technologies) cost less and generate profits per sale (thank that to the innards literally being OC'ed GC parts.))

The story of the PS3 made a huge jump. They managed to make their division profitable faster than Microsoft. Of course, majority of the thanks is due to the PS2 and the PSP, but still the PS3's production costs scaled a lot faster than the 360's.

If Microsoft some how avoided the RRoD they'd be in a way stronger position than they are now. RRoD not only cost them money ($1.3billion in the warranty extensions, plus factor in other expenses specifically R&D to fix the issue faster) but it's hurt their image, not much in the US. But when the uS has average of 1-week turn around times for RRoD, other countries have +30days.
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Old 06-27-2008, 05:08 PM   #153  
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So what you are saying is that we will never know so I'm just as right as you are. And, what does old DVD license fee have to do with China and their deal?
Really? Is that what this is about - you being right? Cause all you are doing is injecting FUD . . . Fear, Uncertainty and Doubt.

I told you where to go to get the DVD license fees because you would see what is collected on the different devices and discs and such. This at least gives a baseline.


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I never said anything about "impending doom." I'm going by the track record of China and even if they don't pay the royalties I doubt it will hurt the DVD forum to any large extent. If you think the DVD forum got some big lucrative agreement requiring China to pay vast sums of money to foreign companies from patents, you are living in another world. The meeting on the Chinese side can probably be summed up by this: "Here is the deal, take it or leave it."
Like I said . . . FUD.
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Old 06-27-2008, 05:12 PM   #154  
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Ummm, I noticed this wasn't said, but it is a tad important on the PS3, PS4, and Cell front.

We all know STI developed the Cell, with Sony+Toshiba funding most of it and IBM doing most of the work.

The reason the gaming division lost a lot of money was due to the R&D of the Cell. Toshiba took a hit in losses too, I forgot what sector, Lee might now. But the Toshiba losses never really showed due to the division the Cell was housed under yielded revenues from their other products (I think it was the NAND sector.)

Anyways, Sony openly said they were leaving the R&D division of Microprocessors. That's why they sold the Cell plant. Of course, also to recoup some money back too (see the Dubai references, Sony also sold one of their buildings in Europe, and part of their Animations division but people who say this points to hardships, also look into that during the same year Sony bought 4 new developers to put under their gaming umbrella.)

The Cell Plants didn't just make Cells, they continued the R&D to shrink the die, and Toshiba used their knowledge and the R&D on the Cell to create the SpursEngine.

With Blu-Ray established and the Cell processor complete to a stage, the PS4 won't have the hardships of R&D that the PS3 did.

Sony didn't see this problems with the PS1 due to Nintendo mostly funding the R&D since the PS1 was originally a SNES CD adapter. Nintendo scrapped the project and Sony ran with what they had already made. The PS2's main concepts were already standards (or R&D to maturity) during launch. The only real consumer of profits were of courses licenses and R&D for the GS and EE chips inside of it. When production on those scaled back the PS2 became profitable (their biggest gain was putting both processors on one die.)

The PS3 was destined to be a profits-loss leader by unit, for a long time I'd guess too. It used all new technologies, (HDMI, BD, WiFi, BT) while the other consoles (aside the Wii, incredible that Nintendo can make their unit more "advance" than the 360 (in terms of technologies) cost less and generate profits per sale (thank that to the innards literally being OC'ed GC parts.))

The story of the PS3 made a huge jump. They managed to make their division profitable faster than Microsoft. Of course, majority of the thanks is due to the PS2 and the PSP, but still the PS3's production costs scaled a lot faster than the 360's.

If Microsoft some how avoided the RRoD they'd be in a way stronger position than they are now. RRoD not only cost them money ($1.3billion in the warranty extensions, plus factor in other expenses specifically R&D to fix the issue faster) but it's hurt their image, not much in the US. But when the uS has average of 1-week turn around times for RRoD, other countries have +30days.

The total amount invested by STI in Cell R & D was about $400 million. There was no breakdown given as to who paid what.

And R & D is not a loss - not when the product is still being sold and developed like the Cell BE is - from an accounting standpoint.

R & D becomes a loss when the plug is pulled on a product - like HD DVD.
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Old 06-27-2008, 05:25 PM   #155  
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The total amount invested by STI in Cell R & D was about $400 million. There was no breakdown given as to who paid what.

And R & D is not a loss - not when the product is still being sold and developed like the Cell BE is - from an accounting standpoint.

R & D becomes a loss when the plug is pulled on a product - like HD DVD.
It is an expense, an expense that is factored into the division that houses it. At least thats what I thought Operating Expenses counted as.

Die Shrinks, engineering of new fabrications, etc etc.

Sony wanted out of the Microprocessor portion of the business, so they sold the Cell Plants which were an Operating Expense to them. With the Cell currently only being used in the PS3 I'd guess it was housed under the Gaming Division. My guess, I can be totally wrong.
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Old 06-27-2008, 05:25 PM   #156  
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Really? Is that what this is about - you being right? Cause all you are doing is injecting FUD . . . Fear, Uncertainty and Doubt.

I told you where to go to get the DVD license fees because you would see what is collected on the different devices and discs and such. This at least gives a baseline.

Like I said . . . FUD.
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Fear, uncertainty and doubt (FUD) is a tactic of rhetoric used in sales, marketing, public relations[1][2], and illiberal democracies. FUD is generally a strategic attempt to influence public perception by disseminating negative (and vague) information. An individual firm, for example, might use FUD to invite unfavorable opinions and speculation about a competitor's product; to increase the general estimation of switching costs among current customers; or to maintain leverage over a current business partner who could potentially become a rival.
I'm not seeing the FUD angle you are talking about. Agreements with China and the DVD forum have nothing to do with anyone on this forum or anyone else not living in China. Therefore, saying: "China may not pay the DVD forum's royalties as agreed" or "China most likely got a very sweet deal" is not influencing anyone's opinion or potential purchase of a certain product.
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Old 06-27-2008, 05:44 PM   #157  
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It is an expense, an expense that is factored into the division that houses it. At least thats what I thought Operating Expenses counted as.

Die Shrinks, engineering of new fabrications, etc etc.
We really need PFC5 here to clarify this, but my understanding is that R & D is an investment - an asset - that is depreciated like assets are - just at an accelerated rate.

Operating Expenses are things like labor cost, electricity, office supplies, etc.

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Sony wanted out of the Microprocessor portion of the business, so they sold the Cell Plants which were an Operating Expense to them. With the Cell currently only being used in the PS3 I'd guess it was housed under the Gaming Division. My guess, I can be totally wrong.
What we are trying to determine . . . . . . . is WHY Sony wanted out. And many have related the losses on the PS3 as a reason - to recoup cash to improve the balance sheet.

Sony has also stopped making their own HDTV panels - to bring back profitibility to their TV sales division which is down - profit wise.

The Cell BE is being used by Mercury Computer and IBM plans to use it but IBM makes their own Cell BE's.

We know Toshiba wants to use the Cell BE in their HDTV's and possibly in the SR DVD player. Other uses? Unknown.
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Old 06-27-2008, 05:58 PM   #158  
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We really need PFC5 here to clarify this, but my understanding is that R & D is an investment - an asset - that is depreciated like assets are - just at an accelerated rate.

Operating Expenses are things like labor cost, electricity, office supplies, etc.



What we are trying to determine . . . . . . . is WHY Sony wanted out. And many have related the losses on the PS3 as a reason - to recoup cash to improve the balance sheet.

Sony has also stopped making their own HDTV panels - to bring back profitibility to their TV sales division which is down - profit wise.

The Cell BE is being used by Mercury Computer and IBM plans to use it but IBM makes their own Cell BE's.

We know Toshiba wants to use the Cell BE in their HDTV's and possibly in the SR DVD player. Other uses? Unknown.
Haha, yeah I agree, we need an accountant.

In my simple mind, if I wanted to drop a production product I'd sell the plants that make them, since they cost me money to run. Probably the money it cost to run the plant is more, when scaled to units made, than it is to just buy the chips in bulk.

And if you read the process of selling the plants over, original Sony was asking for over a billion, maybe they made an agreement we don't know about that dropped the price on what Sony sold the plant to Toshiba.

In the end, I think it was definately the lack luster success of the PS3 out of the gate. If all the analyst are right (which doesn't mean they will be) the PS3 will be a success through its run, but of course at the start it isn't a happy tune and somoene has to pay for it.
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Old 06-27-2008, 06:03 PM   #159  
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I'm not seeing the FUD angle you are talking about. Agreements with China and the DVD forum have nothing to do with anyone on this forum or anyone else not living in China. Therefore, saying: "China may not pay the DVD forum's royalties as agreed" or "China most likely got a very sweet deal" is not influencing anyone's opinion or potential purchase of a certain product.
But we weren't discussing consumers buying products.

We were discussing the money Toshiba will make as the major patent holder of HD DVD - which you thought would go nowheres due to the death of HD DVD - which does not take into account CBHD.

The fact that you post statements like "China may not pay" or "we don't know what the licensing deal was - it could have been very small" is just showing the use of FUD - the Uncertainty and Doubt parts.
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Old 06-27-2008, 06:07 PM   #160  
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Haha, yeah I agree, we need an accountant.

In my simple mind, if I wanted to drop a production product I'd sell the plants that make them, since they cost me money to run. Probably the money it cost to run the plant is more, when scaled to units made, than it is to just buy the chips in bulk.

And if you read the process of selling the plants over, original Sony was asking for over a billion, maybe they made an agreement we don't know about that dropped the price on what Sony sold the plant to Toshiba.

In the end, I think it was definately the lack luster success of the PS3 out of the gate. If all the analyst are right (which doesn't mean they will be) the PS3 will be a success through its run, but of course at the start it isn't a happy tune and somoene has to pay for it.
- these are public corporations - backroom "deals" are more a fantasy than reality . . . IMO.

And though Sony sold their FAB - they are still running it - new landlord - Toshiba - who is a BIG chip manufacturer - one of their core businesses.
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Old 06-27-2008, 06:10 PM   #161  
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- these are public corporations - backroom "deals" are more a fantasy than reality . . . IMO.

And though Sony sold their FAB - they are still running it - new landlord - Toshiba - who is a BIG chip manufacturer - one of their core businesses.
Haha, look up Microsoft and read their history. Tons of back door dealings that didn't come to light until years later. I wouldn't be surprised if something did happen but of course we won't know until Deep Throats rats them out. Hehe.

Sony is still running the Plant? As their employees or Sony is paying to keep the plant running?
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Old 06-27-2008, 06:19 PM   #162  
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Haha, look up Microsoft and read their history. Tons of back door dealings that didn't come to light until years later. I wouldn't be surprised if something did happen but of course we won't know until Deep Throats rats them out. Hehe.

Sony is still running the Plant? As their employees or Sony is paying to keep the plant running?
Here is the link I posted:

Sony sells fab to Toshiba for $833M, confirms PlayStation chip joint venture

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A joint venture is planned to focus on the Cell Broadband Engine processor, which is used in the PlayStation system, and the RSX graphics engine.
By Suzanne Deffree, Managing Editor, News -- Electronic News, 2/20/2008
Toshiba Corp, Sony Corp, and Sony Computer Entertainment Inc (SCEI) today detailed an agreement that will see Toshiba buy a Sony 300-mm fab and see the trio form a joint venture for the production of high-performance semiconductors, including products for SCEI's PlayStation gaming system.

Toshiba, Sony, and SCEI first started discussing the possibility of entering into a joint venture in October 2007, when a memorandum of understanding was signed.

Under the terms of the definitive agreement announced today, the joint venture, to be named at a later date, will start operation from April 1, in Nagasaki Technology Center of Sony Semiconductor Kyushu (SCK). It will be 60% owned by Toshiba, and Sony and SCEI will each take a 20% stake.

By March 31, Toshiba will acquire from Sony and SCK the 300-mm wafer line installed in SCK's Nagasaki Technology Center Fab 2, with the exception of some equipment, for approximately $833 million (90 billion yen). Toshiba said it plans to loan the fab to the joint venture at the start of operation.

As originally planned, the joint venture will initially focus on the Cell Broadband Engine (Cell/BE) processor, which is used in the PlayStation system, and the RSX graphics engine. To be true, Sony and Toshiba, along with IBM, first unveiled the Cell processor in 2005. The joint venture will also produce other high-performance semiconductors for Sony, as well as Toshiba's leading edge SoCs for applications in digital consumer products.

Manufacturing will start with 65-nm process, and the joint venture will promote migration to 45-nm process mass production, in cooperation with Toshiba's system LSI manufacturing operation in Oita, Japan. No timeline for the move to 45-nm production was given.

As signaled by today’s agreement, Sony is continuing its fab-lite strategy, a business model that saw the company transfer its assets in the Oita operation to Toshiba last year. Toshiba, meanwhile, has been adding capacity and planning fab constructions. The company on Tuesday announced a partnership with SanDisk for a new NAND flash fab and separately announced a second fab for additional semiconductor capacity. Both of the new fabs will be located in Japan.
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Old 06-27-2008, 06:22 PM   #163  
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But we weren't discussing consumers buying products.

We were discussing the money Toshiba will make as the major patent holder of HD DVD - which you thought would go nowheres due to the death of HD DVD - which does not take into account CBHD.

The fact that you post statements like "China may not pay" or "we don't know what the licensing deal was - it could have been very small" is just showing the use of FUD - the Uncertainty and Doubt parts.
You still have failed to show how I instilled FUD in any potential consumers. Unless you are a major stockholder in a major DVD forum company, whether or not Chinese companies pay royalties to the DVD forum for an exclusive Chinese product have zero to do with you. HD DVD is dead as can be so no comments on that subject's future could be FUD unless you are talking about it reappearing as a challenger to BD again. Just drop it Lee.
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Old 06-27-2008, 06:28 PM   #164  
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You still have failed to show how I instilled FUD in any potential consumers. Unless you are a major stockholder in a major DVD forum company, whether or not Chinese companies pay royalties to the DVD forum for an exclusive Chinese product have zero to do with you. HD DVD is dead as can be so no comments on that subject's future could be FUD unless you are talking about it reappearing as a challenger to BD again. Just drop it Lee.
I believe this was your first post today on this thread - the one that I initially responded to:

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I'm going straight to the Toshiba v Sony arguments since that is clearly the argument. How many discontinued HD DVD players will have to be sold to cover that $1,000,000,000 flop? The PS3's $3.3 billion loss has the PS3, BD, Playstation Store, movie downloads, oh and PS3 games, all still in or coming to help recoup it's losses. Of course Toshiba came out way better.
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Old 06-27-2008, 06:30 PM   #165  
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Here is the link I posted:

Sony sells fab to Toshiba for $833M, confirms PlayStation chip joint venture
Yeah, that article towards the end sort of shows that Toshiba will be the main funder to growing the facilities.

Seems Sony just wants to keep producing Cell BEs, but Toshiba was already planning to add equipment and get new lines going. Probably for their SpursEngine or to increase Cell Production for their own personal use.
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